Who is attorney Nancy Quon?
This is the web page from her law firm. Says she is in CAI's Distinguished Speakers Club. Haven't seen anything from CAI yet on this exploding situation.
Saturday, September 27, 2008
FBI searches attorney's office as political corruption probe continues - Las Vegas Sun: "The latest search warrant served in the Las Vegas Valley in the ongoing investigation of possible political corruption was at a local attorney's office.
FBI agents went to attorney Nancy Quon, whose Web site says she represents homeowners associations, and seized more records, said KLAS-TV Channel 8 today.
A law enforcement task force first served search warrants at homes, offices and clubs all across the Las Vegas Valley Wednesday as part of what might become a political corruption investigation."
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This is an intriguing situation. The articles I have seen so far tell me that the press doesn't have the whole story yet. They say, "Lawmen believe [contractor Leon] Benzer and other persons conspired to take over the boards, hire Benzer to do repair work and funnel lucrative lawsuit cases to certain law firms." (I haven't seen police referred to as "lawmen" since the last John Wayne rerun I watched--lots of "lawmen" seem to be women these days.) The press seems to think that there is some sort of collusion among professionals, run by a contractor and enabled by rigged elections. Perhaps the argument is going to be that this contractor stage-manages elections and puts in BOD members who follow his orders and hire a certain law firm which in turn hires a particular set of experts who in turn present a case that generates a pot of money, the repairs are overseen by a certain property manager, and everybody profits.
But there are plenty of questions unanswered.
1. Such as, what exactly is the suspected crime that led to such a drastic step as searching an attorney's offices? Believe me, that is a big deal, because of attorney-client privilege. Obviously, I get why owners would be angry at having their associations taken over, but usually such things are civil matters. What made this one into a criminal investigation?
2. How can you have "outsiders" on an HOA or condo association BOD? Don't you have to be a member to serve as an officer?
3. If the vote total goes way up from one election to another, is that because of ballot box stuffing and/or ineligible voters, which obviously would be bad, or is it because somebody solicited votes from absentee owners? If the latter, why is that illegal? I get that the resident owners don't like it, but if absentee owners are members, don't they get to vote if they want to? If somebody helps them vote, so what? In political science we call that GOTV...Get Out the Vote. (It's the Chicago Way. We even have dead people voting here.) Don't these associations have some way of determining that each ballot they count is from an actual owner?
4. And why is it criminal if one law firm represents lots of HOAs, and in every case that has the same kinds of damages, they hire the same contractor, estimator, soils engineer, and so forth? And if one contractor or property manager habitually refers cases to the same attorneys, is that illegal? Referrals are how law firms get construction defect cases.
5. And what is the relationship, if any, of all this to actual political corruption? Not clear from the articles.
6. Fred Pilot asks if this would be happening but for the unfolding real estate and mortgage meltdown. Good question, and I don't know. It would depend on how serious this really is. Is there some larger dimension to this investigation that the press doesn't know about?
I assume law enforcement has at least tentative answers to these questions or they wouldn't be executing search warrants. But so far, this is a puzzling situation that leaves me curious.
FBI agents went to attorney Nancy Quon, whose Web site says she represents homeowners associations, and seized more records, said KLAS-TV Channel 8 today.
A law enforcement task force first served search warrants at homes, offices and clubs all across the Las Vegas Valley Wednesday as part of what might become a political corruption investigation."
--------------
This is an intriguing situation. The articles I have seen so far tell me that the press doesn't have the whole story yet. They say, "Lawmen believe [contractor Leon] Benzer and other persons conspired to take over the boards, hire Benzer to do repair work and funnel lucrative lawsuit cases to certain law firms." (I haven't seen police referred to as "lawmen" since the last John Wayne rerun I watched--lots of "lawmen" seem to be women these days.) The press seems to think that there is some sort of collusion among professionals, run by a contractor and enabled by rigged elections. Perhaps the argument is going to be that this contractor stage-manages elections and puts in BOD members who follow his orders and hire a certain law firm which in turn hires a particular set of experts who in turn present a case that generates a pot of money, the repairs are overseen by a certain property manager, and everybody profits.
But there are plenty of questions unanswered.
1. Such as, what exactly is the suspected crime that led to such a drastic step as searching an attorney's offices? Believe me, that is a big deal, because of attorney-client privilege. Obviously, I get why owners would be angry at having their associations taken over, but usually such things are civil matters. What made this one into a criminal investigation?
2. How can you have "outsiders" on an HOA or condo association BOD? Don't you have to be a member to serve as an officer?
3. If the vote total goes way up from one election to another, is that because of ballot box stuffing and/or ineligible voters, which obviously would be bad, or is it because somebody solicited votes from absentee owners? If the latter, why is that illegal? I get that the resident owners don't like it, but if absentee owners are members, don't they get to vote if they want to? If somebody helps them vote, so what? In political science we call that GOTV...Get Out the Vote. (It's the Chicago Way. We even have dead people voting here.) Don't these associations have some way of determining that each ballot they count is from an actual owner?
4. And why is it criminal if one law firm represents lots of HOAs, and in every case that has the same kinds of damages, they hire the same contractor, estimator, soils engineer, and so forth? And if one contractor or property manager habitually refers cases to the same attorneys, is that illegal? Referrals are how law firms get construction defect cases.
5. And what is the relationship, if any, of all this to actual political corruption? Not clear from the articles.
6. Fred Pilot asks if this would be happening but for the unfolding real estate and mortgage meltdown. Good question, and I don't know. It would depend on how serious this really is. Is there some larger dimension to this investigation that the press doesn't know about?
I assume law enforcement has at least tentative answers to these questions or they wouldn't be executing search warrants. But so far, this is a puzzling situation that leaves me curious.
S.E.C. Concedes Oversight Flaws Fueled Collapse - NYTimes.com: "WASHINGTON — The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down."
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Talk about closing the barn door after the horse got out.
South Florida gated communities link teens to security troubles -- South Florida Sun-Sentinel.com: "Gated communities became popular in South Florida in the 1970s, promising an extra level of security and prestige, according to Joanna Lombard, a professor of architecture at the University of Miami. But with that security comes challenges, including teen behavior problems and unexpected costs."
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Ironic. The gates end up being expensive because teenagers break them. According to this article about the culture of gated teenagers, they express their existential teenage angst-ridden gatedness by acting out. I guess if it isn't one thing, it's another.
Weekend America: Gated Into Foreclosure
Weekend America: Gated Into Foreclosure: "San Niccolo has been feeling the effects of the real estate crisis for more than a year now. A lot of houses are vacant, post-foreclosure. Others are being rented out to college kids, or multiple families, by investors who'd hoped to flip the properties for a quick profit but couldn't find buyers.
Houses that went for $600,000 a few years ago are now on the market for half that. And the neighbors say the wrought iron front gate, supposed to symbolize prestige and security, is regularly rammed by tow trucks trying to get in to repossess residents' cars. Vandalism has become a problem in the neighborhood: break-ins, slashed tires, broken windshields."
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This is a high-priced gated community in Las Vegas. The houses sold for $500,000 and higher not too long ago.
Houses that went for $600,000 a few years ago are now on the market for half that. And the neighbors say the wrought iron front gate, supposed to symbolize prestige and security, is regularly rammed by tow trucks trying to get in to repossess residents' cars. Vandalism has become a problem in the neighborhood: break-ins, slashed tires, broken windshields."
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This is a high-priced gated community in Las Vegas. The houses sold for $500,000 and higher not too long ago.
Friday, September 26, 2008
Statement by John McCain, 2 1/2 years ago
Senator John McCain
May 26, 2006
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
Quick Info
S-90 Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: Dead
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190,to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
Senator John McCain
May 26, 2006
Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
Quick Info
S-90 Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: Dead
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190,to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
Support, criticism for plan to rewrite mortgage-loan terms
Support, criticism for plan to rewrite mortgage-loan terms: "A plan by Democrats to allow bankruptcy judges to rewrite mortgage-loan terms for struggling homeowners as part of the proposed $700 billion Wall Street bailout has the support of some South Florida jurists. The judges say the proposal would let them lower the interest rate on home loans for borrowers who enter Chapter 13 bankruptcy because of a pending foreclosure. A Chapter 13 allows individuals to reorganize their debts. Right now, bankruptcy judges can modify the terms of all kinds of loans except those on a first home.''Since we can't help [homeowners], they end up losing their home and that may mean breaking up their family and putting them out on the street,'' said U.S. Bankruptcy Judge A. Jay Cristol in Miami. Added U.S. Bankruptcy Judge Laurel M. Isicoff, also in Miami: ''Every bankruptcy judge I've spoken with feels strongly that this is a tool that they should be given.'' She has talked with about 30 judges, she said. Cristol said the proposal is a ''win-win'' for homeowners and lenders. Homeowners keep their house and lenders have a performing loan rather then getting the keys to a property they'll then have to sell."
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It seems like a good idea to me, too. But the Mortgage Bankers Association is against it.
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It seems like a good idea to me, too. But the Mortgage Bankers Association is against it.
Las Vegas Now | I-Team: New Details Emerge in Homeowners Association Probe
Las Vegas Now | I-Team: New Details Emerge in Homeowners Association Probe: "Mountains of financial and legal documents seized by a law enforcement task force are being scrutinized. FBI Agents and Metro Detectives worked into the night, serving search warrants at nine locations to find evidence of what they believe is political corruption involving local homeowner associations.
The FBI and Metro are still not talking, nor do we expect them to say anything. The investigation is just getting started and it's now obvious it stretches in many directions.
Investigators already see a pattern, whereby the same law firms file construction defect lawsuits, the same contractors are hired to do the work, the same management company oversees the whole thing, and the homeowner boards are subjected to something like a political coup.
The elections, homeowners say, are rigged."
------------------------
They are talking about "dozens" of HOAs being "hijacked."
The FBI and Metro are still not talking, nor do we expect them to say anything. The investigation is just getting started and it's now obvious it stretches in many directions.
Investigators already see a pattern, whereby the same law firms file construction defect lawsuits, the same contractors are hired to do the work, the same management company oversees the whole thing, and the homeowner boards are subjected to something like a political coup.
The elections, homeowners say, are rigged."
------------------------
They are talking about "dozens" of HOAs being "hijacked."
Video: Burning Down the House--What caused our financial crisis?
This is a devastating video that will soon be everywhere because Drudge just posted a link to it. Viral video is turning into an unpredictable force in these campaigns. With almost six weeks to go, what else will go viral, and what will be the impact on the campaigns and the issues?
[update: The same basic story appears in an editorial in Investor's Business Daily.]
This is a devastating video that will soon be everywhere because Drudge just posted a link to it. Viral video is turning into an unpredictable force in these campaigns. With almost six weeks to go, what else will go viral, and what will be the impact on the campaigns and the issues?
[update: The same basic story appears in an editorial in Investor's Business Daily.]
TheHill.com: "Senate Democratic leaders unveiled their $56 billion economic stimulus package on Thursday, less than an hour before leaving to meet President Bush at the White House to continue the fragile negotiations on the financial rescue bill."
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So that is the Democrat price tag for supporting the bailout?
[update: Here is a summary of what the House Republicans want, which isn't what Bush and Paulson want. So I guess the situation is the House and Senate Democrats will support something like the Paulson plan if they get their $56 million; the House Republicans don't like the plan, which is being panned like crazy by many conservatives; and neither McCain nor Obama has so far tried to play the role of Bigfoot. Harry Reid is bashing McCain for not being helpful enough, and seems to have forgotten that Obama was sitting there not doing a whole lot either. As the presidential candidate of the party that controls both houses, I would think more leadership would be expected of him than of McCain, but Obama has made a fantastic career out of acting supremely important while doing absolutely nothing, so why change now?]
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So that is the Democrat price tag for supporting the bailout?
[update: Here is a summary of what the House Republicans want, which isn't what Bush and Paulson want. So I guess the situation is the House and Senate Democrats will support something like the Paulson plan if they get their $56 million; the House Republicans don't like the plan, which is being panned like crazy by many conservatives; and neither McCain nor Obama has so far tried to play the role of Bigfoot. Harry Reid is bashing McCain for not being helpful enough, and seems to have forgotten that Obama was sitting there not doing a whole lot either. As the presidential candidate of the party that controls both houses, I would think more leadership would be expected of him than of McCain, but Obama has made a fantastic career out of acting supremely important while doing absolutely nothing, so why change now?]
Steven Pearlstein - Gut Check
Steven Pearlstein - Gut Check: "[T]his isn't primarily a bailout for Wall Street -- it's an attempt to jump-start certain credit markets that have broken to the point that nobody is buying, driving down prices to the point where they are well below any reasonable estimate of their long-term economic value.
The basic idea is to use special auctions to recreate a market for these securities with many competing sellers and one buyer (the Treasury), so that a credible 'market' price can be established. If that price turns out to be below what those securities are now valued at on the banks' balance sheets, then banks will have to take the loss. If the price turns out to be higher, then banks may be able to record gains. The point isn't to bail out institutions that have made bad bets and suffered credit losses, but to provide a buyer of last resort so the market can begin pricing again."
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This is a short and persuasive take on the Paulson proposal. Worth reading for sure.
Pearlstein doesn't talk about the politics, just the policy. Politically, we now have the spectacle of the Democrats blaming the congressional Republicans for the breakdown in negotiations over the bailout. Last time I checked the Democrats had majorities in both houses of Congress and they can surely count on some Republican votes, and the President won't veto it because it's his administration's proposal. So why don't the Democrats just negotiate with the administration, come up with a Bush/Democrats bill, pass it, and take credit for saving the economy? Pelosi told Paulson that the Republicans are the problem, so in fact there is no problem, right?
Except that the Democrats don't want the responsibility of making the decision. They want some sort of bipartisan bailout so they don't take the heat for the current unpopularity of "bailing out Wall Street," and for the possibility that it will be a failure anyway. And they want Republican support on Democrat terms, apparently with all sorts of additional spending for other things and new powers for bankruptcy judges to remake the terms of mortgages. Some of these things may be good ideas. But it comes down to power. They don't want to do this without some sort of Republican leadership on board. Yet, it seems to me that there is so much vehement conservative opposition to this entire bailout concept (listen to talk radio on this) that the Republican leadership will continue to balk. Maybe McCain can twist their arms, maybe not. If he succeeds in getting the Republicans in line (and that's why he went to Washington), we have a bailout and the usual bipartisan blame-and-credit-game afterword. If he fails, the Democrats will have to choose between a) taking responsibility for a huge, complex, and untested policy that may not work, or b) letting the financial sector melt down entirely and trying to blame the resulting depression on Bush, McCain, and the Republican minority in Congress.
The basic idea is to use special auctions to recreate a market for these securities with many competing sellers and one buyer (the Treasury), so that a credible 'market' price can be established. If that price turns out to be below what those securities are now valued at on the banks' balance sheets, then banks will have to take the loss. If the price turns out to be higher, then banks may be able to record gains. The point isn't to bail out institutions that have made bad bets and suffered credit losses, but to provide a buyer of last resort so the market can begin pricing again."
---------------
This is a short and persuasive take on the Paulson proposal. Worth reading for sure.
Pearlstein doesn't talk about the politics, just the policy. Politically, we now have the spectacle of the Democrats blaming the congressional Republicans for the breakdown in negotiations over the bailout. Last time I checked the Democrats had majorities in both houses of Congress and they can surely count on some Republican votes, and the President won't veto it because it's his administration's proposal. So why don't the Democrats just negotiate with the administration, come up with a Bush/Democrats bill, pass it, and take credit for saving the economy? Pelosi told Paulson that the Republicans are the problem, so in fact there is no problem, right?
Except that the Democrats don't want the responsibility of making the decision. They want some sort of bipartisan bailout so they don't take the heat for the current unpopularity of "bailing out Wall Street," and for the possibility that it will be a failure anyway. And they want Republican support on Democrat terms, apparently with all sorts of additional spending for other things and new powers for bankruptcy judges to remake the terms of mortgages. Some of these things may be good ideas. But it comes down to power. They don't want to do this without some sort of Republican leadership on board. Yet, it seems to me that there is so much vehement conservative opposition to this entire bailout concept (listen to talk radio on this) that the Republican leadership will continue to balk. Maybe McCain can twist their arms, maybe not. If he succeeds in getting the Republicans in line (and that's why he went to Washington), we have a bailout and the usual bipartisan blame-and-credit-game afterword. If he fails, the Democrats will have to choose between a) taking responsibility for a huge, complex, and untested policy that may not work, or b) letting the financial sector melt down entirely and trying to blame the resulting depression on Bush, McCain, and the Republican minority in Congress.
BBC NEWS | UK | Pilot completes jetpack challenge
BBC NEWS | UK | Pilot completes jetpack challenge: "A Swiss man has become the first person to fly solo across the English Channel using a single jet-propelled wing. Yves Rossy landed safely after the 22-mile (35.4 km) flight from Calais to Dover, which had been twice postponed this week because of bad weather. The former military pilot took less than 10 minutes to complete the crossing and parachute to the ground. The 49-year-old flew on a plane to more than 8,200ft (2,500m), ignited jets on a wing on his back, and jumped out."
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I want one of these for my birthday.
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I want one of these for my birthday.
Money: HOA delinquencies on the rise | association, hoa, foreclosures, hoas, aliso - OCRegister.com
Money: HOA delinquencies on the rise | association, hoa, foreclosures, hoas, aliso - OCRegister.com: "The Laguna Hills condo complex had at least 23 foreclosures in the past six months, resulting in months of unpaid homeowner association dues.
Now, Aliso Meadows is so short on cash that it has deferred roof and termite repairs, can't fix rotten wood siding and must wait to fix potholes 'big enough for your families to make Jacuzzi's of,' association officials said."
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Many associations are getting hit hard by the foreclosure meltdown. Banks aren't paying assessments on their REO CID units. Do you think they are going to start paying now, in the middle of a financial crisis? Harder times are coming, it seems.
Now, Aliso Meadows is so short on cash that it has deferred roof and termite repairs, can't fix rotten wood siding and must wait to fix potholes 'big enough for your families to make Jacuzzi's of,' association officials said."
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Many associations are getting hit hard by the foreclosure meltdown. Banks aren't paying assessments on their REO CID units. Do you think they are going to start paying now, in the middle of a financial crisis? Harder times are coming, it seems.
MyFox Tampa Bay | Homeowners face foreclosure for bushes, fees
MyFox Tampa Bay | Homeowners face foreclosure for bushes, fees: "A group of homeowners say they face liens on their homes and possible foreclosure for something as trivial as tall bushes. Others say they're accused of not paying fees when they have. Now, the issue is headed to court."
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This is the wrong time for HOA boards to get all hard-nosed about minor issues, if you ask me. Thanks to Fred Pilot for this link.
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This is the wrong time for HOA boards to get all hard-nosed about minor issues, if you ask me. Thanks to Fred Pilot for this link.
WaMu is largest U.S. bank failure - Yahoo! News
WaMu is largest U.S. bank failure - Yahoo! News: "NEW YORK/WASHINGTON (Reuters) - Washington Mutual Inc was closed by the U.S. government in by far the largest failure of a U.S. bank, and its banking assets were sold to JPMorgan Chase & Co for $1.9 billion...It vaults JPMorgan past Bank of America Corp to become the nation's second-largest bank, with $2.04 trillion of assets, just behind Citigroup Inc. Bank of America will go to No. 1 once it completes its planned purchase of Merrill Lynch & Co."
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At the rate this is going, we will soon have just a few giant banks.
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At the rate this is going, we will soon have just a few giant banks.
Thursday, September 25, 2008
Rescue plan could hinge on value of bad assets
Rescue plan could hinge on value of bad assets: "Treasury Secretary Henry Paulson's $700 billion financial rescue plan has grown from a program focused on relieving lenders and investors of their bad mortgages to one in which the government would have the authority to take over any kind of problem loan or other asset, from bad credit card debt to commercial real estate securities."
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Fred Pilot wonders if this would include delinquent HOA assessments. Maybe HOAs should start packaging their bad debt as securities and selling it, because if the credit markets dry up they won't be able to borrow to repair common area elements that 1) they have insufficient reserves to repair, and 2) they can't get enough from the owners in regular or special assessments to fix, and 3) there ain't no place else to go but the bank.
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Fred Pilot wonders if this would include delinquent HOA assessments. Maybe HOAs should start packaging their bad debt as securities and selling it, because if the credit markets dry up they won't be able to borrow to repair common area elements that 1) they have insufficient reserves to repair, and 2) they can't get enough from the owners in regular or special assessments to fix, and 3) there ain't no place else to go but the bank.
China banks told to halt lending to US banks-SCMP | Markets | Markets News | Reuters
China banks told to halt lending to US banks-SCMP | Markets | Markets News | Reuters: "BEIJING, Sept 25 (Reuters) - Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday."
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I think this is what Bush was talking about when he said that "credit markets are frozen." I wonder if Obama thinks this is important enough for him to stop the preening and posturing and go back to Washington. Last time I checked, he was supposedly a US Senator. I realize he thinks he is already President, but it seems that he might actually need to vote "present" again.
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I think this is what Bush was talking about when he said that "credit markets are frozen." I wonder if Obama thinks this is important enough for him to stop the preening and posturing and go back to Washington. Last time I checked, he was supposedly a US Senator. I realize he thinks he is already President, but it seems that he might actually need to vote "present" again.
Bailout: Full text of Bush's address about economy - On Deadline - USATODAY.com
Bailout: Full text of Bush's address about economy : "The decline in the housing market set off a domino effect across our economy. When home values declined, borrowers defaulted on their mortgages, and investors holding mortgage-backed securities began to incur serious losses. Before long, these securities became so unreliable that they were not being bought or sold. Investment banks, such as Bear Stearns and Lehman Brothers, found themselves saddled with large amounts of assets they could not sell. They ran out of money needed to meet their immediate obligations, and they faced imminent collapse. Other banks found themselves in severe financial trouble. These banks began holding on to their money, and lending dried up, and the gears of the American financial system began grinding to a halt."
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I don't pretend to be an expert on the financial sector, but I wish Bush had gone further and explained a couple of things.
The speech laid out the basics. There was a tsunami of cheap and easy money being lent out, creating enormous risk to the financial institutions, and the GSEs were in terrible jeopardy. When housing prices began to fall, the wave began to crash.
But while he correctly pointed to the speculation in housing that occurred, he never mentioned two things, because to do so would set off the blame game and paralyze his efforts to get the bill passed:
1. The Clinton Administration's major initiative to force banks to give home loans to "first time home buyers," meaning people who couldn't afford home ownership. You could call this over-regulation. This got Fannie Mae and Freddie Mac involved in buying all kinds of bad loans, and they passed that on in what turned out to be bad (but guaranteed) securities.
2. The total lack of regulation over the huge array of bizarre derivatives that were spawned to deal with all the excess risk. Credit default swaps proliferated all over the place and led to demands for payment that could not possibly be met--even by a giant like AIG.
So it seems to me that there was both over and under regulation: over-regulation in housing finance to induce reckless lending to people with no money, and under-regulation in the financial sector where they bought and sold all that risk. He avoided mentioning either. That makes the whole thing sound like a big natural disaster instead of something that was created by human action. Maybe that helps get the bailout passed, but doesn't the public need a fuller explanation of how we got here? I can see a typically vapid finger-pointing election "debate" over this between Obama and McCain with nobody explaining why both explanations are part of the real story.
----------------
I don't pretend to be an expert on the financial sector, but I wish Bush had gone further and explained a couple of things.
The speech laid out the basics. There was a tsunami of cheap and easy money being lent out, creating enormous risk to the financial institutions, and the GSEs were in terrible jeopardy. When housing prices began to fall, the wave began to crash.
But while he correctly pointed to the speculation in housing that occurred, he never mentioned two things, because to do so would set off the blame game and paralyze his efforts to get the bill passed:
1. The Clinton Administration's major initiative to force banks to give home loans to "first time home buyers," meaning people who couldn't afford home ownership. You could call this over-regulation. This got Fannie Mae and Freddie Mac involved in buying all kinds of bad loans, and they passed that on in what turned out to be bad (but guaranteed) securities.
2. The total lack of regulation over the huge array of bizarre derivatives that were spawned to deal with all the excess risk. Credit default swaps proliferated all over the place and led to demands for payment that could not possibly be met--even by a giant like AIG.
So it seems to me that there was both over and under regulation: over-regulation in housing finance to induce reckless lending to people with no money, and under-regulation in the financial sector where they bought and sold all that risk. He avoided mentioning either. That makes the whole thing sound like a big natural disaster instead of something that was created by human action. Maybe that helps get the bailout passed, but doesn't the public need a fuller explanation of how we got here? I can see a typically vapid finger-pointing election "debate" over this between Obama and McCain with nobody explaining why both explanations are part of the real story.
Wednesday, September 24, 2008
Bush: U.S. Citizens to Welcome Our 51 State
Bush: U.S. Citizens to Welcome Our 51 State: "(2008-09-20) — Although it cost more than the Louisiana Purchase and the Alaska purchase combined and offers far less acreage, President George Bush today said he thinks “U.S. citizens will welcome our 51 state with open arms.”
The announcement that the financial realm collectively known as “Wall Street” had applied for statehood follows a week in which the federal government took control of mortgage giants Fannie Mae and Freddie Mac, and insurance megalith AIG. It also comes as news breaks that the U.S. plans to spend up to a $1 trillion to “rescue” other foundering financial firms.
President Bush noted that the newest state is not so much a geographical swath of land as it is “a state of mind.”"
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You did hear about this, didn't you?
The announcement that the financial realm collectively known as “Wall Street” had applied for statehood follows a week in which the federal government took control of mortgage giants Fannie Mae and Freddie Mac, and insurance megalith AIG. It also comes as news breaks that the U.S. plans to spend up to a $1 trillion to “rescue” other foundering financial firms.
President Bush noted that the newest state is not so much a geographical swath of land as it is “a state of mind.”"
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You did hear about this, didn't you?
3 News > Business > Story > Cows that milk themselves
3 News > Business > Story > Cows that milk themselves: "The country's first robotic dairy farm is now up and running, complete with milking robots that allow the cows to choose their own milking time.
It is run by robots, milking robots that allow cows the freedom to be milked whenever they choose. Each animal has its own computerised collar giving it access to the milking shed, and monitoring its milk outflow and health."
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Somebody tell PETA about this so they can stop asking Ben & Jerry to make ice cream with human breast milk (see below).
It is run by robots, milking robots that allow cows the freedom to be milked whenever they choose. Each animal has its own computerised collar giving it access to the milking shed, and monitoring its milk outflow and health."
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Somebody tell PETA about this so they can stop asking Ben & Jerry to make ice cream with human breast milk (see below).
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