Covering Their Tracks.

...Fannie Mae and Freddy Mac - are not facing any kind of financial crisis...the more people exagerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing. - Barney Frank, D-MA, 2003.

The Investors Business Daily has a story about the principal obstacle to timely reform and oversight of Fanny and Freddy, namely, congressional Democrats who sought to use questionable loaning by the institutions for political patronage. IBD also names the congerscritters who received the largest political contributions from the two failed lending agencies. The top five are:

• Christopher Dodd, D-CT, $133,900
• John Kerry, D-MA, $111,000
• Barack Obama, D-IL, $105,849
• Hillary Clinton, D-NY, $75,550
• Paul Kanjorski, D-PA, 65,500

It's unlikely that you will hear much of the role that either the Clinton Administration nor the Congers had in making Fanny-and-Freddy-stein. No, it will be blamed on BushMcCain.

A Momentous Week.

If Jim Cramer is correct, our country has narrowly escaped the complete seizure and meltdown of its financial system, and has avoided a Great Depression. For now. God grant great wisdom and courage to our leaders to put together an effective plan to clean this awful mess up.

It's A (30-1) Leveraged Life!

(Investment banker George Failey and his new bride Mary race back to his Fleecem Bros. office. There a frightened, angry mob has swarmed around his receptionist's desk. George smiles wanly at many of his friends in the mob.)

George: Hi Bob, Carrie, Ed...

Mob: We want to redeem our shares in the Ultra Plunge Mortgage Securities Fund!!

George: well, OK (looking at Ed), here's a form Ed. You fill that out and you'll get your redemption package in a month. You submit the package to the Fleecem Corporate Headquarters and they'll send a check after a review of your account and prorating the balance for current NAV and redemption administrative costs.

Ed: how long will that take??

George: About ninety days.

Ed: Ninety days?? I want my $100,000 now!

George: but Ed, when you signed the fund application after the reading the prospectus which said it may take from 90 to 12o days for redemptions...

Ed: I want my $100,000!

George: Ed, it doesn't work that way. Look, see Ernie over there? (points to a disheveled bearded man, who quickly dashes out the door) Well, part of your money is in Ernie's house!

Ed: What?? You gave that bum a mortgage?? He hasn't worked in two years! And that deadbeat owes me fifty bucks!

George: well, anyway...and look there's Carrie! Part of your money is in Carrie's Home Equity Loan! And she put that money right to work!

Carrie: Bought a really sick boat with it! Bastard Repo Man took it away last month...

Ed: Well, George, they can just pay you back and then you can pay me!

George: But Ed! You see that guy over there? (points to another bearded bum)

Ed: yeah?

George: We sold Ernie's and Carrie's loans to him. Twenty times. And he sold them to some British banker. Who sold them to a Russian guy. Who's in Argentina.

(Ed looks stupified)

George: but see what's happening here? We're panicking, and selling. But on the other side of town, the Chinese Government is buying!

(a hysterical man dashes into the office)

Man: Hey! The Chinese Government is giving me two cents on the dollar for my Fund shares! Come on! Let's go cash in! (the crowd moves toward the door, but George blocks their path)

Ed: well, Failey...

George: You might be able to catch Ernie and get your fifty bucks. Can you also fill out the customer survey form on our website? It'll help with my bonus.

He Can't Be All Bad?

Our "progressive" fisherfriends may become apoplectic to learn that Vice President Cheney is quite an avid and accomplished flyfisherman. Maybe it's just a clandestine program to scout out new drilling sites for Big Earl.

Financial Blackmail?

The Politico is reporting that the Dems will extract a heavy price for their "bipartisan" efforts on the Bad Debt Bailout Plan, and CNBC has reported that they are also considering the taking the plunge into corporatism - Uncle Sam taking equity shares in the distressed financial companies. So that they can be directed toward more beneficent behavior?

Lipstick on a Mortgage.

At this moment the Fed, Treasury, and Congressional leaders are meeting to put together a federal structure to assume much of the risk of the flood of bad debt associated with soured mortgages. The Treasury plan would sell T-Bills to holders of the mortage securities in exchange for them. The idea is that Uncle Sam can hold this bad debt for a long period of time until the housing market stabilizes. Taxpayers may see a profit from this move.

Unfortunately, the Dems are now circulating an alternate plan, and putting Obama's name on it (ghostwritten by Charles Schumer, Nancy Pelosi, and Barney Frank). Preliminary reports suggest the Dem plan would have the government buy and manage the mortgages outright (like refinancing them directly with debtors). It smells like debt forgiveness for overextended homeowners. And what does Obama have to do with it? Other than he is running for President, and the Dems can use it to trumpet him as the "savior of the economy", probably nothing.

It is a sobering thought indeed to realize that at this minute the US financial system rallies or succumbs on the disposition of Barney Frank.

That Winning Feeling.

Well, the Lions made it a game...for about 20 minutes.

The New Politics.

Yes, this election will be different.

P.S. - the Atlantic article, "The Wars of John McCain", penned by Jeffery Goldberg, is quite informative and evenhanded. We recommend reading it. The cover caption for the story "Why War is His Answer", is histrionic and misleading.

The Fog Rolls In.

If you haven't formed at least a tentative decision for which presidential candidate to cast your ballot, you may have waited too long. A thick, blinding, anesthetizing fog is now descending on the election, as the political parties take control of the media communications. The gases of partisan half-truths, fibs, and whoppers, belched by an unending procession of party apparatchiks on the Meatpacker Networks, obscure the voter's vision needed to answer the "Core Questions" of the election. These questions are: what are the fundamental philosophies of governance of each candidate, and which candidate has the best record of judgement, leadership, experience, and ethics? It's a short list. The answers to these questions will shape the decision-making all the other nuts-and-bolts issues. Unfortunately, it may now be impossible to discern the answers to the Core Questions.