Daily Archives: December 17, 2009

The Supreme Leader Orders Banks to Lend More Money

By Pete the Banker
President Obama reiterated his call Monday for the nation’s banks to increase lending, saying that he was getting too many letters from small businesses unable to borrow money proclaiming,
” America ‘s banks received extraordinary assistance” from the government, Obama said at a press conference following a meeting with the heads of the largest banks.”Now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.”
and,
“The president and his advisers have responded in recent days with a burst of heated rhetoric, arguing that the government rescued the banking industry and that banks now are failing to show proper gratitude. The amount of money on loan from banks fell by almost $600 billion, or 7.2 percent, from September 2008 to September 2009, according to the Federal Deposit Insurance Corp. Lending to businesses, excluding construction loans, fell 15 percent.”
Obama blames banks for not lending.  Being recipients of TARP funds, the banks are apparently supposed to be compliant to the President, subordinating their own interest to Administration policy imperatives, simply acting as conduits in passing the TARP funds along with their own funds to those preferred businesses and the public regardless of the bank’s own accountability to operate as a going concern, repay the Government TARP infusion, and honoring their obligations to shareholders, other creditors and customers (here) .
Obama blames banks for not lending.  Being recipients of TARP funds, the banks are apparently supposed to be compliant to the President, subordinating their own interest to Administration policy imperatives, simply acting as conduits in passing the TARP funds along with their own funds to those preferred businesses and the public regardless of the bank’s own accountability to operate as a going concern, repay the Government TARP infusion, and honoring their obligations to shareholders, other creditors and customers.
 But are the bankers simply “hoarding” both TARP funds and their own capital depriving a suffering economy from the credit it needs to expand and employ those who are unemployed? 
 Six months ago, in April, 2009, The Independent (here) stated, “Banks on both sides of the Atlantic are being warned by regulators that they must hoard additional capital to weather the recession and future economic storms, in another series of steps designed to limit the risk taking …”
 And in September, the New York Times reported (here),
World leaders at the Group of 20 meeting this week should force banks to build up their reserves substantially to avoid another acute financial crisis, a leading association of regulatory experts said Monday, The New York Times’s Carter Dougherty reported.” 
So Mr. President, if you had any clue about the Financial System, why were you spending time at the White House with those “Fat Cat” Bankers you so despise and not chastising those Federal Bank Regulators who keep forcing that banks increase their capital reserves?  Why not point that finger at the Administration’s Regulators where the blame really belongs!    
Tell ’em where you saw it. Http://www.victoriataft.com

SW Washington Congressional Candidate, David Hedrick, Dreams of an ObamaFerrari

By David Hedrick 

When I arrived home Wednesday night, I happily announced to my wife “We have to buy a brand new Ferrari”.
“What?” she asked.
 I quickly explained to her that we must contact the bank right away to finance the purchase of a new Ferrari.  If we don’t, I informed her, “we are certain to go bankrupt”. 
 My wife was not amused.
  You see, this is exactly what I had just heard from the President of the United States , Barak Hussein Obama.  In an interview with ABC NewsCharlie Gibson, Obama has recently made the claim that the only way to save our nation from bankruptcy is to create a brand new unfunded government entitlement program.  In Obama’s words, if the Senate fails to pass the latest version of Obama-care, “the Federal government will go bankrupt”.   While there is wide speculation about the eventual cost of Obama’s government run health care takeover, everyone with rudimentary math skills agrees that the total cost of this program ends in the word trillion.
  So please help me out here.  Our government is on the verge of financial insolvency largely because of its unfunded healthcare liabilities, and the solution is to create an even larger unfunded healthcare liability?  Isn’t this the same thing as saying that someone who can not afford their current mortgage payment should go out and purchase a bigger, more expensive house with an even larger mortgage payment? 
  If a fifth grader came to me with this logic, I would strongly urge this child to spend another year in fifth grade before moving on to the next level.  But, this is not the inexperienced logic of a fifth grader..  This patently absurd assertion was made by the President of the United States .       
  Because the President chose to repeat this fallacy multiple times this can not be characterized as a simple misstatement.  Therefore, at least one of two things must be true.  Either the President lacks the mental deduction capabilities that would be expected of a child entering the sixth grade, or Congressman Joe Wilson  Regardless of which alternative is true, at some point we all must ask ourselves, is someone falling into either category fit to lead the free world?  was right (You Lie).
  So, to my friends out there who are struggling with their current mortgage, I wouldn’t go out and buy that bigger house just yet.  And as for my Ferrari… well…. my wife still isn’t onboard with the President’s logic, but please wish me luck with the bank.
  David William Hedrick
David Hedrick For Congress
www.davidwhedrick.com
Tell ’em where you saw it. Http://www.victoriataft.com

In the World of "Too Big to Fail," Size Really DOESN’T Matter on Wall Street.

By Pete the Banker
The Congress and more specifically, Socialist Bernie Sanders of Vermont pushes Government restrictions aimed to break up Corporations before they become too big too fail. Given that this is hypocrisy since Sanders rushed to rescue both Fannie, Freddie at cost of Billions to taxpayers last year.  What is his real motivation?
Only one large corporation today existed in 1900.  The capitalist system works and absent outside intervention companies thrive and then fail, to be replaced by others (Joseph A. Schumpeter; “Creative Destruction”).  It is interesting that the history of large corporations is that many are spawned by big government.  During WWII corporations like GM and Dow Chemical saw their greatest growth as contractors to the Federal Government. 

During the past year, thanks largely due to the Federal Reserve, the Treasury, and Congress, three banks— JP Morgan, B of A, and Wells Fargo have similarly grown dramatically now accounting for nearly 1/3 rd of the industry deposits (2yrs ago 20%).

More recently, we have seen that first hand results of government intervention in the Bank of America takeover of Merrill Lynch, the purchase of Merrill being done at $29/share far in excess of the price at which it should have been consummated.  Ken Lewis completed the purchase despite having second thoughts about it due primarily to coercion from Paulson and perhaps Bernanke to finalize the deal to the detriment of B of A’s shareholders.  Ultimately, the decision cost Lewis his job.

JPMorgan, Goldman Sachs, and Morgan Stanley were among 9 banks that were persuaded in mid-October 2008 by then Treasury Secretary Henry Paulson to accept TARP funds of $125 billion of capital injections with avowed intention to help restore stability to the financial markets. The three at various times stated they did not need the funds.  So why were the funds advanced to them?  Seemingly reluctant initially, the government eventually allowed them to payback the TARP funds within a few months

The AIG bail out of last year cost taxpayers some $180 Billion based on the proposition that it was too big to fail.  The AIG rescue was predicated on its inability to meet credit default swap obligation to major counter parties inclusive of Goldman Sachs and JP Morgan which in turn whose failure would cause massive systematic risk to the financial system.   Of the AIG TARP funds distributed, it is estimated that $50B went to Goldman, something less to JP Morgan the two parties allegedly of most concern to Geithner at that time.  Wouldn’t it have been far less costly to simply bail out Goldman and JP Morgan at a cost of $100B than to bail out AIG?

Peter Wallison in his Wall Street Journal article,  “Lack of Candor and the AIG Bailout” (here), dated  Nov 27, 2009 points out that Inspector General Neil Barofsky noted that Tim Geithner then President of the NY Fed Bank apparently did not believe that the financial condition of AIG’s credit default swap counterparties was a “relevant factor ” in bailing out AIG.   So isn’t it inconsistent for Geithner to now justify the massive AIG bailout, the imposition of draconian restrictions on derivatives, capital requirements of banks and yet at the same time suggest that there was no threat to then AIG CDS counterparties, effectively admitting his decision had nothing to do with systematic risk?

The Wall Street Journal in their editorial of September 13, 2009 said it best (here), 

“If recent history is any guide, when the feds stage their next intervention, they will not define “systemic risk” and they will refuse to release the data underlying their decision. To this day, taxpayers can only guess at the specific reasons behind the ad hoc rescues that began with Bear Stearns in March of 2008. Now Team Obama seeks to codify the bailout policies of the last 18 months.

Before receiving authority for new adventures across U.S. commerce, financial regulators should explain their current interventions. The basic questions: How exactly does the government measure systemic risk, and how do regulators know that the U.S. economy can’t live without a particular firm? Americans still don’t know why Bear, Citigroup and AIG were saved, but Lehman wasn’t.” 

On the Seeking Alpha blog, Charles Lieberman suggests that size had nothing to do with the credit crisis,( here)

If corporation size was not the cause of crisis, if several large financial firms were unlikely to fail without TARP funds, if the Treasury Secretary then the head of the NY Fed was unconcerned about systematic risk, then why the rush to bail out those Too Big Too Fail?  Why the rush to break up larger firms? 

Does this amendment allow the Federal Government to become the largest predator in the country, whose main objective seems to be more aligned with its own survival and the expansion rather than to expand competition in the economy?  Is this legislation simply another attempt to deliver additional leverage to the Federal Government to exert control over the private sector and thus shaping the economy in its own image, regardless of the choice of the electorate, the taxpayers and consumers? Given the apparent lack of logic in the Federal Government’s choice of winners and losers over the past year, how would the proposed amendment benefit the economy?  

And why if Senator Sanders is truly serious about preemptively breaking up firms that are “Too Big Too Fail” wouldn’t he be actively seeking the break up and replacement Fannie Mae and Freddie Mac, who along with the FHA currently account for nearly 90% of all residential mortgage lending and 40% of all apartment lending?  Instead Sanders, Congress, the Federal Housing Financing Agency and the Treasury are re-negotiating to extend the GSE’s government financing plan under more favorable terms
Tell ’em where you saw it. Http://www.victoriataft.com

The Supreme Leader Orders Banks to Lend More Money

By Pete the Banker
President Obama reiterated his call Monday for the nation’s banks to increase lending, saying that he was getting too many letters from small businesses unable to borrow money proclaiming,
” America ‘s banks received extraordinary assistance” from the government, Obama said at a press conference following a meeting with the heads of the largest banks.”Now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.”
and,
“The president and his advisers have responded in recent days with a burst of heated rhetoric, arguing that the government rescued the banking industry and that banks now are failing to show proper gratitude. The amount of money on loan from banks fell by almost $600 billion, or 7.2 percent, from September 2008 to September 2009, according to the Federal Deposit Insurance Corp. Lending to businesses, excluding construction loans, fell 15 percent.”
Obama blames banks for not lending.  Being recipients of TARP funds, the banks are apparently supposed to be compliant to the President, subordinating their own interest to Administration policy imperatives, simply acting as conduits in passing the TARP funds along with their own funds to those preferred businesses and the public regardless of the bank’s own accountability to operate as a going concern, repay the Government TARP infusion, and honoring their obligations to shareholders, other creditors and customers (here) .
Obama blames banks for not lending.  Being recipients of TARP funds, the banks are apparently supposed to be compliant to the President, subordinating their own interest to Administration policy imperatives, simply acting as conduits in passing the TARP funds along with their own funds to those preferred businesses and the public regardless of the bank’s own accountability to operate as a going concern, repay the Government TARP infusion, and honoring their obligations to shareholders, other creditors and customers.
 But are the bankers simply “hoarding” both TARP funds and their own capital depriving a suffering economy from the credit it needs to expand and employ those who are unemployed? 
 Six months ago, in April, 2009, The Independent (here) stated, “Banks on both sides of the Atlantic are being warned by regulators that they must hoard additional capital to weather the recession and future economic storms, in another series of steps designed to limit the risk taking …”
 And in September, the New York Times reported (here),
World leaders at the Group of 20 meeting this week should force banks to build up their reserves substantially to avoid another acute financial crisis, a leading association of regulatory experts said Monday, The New York Times’s Carter Dougherty reported.” 
So Mr. President, if you had any clue about the Financial System, why were you spending time at the White House with those “Fat Cat” Bankers you so despise and not chastising those Federal Bank Regulators who keep forcing that banks increase their capital reserves?  Why not point that finger at the Administration’s Regulators where the blame really belongs!    
Tell ’em where you saw it. Http://www.victoriataft.com

Pelosi Rips Rug Out From Under Obama

On page 10 of Pelosi’s 2006 campaign booklet, “A New Direction For America,” we see,

“To Defeat Terrorists and Stop the Spread of Weapons of Mass Destruction, we will:
Eliminate Osama Bin Laden, destroy terrorist networks like al Qaeda, finish the job in Afghanistan, and end the threat posed by the Taliban.

Double the size of our Special Forces, increase our human intelligence capabilities, and ensure our intelligence is free from political pressure.”

After seizing power in 2007 and opposing Bush at every turn on Iraq, she said on January 29,

“Many of us have been convinced for some time that additional forces would benefit the forgotten war in Afghanistan. We are pleased our commanders will now have larger numbers of American troops to prepare for challenging operations in the spring.”

She also said in December,

“Democrats might consider new war funding for Afghanistan before leaving Washington next week, but the majority remains opposed to appropriating any more money for the war in Iraq this year.”

She added,

“There will probably be some level of addressing Afghanistan; some of the domestic concerns about – you’ve seen the list that the DOD has come up with – we can address those concerns and certainly, perhaps, if more is needed to do something about Afghanistan.”

On December 16, 2009, now that much of what she was calling for may be coming to pass, she now says,

“rallying votes for troop surge in Afghanistan will be Obama’s job” adding, “she is finished asking her colleagues to back wars that they do not support.”

Are you ready to throw these liars out yet?

Tell ’em where you saw it. Http://www.victoriataft.com

In the World of "Too Big to Fail," Size Really DOESN’T Matter on Wall Street.

By Pete the Banker
The Congress and more specifically, Socialist Bernie Sanders of Vermont pushes Government restrictions aimed to break up Corporations before they become too big too fail. Given that this is hypocrisy since Sanders rushed to rescue both Fannie, Freddie at cost of Billions to taxpayers last year.  What is his real motivation?
Only one large corporation today existed in 1900.  The capitalist system works and absent outside intervention companies thrive and then fail, to be replaced by others (Joseph A. Schumpeter; “Creative Destruction”).  It is interesting that the history of large corporations is that many are spawned by big government.  During WWII corporations like GM and Dow Chemical saw their greatest growth as contractors to the Federal Government. 

During the past year, thanks largely due to the Federal Reserve, the Treasury, and Congress, three banks— JP Morgan, B of A, and Wells Fargo have similarly grown dramatically now accounting for nearly 1/3 rd of the industry deposits (2yrs ago 20%).

More recently, we have seen that first hand results of government intervention in the Bank of America takeover of Merrill Lynch, the purchase of Merrill being done at $29/share far in excess of the price at which it should have been consummated.  Ken Lewis completed the purchase despite having second thoughts about it due primarily to coercion from Paulson and perhaps Bernanke to finalize the deal to the detriment of B of A’s shareholders.  Ultimately, the decision cost Lewis his job.

JPMorgan, Goldman Sachs, and Morgan Stanley were among 9 banks that were persuaded in mid-October 2008 by then Treasury Secretary Henry Paulson to accept TARP funds of $125 billion of capital injections with avowed intention to help restore stability to the financial markets. The three at various times stated they did not need the funds.  So why were the funds advanced to them?  Seemingly reluctant initially, the government eventually allowed them to payback the TARP funds within a few months

The AIG bail out of last year cost taxpayers some $180 Billion based on the proposition that it was too big to fail.  The AIG rescue was predicated on its inability to meet credit default swap obligation to major counter parties inclusive of Goldman Sachs and JP Morgan which in turn whose failure would cause massive systematic risk to the financial system.   Of the AIG TARP funds distributed, it is estimated that $50B went to Goldman, something less to JP Morgan the two parties allegedly of most concern to Geithner at that time.  Wouldn’t it have been far less costly to simply bail out Goldman and JP Morgan at a cost of $100B than to bail out AIG?

Peter Wallison in his Wall Street Journal article,  “Lack of Candor and the AIG Bailout” (here), dated  Nov 27, 2009 points out that Inspector General Neil Barofsky noted that Tim Geithner then President of the NY Fed Bank apparently did not believe that the financial condition of AIG’s credit default swap counterparties was a “relevant factor ” in bailing out AIG.   So isn’t it inconsistent for Geithner to now justify the massive AIG bailout, the imposition of draconian restrictions on derivatives, capital requirements of banks and yet at the same time suggest that there was no threat to then AIG CDS counterparties, effectively admitting his decision had nothing to do with systematic risk?

The Wall Street Journal in their editorial of September 13, 2009 said it best (here), 

“If recent history is any guide, when the feds stage their next intervention, they will not define “systemic risk” and they will refuse to release the data underlying their decision. To this day, taxpayers can only guess at the specific reasons behind the ad hoc rescues that began with Bear Stearns in March of 2008. Now Team Obama seeks to codify the bailout policies of the last 18 months.

Before receiving authority for new adventures across U.S. commerce, financial regulators should explain their current interventions. The basic questions: How exactly does the government measure systemic risk, and how do regulators know that the U.S. economy can’t live without a particular firm? Americans still don’t know why Bear, Citigroup and AIG were saved, but Lehman wasn’t.” 

On the Seeking Alpha blog, Charles Lieberman suggests that size had nothing to do with the credit crisis,( here)

If corporation size was not the cause of crisis, if several large financial firms were unlikely to fail without TARP funds, if the Treasury Secretary then the head of the NY Fed was unconcerned about systematic risk, then why the rush to bail out those Too Big Too Fail?  Why the rush to break up larger firms? 

Does this amendment allow the Federal Government to become the largest predator in the country, whose main objective seems to be more aligned with its own survival and the expansion rather than to expand competition in the economy?  Is this legislation simply another attempt to deliver additional leverage to the Federal Government to exert control over the private sector and thus shaping the economy in its own image, regardless of the choice of the electorate, the taxpayers and consumers? Given the apparent lack of logic in the Federal Government’s choice of winners and losers over the past year, how would the proposed amendment benefit the economy?  

And why if Senator Sanders is truly serious about preemptively breaking up firms that are “Too Big Too Fail” wouldn’t he be actively seeking the break up and replacement Fannie Mae and Freddie Mac, who along with the FHA currently account for nearly 90% of all residential mortgage lending and 40% of all apartment lending?  Instead Sanders, Congress, the Federal Housing Financing Agency and the Treasury are re-negotiating to extend the GSE’s government financing plan under more favorable terms
Tell ’em where you saw it. Http://www.victoriataft.com

Obama Desperate: "The Federal Government Will Go Bankrupt" Without ObamaCare. Hey, He Forgot the One About People Dying in the Streets…

And the rest of the country predicts dire consequences if it is.
He made the statement on ABC News tonight.

“If we don’t pass it, here’s the guarantee….your premiums will go up, your employers are going to load up more costs on you,” Obama said. “If we don’t do this, nobody argues with the fact that health care costs are going to consume the entire federal budget.”

Hey, he missed the part about Grandma being thrown into the snow!

Tell ’em where you saw it. Http://www.victoriataft.com

Pelosi Rips Rug Out From Under Obama

On page 10 of Pelosi’s 2006 campaign booklet, “A New Direction For America,” we see,

“To Defeat Terrorists and Stop the Spread of Weapons of Mass Destruction, we will:
Eliminate Osama Bin Laden, destroy terrorist networks like al Qaeda, finish the job in Afghanistan, and end the threat posed by the Taliban.

Double the size of our Special Forces, increase our human intelligence capabilities, and ensure our intelligence is free from political pressure.”

After seizing power in 2007 and opposing Bush at every turn on Iraq, she said on January 29,

“Many of us have been convinced for some time that additional forces would benefit the forgotten war in Afghanistan. We are pleased our commanders will now have larger numbers of American troops to prepare for challenging operations in the spring.”

She also said in December,

“Democrats might consider new war funding for Afghanistan before leaving Washington next week, but the majority remains opposed to appropriating any more money for the war in Iraq this year.”

She added,

“There will probably be some level of addressing Afghanistan; some of the domestic concerns about – you’ve seen the list that the DOD has come up with – we can address those concerns and certainly, perhaps, if more is needed to do something about Afghanistan.”

On December 16, 2009, now that much of what she was calling for may be coming to pass, she now says,

“rallying votes for troop surge in Afghanistan will be Obama’s job” adding, “she is finished asking her colleagues to back wars that they do not support.”

Are you ready to throw these liars out yet?

Tell ’em where you saw it. Http://www.victoriataft.com