USviews - September 2008

The subject on most people's minds and tongues, this week, and justifiably so, is the length that the Federal Government has taken to protect big business.

We are witnessing a number of business-altering events such as the Federal Government, virtually entering the insurance business with their 85 billion dollar bail out of AIG, for which they have taken a 79.9% equity position.

This on the heels of taking over Freddie Mac and Fannie Mae to shore up the mortgage business. Now the question that begs to be answered is: Will the government re-write those mortgages, so that the rates are now in line where someone can afford to pay that mortgage. Or will they keep them at the reset rate level that caused the problem in the first place.

Because if they just keep them at the reset level, then our government will also be entering the loans harking business.

Of course, this will not cause any increase in needed personnel, as the one thing Washington is NOT short on is crooks.

While we are on the subject of crooks, perhaps, some commission needs to look into the whole Fannie Mae, Freddie Mac and AIG situation.

It should be abundantly clear that a group of people, who are always trying to get out of doing the business they should be doing in Washington, D.C., are suddenly working weekends.

All this clandestine weekend activity whereby firms like Bear Stearns are sold out for what was effectively $2.00 per share. Talk about a sweetheart of a fire sale deal. Their building, at Madison Ave. & 47th. St. was worth some 1.26 billon dollars, alone.

The following week, they brokered the Fannie Mae and Freddie Mac bail outs and then mid-week (well, imagine that...something done in broad daylight), they propped up AIG with 85 billion because " the failure of such a company would have global financial effects, felt worldwide."

Well, hooray for us in taking the stand of world financial policeman. Only problem is, who among all the countries whose financial markets were stabilized, sent over THEIR check?

Ask our government for that answer. Or ask them who will bail out your business when it fails.

Their strategy has been to acquire the failed Countrywide Mortgage operation and now Merrill Lynch.

Perhaps, they were working on the theory that if you get so big, they Federal Government won't let you fail.

Apparently, they were right because this is exactly the reason that was espoused for rescuing AIG.

" Okay, it looks like AIG will be the one to save. Someone call Lehman Brothers and tell them...sayonara. "

But what really needs to be looked into is that when Freddie Mac and Fannie Mae were taken over, the government scuttled the preferred stock and common stock.

The only ones who would see any money during the liquidation were bond-holders because bonds are debt instruments and always superior in lien position, to preferred stock and common stock.

Would be nice to know how many of the top echelon over at Fannie and Freddie exchanged their stock position for bond positions (oops...I typed blond positions by accident but I caught it and corrected it. Good thing, I didn't leave it as blond positions, everyone would have thought I was talking about what are politicians are really interested in).

Same scenario could have possibly played out with AIG with a stock/bond exchange.

Now, insider trading is where someone uses inside knowledge to make a profit. Well, wouldn't preventing a 100% loss be almost as good as a profit...or would that be better?

I still can't figure it out and I should be pretty good at 4th grade math...I went through it twice.

Well, it is something to think about and, your opinion is welcome, as always. American opinion that is!

P.S. One thing is for certain in our New America...Profits are Privatized and Losses are Socialized.

While we were all concerned with Sunday events like church, youth soccer games, racing home to catch the last half of an NFL game and making an early dinner, the Federal Reserve was on the job.

In another one, of what is becoming, " an emergency Sunday meeting ", the Fed allowed Goldman-Sachs and Morgan Stanley to switch over from Bank Investment Companies to Bank Holding Companies. Just like that.

No such thing as a banking charter necessary, just a couple of guys around a custom-made, overpriced teak conference table, inlaid with mahogany saying. " Ya' know, if you don't let us switch over to a bank holding company today, then we are going out of business tomorrow. "

Goldman-Sachs and Morgan Stanley can now borrow money from the Federal Discount window just like a regular commercial bank. They can even take in deposits, just like the commercial bank around the corner from you.

Now, of course, these institutions (and that is EXACTLY what they see themselves as) will just expect every one to now run to their banks and deposit their monies because after all " we are Goldman-Sachs."

Well, don't worry about me cutting ahead of you in line. I have a problem placing my money in a an " institution " that was probably less than 72 hours away from being a footnote in the financial history of the 21st. century.

Morgan Stanley went a wooin' last week when they scurried down to North Carolina to tell Wachovia just how pretty she was and invite her to the big New York dance.

Lady Wachovia, even though she knew full well that they only came for her money, was blushing at the prospect. She had always wanted to make a splash in New York but, quite frankly, the imperious, blue blood banks of New York always treated them like the Beverly Hillbilly's. Sort of acted like they were trading in possum pelts with men in coon skin caps and not real banking.

Well, now that the Fed has allowed these two investment banks to do the switcheroo, Lady Wachovia is a regional, financial spinster once again.

And if she is waiting for her beau, Morgan, to come back that would be like leaving the porch light on for Jimmy Hoffa.

With the elections upon us, I’m watching everything I can regarding the views and positions of the candidates. So far I have not heard strong evidence from any of them as to how they will improve the education of our children.

I’m going to say what many are thinking. Our educational system started a free fall in the 1960’s when we allowed unqualified teachers in the classroom.

As a former teacher I can say I have seen this first hand. Teachers that do not have a command of the English language…speaking to our children every day. These people are not foreigners…they are homegrown!

We need to set the bar at the same level for all … and testing in English only. And, if you do not pass the test you do not sue or challenge or call in the idiots from the ACLU … you simply find another career path.

Wake up America …the children of the politicians have qualified teachers in their private schools; they could care less about your children.

And as far as the money, we obviously have billions that could be spent on education. Oh wait! What am I thinking … we may need that to bail out yet another “greedy” private business that goes belly up!!

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Not looking to politicize any matters but this interesting article came forwarded by a friend of 40 years in response to the above posting that came out of Florida.

Despite having authored two autobiographies, Barack Obama has never written about his most important executive experience. From 1995 to 1999, he led an education foundation called the Chicago Annenberg Challenge (CAC), and remained on the board until 2001. The group poured more than $100 million into the hands of community organizers and radical education activists.

The CAC was the brainchild of Bill Ayers, a founder of the Weather Underground in the 1960s. Among other feats, Mr. Ayers and his cohorts bombed the Pentagon, and he has never expressed regret for his actions. Barack Obama's first run for the Illinois State Senate was launched at a 1995 gathering at Mr. Ayers's home.

The Obama campaign has struggled to downplay that association. Last April, Sen. Obama dismissed Mr. Ayers as just "a guy who lives in my neighborhood," and "not somebody who I exchange ideas with on a regular basis." Yet documents in the CAC archives make clear that Mr. Ayers and Mr. Obama were partners in the CAC. Those archives are housed in the Richard J. Daley Library at the University of Illinois at Chicago and I've recently spent days looking through them.

The Chicago Annenberg Challenge was created ostensibly to improve Chicago's public schools. The funding came from a national education initiative by Ambassador Walter Annenberg. In early 1995, Mr. Obama was appointed the first chairman of the board, which handled fiscal matters. Mr. Ayers co-chaired the foundation's other key body, the "Collaborative," which shaped education policy.

The CAC's basic functioning has long been known, because its annual reports, evaluations and some board minutes were public. But the Daley archive contains additional board minutes, the Collaborative minutes, and documentation on the groups that CAC funded and rejected. The Daley archives show that Mr. Obama and Mr. Ayers worked as a team to advance the CAC agenda.

One unsettled question is how Mr. Obama, a former community organizer fresh out of law school, could vault to the top of a new foundation? In response to my questions, the Obama campaign issued a statement saying that Mr. Ayers had nothing to do with Obama's "recruitment" to the board. The statement says Deborah Leff and Patricia Albjerg Graham (presidents of other foundations) recruited him. Yet the archives show that, along with Ms. Leff and Ms. Graham, Mr. Ayers was one of a working group of five who assembled the initial board in 1994. Mr. Ayers founded CAC and was its guiding spirit. No one would have been appointed the CAC chairman without his approval.

The CAC's agenda flowed from Mr. Ayers's educational philosophy, which called for infusing students and their parents with a radical political commitment, and which downplayed achievement tests in favor of activism. In the mid-1960s, Mr. Ayers taught at a radical alternative school, and served as a community organizer in Cleveland's ghetto.

In works like "City Kids, City Teachers" and "Teaching the Personal and the Political," Mr. Ayers wrote that teachers should be community organizers dedicated to provoking resistance to American racism and oppression. His preferred alternative? "I'm a radical, Leftist, small 'c' communist," Mr. Ayers said in an interview in Ron Chepesiuk's, "Sixties Radicals," at about the same time Mr. Ayers was forming CAC.

CAC translated Mr. Ayers's radicalism into practice. Instead of funding schools directly, it required schools to affiliate with "external partners," which actually got the money. Proposals from groups focused on math/science achievement were turned down. Instead CAC disbursed money through various far-left community organizers, such as the Association of Community Organizations for Reform Now (or Acorn).

Mr. Obama once conducted "leadership training" seminars with Acorn, and Acorn members also served as volunteers in Mr. Obama's early campaigns. External partners like the South Shore African Village Collaborative and the Dual Language Exchange focused more on political consciousness, Afrocentricity and bilingualism than traditional education. CAC's in-house evaluators comprehensively studied the effects of its grants on the test scores of Chicago public-school students. They found no evidence of educational improvement.

CAC also funded programs designed to promote "leadership" among parents. Ostensibly this was to enable parents to advocate on behalf of their children's education. In practice, it meant funding Mr. Obama's alma mater, the Developing Communities Project, to recruit parents to its overall political agenda. CAC records show that board member Arnold Weber was concerned that parents "organized" by community groups might be viewed by school principals "as a political threat." Mr. Obama arranged meetings with the Collaborative to smooth out Mr. Weber's objections.

The Daley documents show that Mr. Ayers sat as an ex-officio member of the board Mr. Obama chaired through CAC's first year. He also served on the board's governance committee with Mr. Obama, and worked with him to craft CAC bylaws. Mr. Ayers made presentationsto board meetings chaired by Mr. Obama. Mr. Ayers spoke for the Collaborative before the board. Likewise, Mr. Obama periodically spoke for the board at meetings of the Collaborative.

The Obama campaign notes that Mr. Ayers attended only six board meetings, and stresses that the Collaborative lost its "operational role" at CAC after the first year. Yet the Collaborative was demoted to a strictly advisory role largely because of ethical concerns, since the projects of Collaborative members were receiving grants. CAC's own evaluators noted that project accountability was hampered by the board's reluctance to break away from grant decisions made in 1995. So even after Mr. Ayers's formal sway declined, the board largely adhered to the grant program he had put in place.

Mr. Ayers's defenders claim that he has redeemed himself with public-spirited education work. That claim is hard to swallow if you understand that he views his education work as an effort to stoke resistance to an oppressive American system. He likes to stress that he learned of his first teaching job while in jail for a draft-board sit-in. For Mr. Ayers, teaching and his 1960s radicalism are two sides of the same coin.

Mr. Ayers is the founder of the "small schools" movement (heavily funded by CAC), in which individual schools built around specific political themes push students to "confront issues of inequity, war, and violence." He believes teacher education programs should serve as "sites of resistance" to an oppressive system. (His teacher-training programs were also CAC funded.) The point, says Mr. Ayers in his "Teaching Toward Freedom," is to "teach against oppression," against America's history of evil and racism, thereby forcing social transformation.

The Obama campaign has cried foul when Bill Ayers comes up, claiming "guilt by association." Yet the issue here isn't guilt by association; it's guilt by participation. As CAC chairman, Mr. Obama was lending moral and financial support to Mr. Ayers and his radical circle. That is a story even if Mr. Ayers had never planted a single bomb 40 years ago.

With the bank bail out pretty much on the minds of most Americans. Paulson's plan has seemed to hit a snag.

It seems that 55% of Americans are categorically against a plan to bail out a private enterprise and justifiably so. We should just follow the Swedish economic model of having the banks write down the debt, those that survive...survive and those that don't are taken over by our government and re-liquefied with rigid oversight.

In a moment that can only be described as pure chutzpah, Paulson, apparently thought he would stroll over to Capitol Hill and tell them he was there for a blank check and he would pick it up at the end of the week.

Well, Congress didn't quiver, upon his arrival. Some of them must have seen his news conference a few days ago, when in responding to inquiries about the actual mechanics and effects of the plan, looked like a deer caught in the headlights.

So, now there will be Congressional hearings into what went wrong in the banking infrastructure, what effect it will have on the financial ecology and who were the architects of this history-making boondoggle.

But that is the way things are done down inside The Belt Way. Form a committee, involve the FBI and let's make it look like we are really on our game.

Of course, someone must be the altar sacrifice but there will be no crying on the part of this forum.

This will be a catharsis for us citizens of America because we are a nation that manufactures explanations after the fact. If we make it explainable and predictable, then we can deal with it in our own minds.

In the meantime, since the majority of Americans have decided not to join in " the Paulson lock step march ", it became necessary to conjure up some faith-restoring measure, or at least hold public condemnation in abeyance.

So, out of the heartland of America. emerges, the Sage of Omaha, Warren Buffet, head of Berkshire Hathaway, whose image in the financial world is somewhat akin to that of Walter Cronkite in news circles.

The Nebraskan plunks down 5 billion of Berkshire Hathaway money into Goldman-Sachs, states he has faith in the coming bail out plan and tips his hat to all the ladies on the sidewalk, as he rides into the sunset on his trusty horse, Houdini.

Once again, an exculpatory, mitigating buzz word is wending its way into the media clutter of the banking bail out and, as usual, the politicians will beat it to death and the media will keep printing it

See the media loves to get a new phrase they can repeat incessantly with each newscaster and reporter acting as, if they were actually the one who conjured up this new phrase.

Never was this so blatant and misused, as it was back in 2001 when every other sentence included the phrase " weapons of mass destruction."

Every time a microphone was present, some credentialed member of the 4th. estate would showcase the folly of their new phrase.

The most glaring was on 9/11/ when some reporter had to ask, at a news conference: " Do we have any idea, as to how they got this weapon of mass destruction in their hands? "

They should have let a four grader answer that one: " Yes, they BOUGHT a ticket and HI-JACKED the bomb! "

The financial institutions, the politicians and the media are talking about the:

Saddled with? Trying to make this sound as if this happened to them by some outside , uncontrollable force.

They are always looking for some new security to sell, so they had the mortgage industry bundle up all their loans into packages and the street would take them and sell them to institutions such as pension funds and credit unions.

Now, you can sell just about anything to a credit union manger by telling him he is being courted by Wall Street. And some pension fund mangers are even worse.

Normally, the investment houses will keep 20% of a security that they take in and sell 80% off to the institutions. But when they got, these packages in and saw the reset numbers on these adjustable rate mortgages, their greedy little hearts skipped a beat and they decided to keep the majority for themselves.

Anyone who buys into banks being " saddled with toxic assets " is demonstrating that they are in fact, the closest part of the horse to a saddle.

So you thought that the carousel of financial activity between failing brokerage houses and banks was only done on the weekends devoid of the harsh glare of the cameras, huh?

Well, not so. Because in a meeting of the " after hours club ", Washington Mutual was seized by the FDIC and then immediately sold to JP Morgan Chase for 1.9 billion.

In a statement, JPMorgan Chase said it was " not acquiring any senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual's banks, or any assets or liabilities of the holding company, Washington Mutual Inc."

Translated as: " Ahem, we want to make it very clear that we are only taking the good not one lick of bad, as we have no interest in liabilities. "

And I get to tell my wife in the morning that instead of going to Lowes today to pick out wallpaper for the downstairs hall bathroom, we can just use her WAMU stock certificates.

JP Morgan is reaping some fantastic deals but someone has to. There were probably only 5 players who had a shot at getting WAMU from the FDIC and they were Wells Fargo & Co., HSBC, Spain's Banco Santander, Toronto-Dominion Bank of Canada and CitiGroup.

Yes, that is the same CitiGroup that is only in existence because they got an emergency cash infusion from Abu Dhaby, of some 8.5 billion, 6 weeks ago.

The one that must be relishing this whole circus is Jamie Dimon, JPMorgan Chase's chief executive, who was formerly with CitiGroup.

Perhaps, JP Morgan (without the Chase) has always been revered on the Street, as it was JP Morgan, himself, that rescued Wall Street in 1904 when he threw his fortune behind it, as it was failing.

But the scariest part of this " after hours club " meeting was the FDIC concern that the fund, which took a big hit after the seizure of IndyMac Bank, could be depleted by a WaMu seizure.

Perhaps, now public perception about the FDIC may be changed. We sounded the alarm on the FDIC 3 years ago, but apparently, most of the country was out shopping and didn't hear it.

While the intelligentsia huddles down in Washington to foster the bail out, I received the following from my wife's Uncle George, just as an opinion sent out to his nieces and nephews.

I thought the rest of America... and Washington...should be fortunate enough to hear the type of advice we get just by having him over for dinner.

He, of course, didn't even sign it because it was just to family who recognize the e-mal address but I included his name because it is certainly a train of thought well worth recognition.

Hi Pals,

I'm against the $85,000,000,000.00 bailout of AIG and others.

Instead, I'm in favor of giving $85,000,000,000 to America in a We Deserve It Dividend.

To make the math simple, let's assume there are 200,000,000 legitimate U.S. Citizens 18+.

Our population is about 301,000,000 +/- counting every man, woman and child. So 200,000,000 might be a fair stab at adults 18 and up..

So divide 200 million adults 18+ into $85 billion that equals $425,000.00.

My plan is to give $425,000 to every person 18+ as a We Deserve It Dividend.

Of course, it would NOT be tax free.

So let's assume a tax rate of 30%.

Every individual 18+ has to pay $127,500.00 in taxes.

That sends $25,500,000,000 right back to Uncle Sam.

But it means that every adult 18+ has $297,500.00 in their pocket.

A husband and wife team has $595,000.00.

What would you do with $297,500.00 to $595,000.00 in your family?

Pay off your mortgage - housing crisis solved.

Repay college loans - what a great boost to new grads

Put away money for college - it'll be there.

Save in a bank - create money to loan to entrepreneurs.

Buy a new car - create jobs.

Invest in the market - capital drives growth.

Pay for your parent's medical insurance - health care improves.

Enable Deadbeat Dads to come clean - or else.

Remember this is for every adult U S Citizen 18+ including the folks who
lost their jobs at Lehman Brothers and every other company that is cutting
back. And, of course, for those serving in our Armed Forces.

If we're going to re-distribute wealth let's really do it...instead of trickling out a puny,

$1000.00 ("vote buy") economic incentive that is being proposed by one of our candidates

for President.

If we're going to do an $85 billion bailout, let's bail out every adult U S Citizen 18+!

As for AIG and others- liquidate them. Sell off their parts.

Let American General go back to being American General.

Sell off the real estate.

Let the private sector bargain hunters cut it up and clean it up.

Here's my rationale. We deserve it and AIG doesn't.

Sure it's a crazy idea that can "never work."

But can you imagine the Coast-To-Coast Block Party!

How do you spell Economic Boom?

I trust my fellow adult Americans to know how to use the $85 Billion.

We deserve a dividend more than do the geniuses at AIG or in Washington, DC .

And remember, The plan only really costs $59.5 Billion because $25.5 Billion is returned

instantly in taxes to Uncle Sam.

Ahhh...I feel so much better getting that off my chest.

Kindest personal regards,

George Tiefenworth

PS: Feel free to pass this along to your pals as it's either good for a laugh or a tear or a

very sobering thought on how to best use $85 Billion!!

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Comngratulations to diehard Phillie fan, Alan Theress, my high school classmate, living in South Carolina, who saw his Philoies clinch the National league East title today.

Since clinton ended the 1930's regulation that kept investment companies, banks and brokerage houses as seperate entities back in 1995 and let all "financial" institutions dabble in all forms of money business, we have experienced many criminal activities from enron to today's mess.

Although I could do a drawn out analysis, basically what you have is the infection of european socialism that invaded this nation after WWII and infected, first the education system, the military (affirmative action, women, minorities and touchy feely policies). The left wingers adroitly invaded the "humanities" which is education, social services, counseling etc thereby controlling the thoughts and actions of the masses.

Now we have a dumbed down society. Affirmative action disease infected educational norms and policies creating a non inventive, non inquisitive, non free class of middle americans. Each of these elements today not only cost more to operate, but are less effective than in the past.

Affirmative action then invaded the business world, more directly finance institutions. The left wing like Barney Frank, Ted Kennedy, Schumer, Clinton, etc...all created affirmative action regulations on institutions to provide mortgages any minority who would otherwise not be eligible for a mortgage. Interest only loan payments, balloon mortgages and advice that they would be earning more when the mortgage explodes .......really are criminal actions.

Liberalism is truly a disease that is incompatible with capitalism and we are seeing its destructive force.

Now, there you go. Think he has some passion on an issue and you are reading the edited version, so it could be posted.

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Dateline NewJersey 9/28/08 8:31PM

Once again, we post from Ranting Rich, who apparently does not sugar coat his positions and while everyone will, undoubtedly, not agree with him, this is the precise reason why USviews exists.

The Internet is fraught with sanitized forums where editing is the main focus in order to turn out an editorial pablum that assures they stay the course in the middle of the road. What value is that?

On the topic of bail out, these actions are European socialism and apparently our current crop of politicians seeing this as the only way to compete in the global economy. Other countries do it, why not the US?

Not only is it unseemly that CEO's pay themselves disgusting fees for doing little and in many cases actually failing. The politicians feel slighted in not sharing in this booty. The rats in congress have been feeding "action groups" money for years in the guise of social services, community help and improvements.

One of the greatest ploys is multi layering "action" groups… whereby that have learned how to use the foundation concept to move money around relatively undetected.

More directly on the current "bail out", it is already known, but little publicized or reported that thousands of illegals received mortgages through the liberal plan to "give" the American dream to those least deserving.

The core problem is philosophy. The liberal has successfully invoked this guilt and victimization theory into education as a format and basis to learn history, social studies, humanities etc. Hence we have 2 generations now "bleeding" for history and atrocities, many of which precede this nation.

This bail out seems to be ironically timed. At this time refer to the story "Children of the Corn" and the large number of brainwashed youth who eliminate the adults, but have no ability to survive or live in the previous standards provided by the elders and whose experiences are ignored and denied. This generation Y...is the worst in ignoring, denying past experiences of their parents and ancestors. As if all those who lived before were just stupid and acquired no insights to life and humanity.

I am not sure which aspect is more dangerous the complacency or idiocy of people, but both seem to be abundant.

We live in a "Stepford" society where a prayer on a wall is more fearsome than a plane flying into a skyscraper.

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It appears as if the language is intact on the bail out plan and it moves to a vote Monday. Needless to say, it will require some arm-twisting but by Wednesday, it should be passed in full.

How did he know where to go and how did he know how to do anything other than vote Present? "

"This isn't about a bailout of Wall Street, it's a buy-in, so that we can turn our economy around."

Great sound bite Nancy, congratulations to the aide who wrote it. If you have ever seen Pelosi before on camera address an issue, she usually looks like a deer caught in the headlights or someone who managed to get out of her canvas blazer, with the buttons in the back, and walk out with the rest of the people on visitor's day.

Sen. Chris Dodd, chairman of the Senate Banking, Housing and Urban Affairs Committee: Now here is some confidence for us:

"I don't know of anyone here who wants the center of the economic universe to be Washington. The center of gravity is here temporarily. ... God forbid it's here any longer than it takes to get credit moving again."

"This is the bottom line: If we do not do this, the trauma, the chaos and the disruption to everyday Americans' lives will be overwhelming, and that's a price we can't afford to risk paying."

So, this definitive plan is in action but look at the wording of the part that could help homeowners:

" To help struggling homeowners, the plan would require the government to try renegotiating the bad mortgages it acquires with the aim of lowering borrowers' monthly payments, so they can keep their homes."

God bless them all, Tiny Tim...they are going to try for all of us. Gee, Willikers. It just gives me goosebumps. I could go for more pudding, right now!