Tag Archive for Fannie Mae/Freddie Mac

Can You Define What A ‘Financial Institution’ Is Defined As In the Bailout Legislation (TARP)? Don’t Worry, Hank Paulson Can’t Either

November 19, 2008 Business and Economy, Government No comments

I know it’s starting to look like we’re piling on Treasury Secretary Hank Paulson, and we are–for good reason.

Read this story and try to justify why this empty suit is still in office.

What is the definition of a financial institution under the Troubled Assets Relief Program (TARP), Treasury Secretary Henry Paulson was asked on Tuesday. He couldn’t give a specific answer.

Rep. Jeb Hensarling (R-Tex.), a member of the House Financial Services Committee, told Paulson he recently read about a group of plumbing contractors who were applying for TARP funds. They wanted to use the money to refurbish foreclosed properties, and they made the case that doing so qualified them as a financial institution.

“And so in your mind, since you are essentially in charge of disbursing the funds, can your give me a clearer, black-and-white definition of what a financial institution is?” Hensarling asked Paulson.

“Congressman, I can’t,” Paulson responded. “We have a broad definition, we got very broad authorities and powers [from Congress], and I think that’s appropriate.

This just gets worse every day.

Hank Paulson Expands Scope Of Financial Industry Bailout

November 12, 2008 Business and Economy No comments

Shocking, I know. I mean, who couldn’t see this coming?

Treasury Secretary Henry Paulson said Wednesday that the government would broaden the reach of its $700 billion bailout plan to support non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.

In this second stage of the bailout, officials also hope to attract private capital, possibly through matching investments, to give the government’s injections more heft.

Paulson also said the government is no longer planning to buy troubled mortgage assets, the original goal of the plan. And officials are continuing to examine ways to help homeowners and slow the tide of foreclosures.

I hate to say I told you so, but…I told you so! And if you think this is far as it will go you’re mistaken. This is only the beginning.

White House: Bailout Isn’t Socialism Because We Say It Isn’t

November 10, 2008 Business and Economy No comments

Look at what Bush’s White House has become, and just remember, it’s only going to get worse with The Messiah in there in a couple of months:

The federal government’s $700 billion bailout of Wall Street, which includes purchasing shares in the nation’s banks, does not undermine free market capitalism, the White House said on Friday.

“We’re very, very far away from that line of socialism, wherever that’s drawn out there,” White House spokesman Tony Fratto said.

“Every action that we have taken, going back to the actions to prevent the total collapse of Bear, Stearns and making sure that that was worked out in an appropriate way until the very recent actions with the TARP program, have been all about one thing, and that is preventing the systemic breakdown in our economy,” Fratto continued.

“There’s absolutely zero appetite for government ownership and government control of private businesses, and that should be clear to everyone,” he added.

This is more of the same, justifying socialism. I love how this White House stooge tries to calm fears by stating that the government doesn’t have an “appetite” for ownership of private businesses. So that makes it all right? No, it doesn’t, and besides, I don’t buy it anyway.

I’m going to keep stating over and over again folks: This bailout was nothing more than a socialist springboard for Barack Obama.

What Was That About Taxpayers Receiving Any Profit From The Bailout?

October 30, 2008 Business and Economy No comments

So you think you as a taxpayer (and now shareholder of several banks) will be receiving some of the profit the government gets when the housing market rebounds and home values appreciate? Think again.

Barney Frank is telling you what I have been saying since the conception of the bailout: You’re not getting a refund, dividend, capital gains, or whatever you want to call it.

If the $700 billion financial bailout is “managed correctly,” said Democratic presidential candidate Barack Obama in early October, “every penny … will go directly back to the American people.”

But that’s not what the bailout bill says, and House Financial Services Chairman Barney Frank (D-Mass.) explained to CNSNews.com that any profits from the bailout over time will go to the U.S. Treasury to pay down the federal debt.

Any revenue from the bailout, “goes into the Treasury,” said Frank, who added that “paying down the debt does benefit the federal government — it does benefit the taxpayers.” But it does not go directly back to the taxpayers.

Noticed how Frank mentions how it benefits the federal government first, and then as sort of an afterthought he throws in how it will benefit the taxpayers. It’s all about the government with the socialists liberals.

U.S. Government Can Keep Ownership of Banks as Long as It Wants

October 20, 2008 Business and Economy, Government No comments

As we have been saying folks this bailout and the subsequent ownership power it has given to the United States government is a potential springboard to a form of socialism.

One of my primary questions as finally been answered: When does the government have to relinquish ownership in the banks and other institutions it now holds as a result of the bailout?

Answer: Never.

The U.S. government is under no obligation, ever, to surrender any of the assets it purchases as part of the federal financial bailout plan, a Treasury Department official told CNSNews.com on Friday.

That includes the ownership interest the Treasury is buying in nine major banks and the shares it hopes to purchase in perhaps hundreds of other smaller banks around the country.

“It would be (left) up to the government’s discretion as to when they would want to sell it (private assets) back,” spokeswoman Jennifer Zuccarelli said.

Under the bill signed by President Bush, only the Treasury Secretary’s purchase authority is set to expire, not the authority to hold or relinquish assets held by the government.

“We can hold them for as long as we want,” she said. “We just can’t purchase after that date.”

Now it’s possible, indeed likely, that a McCain administration would sell the government’s ownership stake, but it’s not a forgone conclusion. Moreover, in an Obama administration the prospects for selling the ownership stake go down significantly in my opinion.

This is precisely what I have been trying to stress about this bailout. Yes, the $700 billion part isn’t good, but it’s the government ownership and the duration of that ownership that ought to scare you more.

I truly believe we’re headed for some heated showdowns over this in the next couple of years. This is a much bigger issue than people realize.

Bush: “Government’s role will be limited and temporary”

October 15, 2008 Business and Economy No comments

That statement from President Bush includes my two primary issues with this bailout–scope and time frame.

Let’s take the first part of his statement regarding the scope of government interference ownership. He makes that claim that the government’s role will be limited, but limited relative to what–complete ownership of every company in the banking industry, or having an ownership stake in companies in other industries? If that’s our baseline, then yes, the government’s role is limited, but if the free-market is our baseline then any government ownership of a company isn’t really limited at all.

The second part is the most troubling to me. What is temporary and who decides when the government should relinquish ownership? Will it be before the next president takes office? I highly doubt it. You see what I’m driving at?

Let me be clearer: there is a real chance that Barack Obama could be president by late January and we know Obama is a radical “spread-the-wealth-around” socialist. This bailout, and more importantly, the authority given to the President and the Treasury Secretary behind this bailout, gives Obama a potential catapult for more widespread socialistic policies.

What is stop to Obama and his Treasury Secretary, along with a Democrat controlled Congress, from coming back and telling us that the government needs to take ownership of other companies in a wide range of industries and for a longer than expected time for the sake of the economy?

Absolutely nothing. That ought to scare any so-called conservatives who supported this bailout.

Always remember the Law of Unintended Consequences. Or maybe wide spread socialism is the intended consequence.

Bailout Plan Secretly In The Works For “Many Months?”

October 9, 2008 Business and Economy, Government No comments

Well it would appear that way at least according to this profile of the guy tapped to distribute the $700 billion:

Kashkari, it turns out, was one of the original authors of the bailout plan. In a secretive effort over “many, many months,” he was a part of a small team at Treasury working on the plan, said David H. McCormick, under secretary for international affairs.

Why is this fact not a big story? Hank Paulson tells us two weeks ago that we had to pass the bailout immediately because things are so bad. If they have been working on contingencies for “many, many months,” Why wasn’t something other than the bailout proposed months ago? Clearly the folks at Treasury saw this problem coming down the line. Why was this worked on so secretly? Please don’t tell me it was kept secret to avoid panic in the financial markets.

What’s absolutely mind-boggling is to read some so-called conservatives making the case for socialism, or trying to spin the bailout in way to make it seem less socialistic. Take this post over at RedState titled “The conservative case for socialism.” Now that title is a bit misleading because the author isn’t claiming the bailout is a form of socialism, he’s instead trying to make the pill easier to swallow by arguing the bailout isn’t socialism:

However I think the word ‘socialist’ is being used too broadly now, without much thought, and as the hammer to drive a reflex rejection of government action. I believe that while this reflex just happens to be useful most of the time, due to the massive expansion of the government in the period 1933-1980, but to be always opposed to government is a liberal (read libertarian in modern language) reflex, not a conservative one.

I assert that the financial recovery bill, and other interventions being made by the Treasury and the Federal Reserve are precisely that. We are not taking a planning role in the economy, outside of the bounds of the Constitution; we are taking control of our money supply, which is one of the duties of the government. We are not confiscating property; we are buying property at prices that are too high if anything.

What we are doing now is a supply-side intervention. The Treasury and the Federal Reserve trying to preserve the ability of the producers in this economy to get the credit they need to produce, to hire, and to grow this economy.

What?

Let’s take the following point first:

We are not confiscating property; we are buying property at prices that are too high if anything.

While it’s true that the government isn’t confiscating property, it is buying property. Last time I checked, when someone buys something they typically own it. Therefore the government now owns a good portion of the housing and financial industries.

Next:

We are not taking a planning role in the economy

Well I would argue that the financial industry sufficiently flows into the supply chain of most producers and manufacturers, giving the government–at the very least-indirect control over some planning aspects.

It is truly amazing and frightening to see some conservatives trying to explain this step towards socialism away, and tomorrow they will be telling us that they are free-market capitalists.

You think full-blown socialism can’t make it here to America? Think again. Why couldn’t it when you have supposed conservatives telling us this bailout that we know is socialist simply because it doesn’t perfectly fit the technical definition of socialism?

When the so-called anti-socialists are defending quasi-socialism we have a lot to be concerned about.

13 Republican Senators Vote Against Fannie Mae/Freddie Mac Socialist Bailout

July 28, 2008 Business and Economy No comments

These 13 Senators should be applauded for voting against the socialist bailout of Fannie and Freddie:

  • Barrasso (R-WY)
  • Coburn (R-OK)
  • Corker (R-TN)
  • Cornyn (R-TX)
  • DeMint (R-SC)
  • Ensign (R-NV)
  • Enzi (R-WY)
  • Grassley (R-IA)
  • Hatch (R-UT)
  • Hutchinson (R-TX)
  • Kyl (R-AZ)
  • Thune (R-SD)
  • Vitter (R-LA)

There were some notable Senators who did vote including Jim Bunning (R-KY), “The Messiah” a.k.a Barack Hussein Obama (D-IL)( he was too busy proclaiming his World citizenship), and John McCain (R-AZ).

Senator Jim Bunning Questions Globalist Stooge Paulson on Socialist Bailout

July 17, 2008 Business and Economy, Government One comment

As I have said before there are a handful of strong conservatives in the Senate. Jim Bunning happens to be one.

Here’s a clip of him rightfully calling out so-called Treasury Secretary Hank Paulson:

Look at Paulson. He looked dumbfounded. He and Bernanke don’t even know what’s in the bill, but rest assured: he believes what he’s saying.”And to think we consider these people experts.

At least someone in the Senate sees in the insanity in this.

What I love is how all of the globalists like Hank Paulson tell us to “Let the free market and competition determine prices and success” when it comes to trade with China, but when their globalist buddies are in danger well then it’s certainly time for the government to step in.

You can’t have it both ways, Secretary. By your logic, the free market system worked here. Fannie and Freddie were allowed to grant mortgages to whomever they wanted, without government interference, and the market has spoken. They made some bad lending decisions.

Just look at it this way: the market weeded out the inferior competition.

No bailout is needed here. If Fannie and Freddie survive they will have an opportunity to learn from the mistake of lending to any- and everyone.

That’s called market capitalism.