I'm already tired of hearing GOPers (Palin) and pundits (Buchanan - by the way, whatever happened to Bay?) blaming the financial crisis as the iceberg that sank McCain's presidential hopes. If you want to be President then the one thing you should expect is that unexpected events will certainly be thrown at you along the way. The key is how one responds to these events. It wasn't the meltdown that sank McCain but the way he reacted to it. I'm grateful that this happened when it did because it gave us a chance to evaluate how each candidate responds to true crises. We don't often get an opportunity like that BEFORE a President takes office.

I know that's only one of many reasons that showed McCain was NOT ready to lead, but it was a major one for many voters.

Excuse me, but where was this "compassionate conservatism" during Katrina, John? If I remember correctly you were eating cake while New Orleans drowned. Point Two: The economy is already in the tank, you dumb fuck. Point Three: It may not have been Main Street's fault, but Main Street is sure as hell the one who will end up paying for it.

I suppose there are still some people around who are afraid that somebody working three jobs might get an extra couple hundred bucks a year under Obama's tax policy while Wall Street gets set to pay out about $70 billion dollars in bonuses and staff payouts. I have had ENOUGH of hearing about how we should "create wealth" not "re-distribute it". I have a news flash for McGrampy: unless you've got a printing press that prints money (which is what was done in the case of the bailout) you cannot "create" wealth. You can only move it around.




For 30 years they have been trying to feed us the same old shit. Now they've been caught with their hand in the cookie jar. ENOUGH.

http://www.cnn.com/2008/POLITICS/10/20/cam...

This can't be good.



http://www.bloomberg.com/apps/news?pid=206...

Does anyone else get the feeling that Obama has lured McStupid into a trap?



http://politicalwire.com/archives/2008/10/...

Brilliant! Check it out.

http://www.techpresident.com/blog/entry/31...

PS, the rally was on Saturday so you probably can't text a question now.

I recently came across a five part series on Seattle PI.com from December 2007. It tells "the story of how Wall Street transmitted the practices of Southern California's go-go lending industry and the inflated U.S. real estate market to the global financial system."

Part I: The beginnings of a meltdown: Traders saw a cash cow in mortgage derivates

Members of what Wall Street called the "group of five" (Deutsche Bank AG, Goldman Sachs Group Inc, Bear Stearns Cos. and representatives of Citigroup Inc. and JPMorgan Chase & Co) met throughout the winter of 2005 to create new standardized contracts that would allow them to "protect themselves from the risks of subprime mortgages, enable speculators to bet against the U.S. housing market, and help meet demand from institutional investors for the high yields of loans to homeowners with poor credit."

The tools also magnified losses so much that a small number of defaulting subprime borrowers could devastate securities held by banks and pension funds globally, freeze corporate lending and bring the world's credit markets to a standstill.

<SNIP>

Another necessary step was to create an index to represent the market and help hedge general market exposure. It was called the ABX-HE and would be similar to the indexes traders use for baskets of stocks. This, participants believed, would add to the market's liquidity, or depth, by attracting more trading.

The ABX-HE index started trading on Jan. 19, 2006, with a volume of more than $5 billion. The cost of wagering against the securities was rising, a sign that traders saw an increased chance of default. An early warning was visible to anyone who knew where to look.

In the months to come, Deutsche Bank and at least one other member of the group of five, Goldman Sachs, began using subprime derivative contracts to bet the other way and guard against the possibility that subprime mortgages might default.

Part Two: Fees were another cash cow in subprime mortgage deals

Quick Loan Funding in Costa Mesa, Ca brings a car dealer mentality to the real estate market. Quick Loan targets people with bad credit, charging larger than normal fees and selling the loans to Wall Street.

As home prices rose, Sadek pushed mortgages to borrowers with bad credit. Subprime loans grew to 21 percent of all U.S. home loans last year from 7 percent in 2001, according to Inside Mortgage Finance. Banks drove that growth because they could bundle subprime loans into securities, parts of which paid interest as much as 3 percentage points higher than 10-year Treasury notes.

"I never made a loan that Wall Street wouldn't buy," Sadek says. He says the company did nothing illegal.

Expansion of the subprime derivatives market by New York bankers created a new way to bet against the U.S. housing market and Fed demand for mortgage-backed securities. Investors from Germany to Japan poured about $1.2 trillion into the vehicles in 2005 and 2006, according to Global Insight Inc., an investment research firm in Waltham, Mass.

<SNIP>

A key selling point was the 50 percent rise in home prices nationally from 2001 to 2006, according to the National Association of Realtors. Salespeople told homeowners that as long as values increased, they could always refinance or sell.

It wasn't a lie. Year over year, prices hadn't fallen since the 1930s, according to the Realtors group.

Now, with home prices declining, the Mortgage Bankers Association says borrowers with subprime adjustable-rate mortgages are seven times more likely to default than those with prime fixed-rate mortgages.

Sadek says he fostered a competitive sales environment.

"If the loans were so bad, why did Wall Street keep buying them?" Sadek says.

Part III: Making a profit on the crashing market

In August 2006, J. Kyle Bass, a hedge fund manager from Dallas conceived a hedge fund that bet on a crash for residential real estate by trading securities based on subprime mortgages to the least credit-worthy borrowers.

Within six months, Bass was right. Delinquencies of home loans made to people with poor credit reached record levels, and prices for the securities backed by these subprime mortgages plunged. The world's biggest financial institutions would write off more than $80 billion in subprime losses, while Bass, his allies and a handful of Wall Street proprietary trading desks racked up billions in profits.

<SNIP>

"We were saying that there were going to be $1 trillion in loans in trouble," Bass says. "That had really never happened before. You had to have an imagination to believe us."

Other early converts were Mark Hart of Corriente Capital Management in Fort Worth, Texas, and Alan Fournier of Pennant Capital in Chatham, N.J.

On the other side of their trades would be investors chasing the high yields from securities based on subprime loans. This group included Wall Street firms, German and Japanese banks and U.S. and foreign pension funds. They were reassured by the securities' investment-grade ratings, even as foreclosures started in some parts of the U.S.

Part IV: Credit ratings fueled subprime boom

Mortgage backed securities were blessed by the three biggest Wall Street credit rating agencies as safe investments. These instruments offered higher returns than government bonds with the same ratings.

One $720 million loan pool created by Tokyo-based Nomura Holdings Inc. was rated Baa3, an investment-grade rating, by Moody's when issued in 2006. Now, it's rated Caa1, seven levels deep into junk-bond territory, and priced at 32 percent of the original value after 29 percent of the mortgages defaulted.

Almost 40 percent of the loans in the pool were originated by Costa Mesa, Calif.-based Quick Loan Funding, run by Daniel Sadek, a broker who started the subprime company in 2002 with the motto: "You can't wait. We won't let you."

<SNIP>

S&P, a unit of New York-based McGraw-Hill Cos., issued ratings for about 98 percent of all new subprime mortgage bonds created last year, according to the industry newsletter Inside B&C Lending. Moody's, whose parent is New York-based Moody's Corp., provided ratings on 97 percent, while Fitch assessed 51 percent.

Fitch, owned by Paris-based Fimalac SA, declined to comment, according to spokesman James Jockle.

One regulator was issuing warnings. In a June 2006 speech at a Mortgage Bankers Association conference in Half Moon Bay, Calif., Susan Bies, the Federal Reserve governor in charge of regulation, urged the bankers to tighten credit standards for adjustable subprime mortgages. Bies said borrowers might default because of "payment shock" when interest rates rose.

The bankers didn't listen. The Fed's survey of senior loan officers issued the following month showed that 10 percent of U.S. lenders had lowered standards to qualify customers for mortgages.

Part V: Losses mount as unseen risks emerge

In July of 2007 payments in the first quarter stopped on 13.8 percent of subprime mortgages (4.8 percent of total U.S. borrowers). This caused demand for subprime securities to dry up and forced the Fed and the European Central Bank to inject a combined $275 billion into the banking system to keep money flowing.

"These structured products were crazy profitable for Wall Street until they blew up," says Randall Dodd, senior financial sector expert for the International Monetary Fund in Washington. "Ultimately, it's about excessive risk-taking and greed."

The risks were amplified by the derivatives, contracts whose values are derived from packages of home loans and are used to hedge risk or for speculation. The vehicles allowed investors to bet against particular pools of mortgages.

The magnified losses caused by derivatives made it possible for a small number of defaulting subprime borrowers to freeze world credit markets.

That's what happened in July after payments in the first quarter stopped on 13.8 percent of subprime mortgages representing 4.8 percent of total U.S. borrowers.

The defaults caused demand for subprime securities to dry up. Uncertainty over the value of the financial products spread to investment funds globally. Corporate lending stopped because no one knew what the collateral was worth. By Aug. 10, the Federal Reserve and the European Central Bank were forced to inject a combined $275 billion into the banking system to keep money flowing.

<SNIP>

J. Kyle Bass of Hayman Capital Partners in Dallas wagered that Quick Loan Funding borrowers would default. He says he turned a $110 million stake into about $600 million.

President Bush is taking his final August vacation down on the ranch. This is a picture that was taken at a local gas station during his FIRST vacation back in 2001.

This picture was printed in the Waco Herald-Tribune on Friday, August 15, 2008. (h/t Moss-e in Waco)



You can find an article comparing Then and Now here:

Eight years of presidential summer vacations later, much has changed in Central Texas (Registration required)

For example:

Bush’s approval rating (Gallup/USA Today polls):
August 2001: Mid 50s.
August 2008: High 20s.

Dow Jones Index:
Mid-August 2001: 10,510.
Mid-August 2008: 11,616.

Waco leaders’ outlook for winning a Bush Presidential Library:
2001: Hopeful.
2008: All but vanished.

Gas prices per gallon at Coffee Station in Crawford:
August 2001: $1.23.
August 2008: $3.67.

T-Bone steak at Waco Wooded Acres HEB, per pound:
$3.99 (sale price).
$8.99.

Obama, McCain offer very different energy plans

This is probably worse news for Obama than McCain given that Americans will usually vote in their short term rather than long term interests. What it really means is that high energy prices are here to stay for awhile, and it will not likely change in most of our lifetimes no matter who wins. That is what the voters need to be told by the candidates and what this country needs to accept in order to confront the problem realistically. The bigger question at this point in time is whether Obama can convince Americans to finally think in terms of future generations while McCain continues to reward our selfishness by refusing to even try.

And sometimes it happens because it's just time. Sometimes the force of the universe sweeps us up with it even we aren't expecting it. This is bigger than we are. I believe it's going to happen and here's why.

Levees Are Not Pork

Washington, D.C. - Republican presidential candidate John McCain opposed legislation last year that included money for flood control in Des Moines, which shows he is wrong to push for reforms to the congressional earmark system, a Democratic lawmaker charged Thursday.

President Bush eventually vetoed the bill, which authorized more than 900 navigation, flood-control and environmental projects across the country. A report on the bill said the Des Moines metropolitan area suffered more than $152 million in flood damage in 1993.

Good Morning America, How Are You?

What happened in New Orleans had nothing to do with you, they were told. Move on. Listen, we have a war to win and we can’t get bin Laden unless you go shopping. Who knows how many more blond high school girls might disappear in suspicious circumstances if you don’t convert to digital cable and get that iPhone. Pay no attention to the man behind the curtain.

---------------

I hope that now they will realize that the country is full of levees that could fail at any moment, bridges like the one in Minnesota that could collapse. They need to know that the government the ruling political classes have worked at gutting and making ineffective for the last 30 years cannot help you, not in its current form or with its current leadership (not just one party or the other: Reaganomics and Clinton Bubblenomics have both gutted our ability to do anything as a nation). Everyone in this nation needs to know that tomorrow it could happen to them if something is not done, and what it will mean to them when it happens

Please read te rest of the blog. Please.

Obama '08
YES WE CAN.