As if the Fannie Mae and Freddie Mac (Fan and Fred) crackups weren't bad enough, IBDeditorials.com noted on Thursday evening that another bad-mortgage shoe is about to drop. This time it's at the Federal Housing Authority (FHA).
First, let's revisit Fan and Fred to remind readers just how complete the disaster has been at these decades in the making Democratic crony-controlled entities.
A little-noticed CNNMoney.com item by Chris Isidore in late July told us what the original announced loss estimate had been a year earlier (bolds are mine throughout this post):
When Congress was debating the bailout of Fannie and Freddie last July (of 2008), the official estimate from the Congressional Budget Office was that a bailout would most likely cost taxpayers $25 billion, with only a 5% chance of the price tag reaching $100 billion between them.
Isidiore then noted that just one year later the loss estimate had doubled:
It isn't often that one can see two decades of history re-written in under ten minutes. But such was the occasion on this morning's episode of Morning Joe. Max Blumenthal, author of "Republican Gomorrah: Inside the Movement that Shattered the Party," spent his time on the show demonstrating the combined power of cognitive dissonance, wanton ignorance, and a willingness to re-write historical fact.
Let's take it in chronological order, shall we?
First, Blumenthal is asked to present the major thesis of his book:
No, that's not a made-up headline. The foreclosed and/or evicted homeowners that have played such a role in the current economic meltdown - are they irresponsible borrowers that lived beyond their means or are victims that got swindled? Michael Moore is clear on where he thinks they fall.
Moore matched up with Fox News and conservative talk radio host Sean Hannity on Hannity's Oct. 6 program and Hannity attempted to have Moore explain why he didn't think there was a personal responsibility angle to the home foreclosure crisis.
Here's how it unfolded (emphasis added):
HANNITY: If you put your name on the dotted line in a legal document, don't you bear responsibility? MOORE: These people have been deceived and they've been exploited. You know, this is like - this is like ... HANNITY: No responsibility at all for them? MOORE: No, this is like asking a woman how short was your skirt after she's been raped.
In early July, following the very first month after Chrysler LLC emerged from bankruptcy, the Associated Press, in an unbylined report about changes in the company's board, saved this little nugget for the last of its eight paragraphs:
Chrysler's poor June performance also casts doubt on whether the U.S. government's $7 billion allocation will be enough to get the automaker through the U.S. sales slump, which is projected to last into next year.
Those doubts are growing. In a report on Chrysler's just-announced management shakeup, AP auto writers Tom Krisher and Dee-Ann Durbin began their report by ringing the alarm (bolds are mine):
With sales down sharply and pressure to start generating cash before government loans run out, Chrysler CEO Sergio Marchionne shook up his executive team Monday, replacing two of his brand managers after just four months and splitting Dodge into car and truck units.
Reviewing September's detailed sales results in the car business carried at the Wall Street Journal, three things stick out immediately:
The awful performance at General Motors -- down 45% from September 2008.
Chrysler's even worse performance -- down "only" 42% from September 2008, but a mind-boggling 61% from September 2007 (62,197 in 2009, 156,799 in 2007)
Ford's tiny decline of only 6% from a year ago, despite the end of the Cash For Clunkers program in August.
No other major maker had a year-over-year September decline that was even half of that seen at GM or Chrysler.
Yet the press, while beginning to acknowledge serious problems at the companies, both of which were first bailed out by the government and then taken through government-orchestrated, contract law-violating, UAW-favoring bankruptcies (GM discussed here, Chrysler here), still will not entertain the possibility, despite the evidence, that consumers are shunning them because of their bailed-out status and their heavy-handed tactics in bankruptcy.
What follows are excerpts from three reports that covered September's industry results.
Scary times ahead? Perhaps, if you take credence in what Rep. Ron Paul, R-Texas, says.
Paul, who had a strong grassroots following during the 2008 presidential election, explained on Glenn Beck's Sept. 30 radio program that perilous times lie ahead due to the Federal Reserve's loose monetary policy. Host Glenn Beck asked if voices on the left, including the left-wing media, were right - would there be violence and is this an effort to pin it on the conservative movement.
Beck began by asking how an Israeli strike against Iran might trigger problems with the American financial system.
In a Chicago Tribune article today that appears to open as an attempt at humor but quickly devolves into nastiness, NPR-dependent radio host and author Garrison Keillor, among other things, attacks social conservatives, blames them and not those who have brought legal actions for years-long fights over keeping religious symbols right where they are, and -- while conveniently forgetting that Republican Mitt Romney gave us the Massachusetts disaster known as CommonwealthCare that current Bay State Democratic governor Deval Patrick considers the model for ObamaCare -- ponders the pros and cons of cutting Republicans "out of the health-care system entirely."
There are few if any indications in the last 2/3 of his column that Keillor was attempting anything resembling humor. If he was, he failed.
The headline and the first paragraph from this Friday Wall Street Journal report by Josh Mitchell and Stephen Power reads like a bad joke Jay Leno's writers would have discarded, because no one would believe it. The second paragraph isn't much better:
Gore-Backed Car Firm Gets Large U.S. Loan
A tiny car company backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car in Finland that will sell for about $89,000.
The award this week to California startup Fisker Automotive Inc. follows a $465 million government loan to Tesla Motors Inc., purveyors of a $109,000 British-built electric Roadster. Tesla is a California startup focusing on all-electric vehicles, with a number of celebrity endorsements that is backed by investors that have contributed to Democratic campaigns.
That's a combined total of just shy of a billion dollars going to two companies currently making toys for the wealthy under circumstantially suspect conditions.
The progressive mindset is a curious one, as evidenced by New York Times columnist and Nobel Economics Prize recipient Paul Krugman.
Krugman appeared on MSNBC's Sept. 23 "The Rachel Maddow Show" and lamented that the Obama Administration missed the opportunity the recent financial crisis offered to fundamentally change how the American economy operates. Host Rachel Maddow asked Krugman what the Great Depression taught economists when it comes to avoiding a repeat.
"It taught us a lot about how to avoid one, which is that you really have to, have to put some constraints. I mean, it sort of roughly, banking is very useful but extremely dangerous and banks have to have all kinds of - you know, fencing put around them as a protection. They have to have some guarantees so that we don't have bank runs, so people know their money is safe. But then, we also have some regulation so that bankers don't take huge risks with other people's money on a ‘heads I win, tails you lose' basis."
If any policy maker watches Michael Moore's new movie, "Capitalism: A Love Story" and is influenced by it - be afraid, be very afraid.
Moore appeared on CNN's Sept. 23 "Larry King Live" to promote his movie, but he shared with host Larry King his thoughts on why the stock market has rallied off its lows, despite a rising unemployment. His reasoning - Wall Street likes joblessness, because it's more for them. Moore outright told King Wall Street wants people unemployed.
"It's crazy, isn't it?" Moore said. "I'll tell you why: Because your employees are your biggest expense. And, as you've noticed in the last few months, as the unemployment rate has gone up, so has the Dow Jones. Now, you'd think, you know - that Wall Street would respond with, ‘Oh my God, unemployment is going up, you know, this is bad for business.' But the reality is, is that Wall Street likes that. They like it when companies fire people because immediately the bottom line is going to show a larger profit."
Millionaire Michael Moore says capitalism is evil and that the entire system should be thrown out for one that is "democratic" and "fair."
That's the overarching message of Moore's new documentary, "Capitalism: A Love Story," which will be widely released Oct. 2. The film won two prizes at the Venice Film Festival and was lauded by critics there and at the Toronto Film Festival. Now Moore is being warmly greeting in softball interviews by television anchors and reporters - particularly on ABC.
ABC's "Nightline" ran an 8-minute long segment Sept. 22 interviewing Moore and showing clips of his film, an it received an additional five minutes on "Good Morning America" Sept. 23. ABC didn't include a single critic of Moore in those 13 minutes, and neither segment rebuked Moore for past lies in his movies.
The film has generated uncritical buzz among many other news outlets including MSNBC, The New York Times, Associated Press and "The Jay Leno Show." He is also scheduled to be a guest of "Larry King Live," "The Situation Room," and "The View" Sept. 23 and 24. Four networks, a wire service and three out of five major newspapers will have covered the movie in the span of a week.
In less than 24 hours, ABC devoted 13 minutes to rhapsodizing over liberal Michael Moore’s new, "deeply Christian" film, Capitalism: A Love Story. Featuring the director first on Tuesday’s Nightline, co-anchor Terry Moran took his socialistic agenda seriously and opened the show by teasing, "Is capitalism evil?" (In 2007, the network contributed 21 minutes to Sicko, totaling 34 minutes of promotion for the two films.)
On Wednesday’s Good Morning America, co-host Chris Cuomo cooed, "Many critics are calling the documentary Moore's best ever." He also raved, "You demonstrate the [capitalism] question very well in the new movie. And you do it lots of different ways. People will get where you’re coming from."
On Nightline, Moran offered a few tough questions to the filmmaker, but made no effort to hide his admiration. He extolled, "He's an American populist in the grand tradition, a provocateur, a comic, a rhetorical bomb thrower." The ABC host marveled that Moore hates capitalism "with a savagely funny...and surprisingly religious passion."
ABC's "World News" is supposed to be above the fray, right? According to "World News" executive Jon Banner, his program didn't jump into covering the recent ACORN scandal because it is "not in the business of noise."
Earlier in the day, on four Sunday morning network news programs, President Barack Obama had urged the media not to engage in Taibbi's specialty. The networks shouldn't air rude, angry political behavior, because that only encourages it, the president said. ABC must have missed that memo.
Interviewing Barney Frank this morning on proposals to regulate the financial markets, MSNBC's Dylan Ratigan seemed set on appeasing the notoriously rude representative. Ratigan had surely seen the video of Mark Haines' CNBC interview of Frank back in June, and was determined not to suffer the same fate, in which Frank ripped off his earpiece and ended the segment short.
Even before posing his first question to Frank, Ratigan began by laying a sop at the great man's feet: "I know you're working very hard on this legislation. And before we begin, I had a lot of folks come to me and say listen, make sure you thank the representative for his efforts to try to deal with this. You are dealing with an incredibly complicated problem with a variety of issues. So I wanted to pass along the appreciation of your efforts before we begin this conversation."
His tribute to Frank didn't spare Ratigan a reprimand when later on he dared to get in a word edgewise. So Ratigan naturally concluded the interview . . . by apologizing to Frank for having interrupted him.
Somebody really needs to find the Associated Press's Martin Crutsinger some OCD therapy. It seems that he has a not-magnificent obsession with the two major theaters of the War on Terror (yeah, I still call it that), and that he seemingly won't be able to conquer it without outside intervention.
In his report on August's federal budget deficit, the AP reporter continued to cite the wars in Iraq and Afghanistan as contributors to the increase in the federal budget deficit, when they are in fact virtually if not totally irrelevant. Additionally, he betrayed a critical misunderstanding of how the government has decided to account for "investments" the Treasury Department has made in many financial entities, General Motors, and Chrysler.
This is the third consecutive month for Crutsinger's war-connected crud:
Not everyone at the NBC Universal umbrella of networks got the gag order memo about the Sept. 12 march on Washington, D.C.
Rick Santelli, who has been a target of the Obama White House and is credited with being the inspiration for the 2009 tea party movement, spoke out about how the media ignored the march. But, a year after the fall of Lehman Brothers, he was making the larger point that the government's intervention to thwart a financial crisis had been an ineffectual and potentially dangerous maneuver at the expense of taxpayers.
"I think this one-year anniversary is great, but I think it's great for another reason," Santelli said on CNBC's Sept. 14 "Squawk Box." "I think someday we'll learn that we didn't need to do very much, that time heals all wounds and you don't have to go broke in the process."
Nightline correspondent Vicki Mabrey profiled self-described "financial terrorist" Bruce Marks on Friday, painting his actions in a religious light as a "revival of spirits" and "hopes." Co-host Cynthia McFadden began the show by rhapsodizing, "The financial terrorist. He’s on the front lines of the foreclosure front using guerrilla tactics on a crusade to restore the American dream."
She continued, "And he's taking dead aim at the big banks. Is there anything he could do for you?" Mabrey did offer Neighborhood Assistance Corporation of America (NACA) CEO Marks a few tough questions, noting that his organization, which tries to help homeowners restructure their loans, also uses extreme tactics, such as protesting outside the homes and schools of the children of financial executives.
Give Sharon Silke Carty of USA Today credit for unearthing important information about the serious back-office problems with Uncle Sam's Car Allowance Rebate System (CARS) program, popularly known as "Cash for Clunkers."
But Carty didn't do nearly as much as she could have with the information she learned. Her most grievous oversights were her failures to compare the government's newly promised payment timetable to the 10 days dealers were told to expect, and to explain to her readers the extra unreimbursed costs dealers will have incurred as a result of the program even if (emphasis if) dealers receive full payment for their Clunker transactions.
Correspondent Richard Quest made a frivolous attempt to tie the bad economy to men’s fashion on CNN’s Newsroom program on Tuesday. Quest proclaimed that pinstriped business suits are “old-fashioned...and out of touch with reality....because they are the pinstripe of bankers.” He continued that if you wore such attire, “you may be mistaken for one of those bankers reaping bonuses.”
Anchor Kyra Phillips introduced the CNN correspondent just before the bottom of the 1 pm Eastern hour, noting that “the global financial crisis has taken a toll everywhere, including men’s suits. That old business stand by, the pinstripe- well, it’s being hit especially hard.” Phillips turned to Quest, who immediately started joking around with his colleague. One might have guessed that Jeanne Moos, the network’s usual purveyor of light reports, was away on a late summer vacation, so they got the British correspondent to stand in for her.
They warned back in 2008 what might happen if Barack Obama was elected president, and according to conservative talk show host Rush Limbaugh and Fox News Channel host Glenn Beck, a lot of bad stuff is unfolding right before our eyes.
Limbaugh appeared on Beck's Aug. 26 program to discuss the threat of the federal government attempting to regulate the media. He explained the president's policy maneuvers were evidence that this can happen - with very limited opposition in the media.
"The stimulus plan - Glenn, look at what they're doing to the U.S. economy," Limbaugh said. "Anybody with a sense of economic literacy would know that this is not how you create jobs. You do not rebuild the private sector. This is being done on purpose. All of these disasters are exactly what Obama wants - the more crises, the better, the more opportunity for government to say let us in and fix the problem. And, with his number one opposition is on radio and Fox News. His number one opposition is on radio. They can't go Fairness Doctrine because it's too obvious. So, they're trying to do this backdoor route with diversity and ownership, a 100-percent tax on operating in order to pay public radio because they're supposedly fair."
Try to keep a straight face when you hear this: President Barack Obama isn't getting enough media love.
That's the world view of MSNBC "Hardball" host Chris Matthews - at least when it comes to the economy. According to Matthews, there has been a plethora of positive economic news - from a stock market that has shrugged off the threat of bad liberal policy, i.e. cap-and-trade or ObamaCare, to the actions of newly reappointed Federal Reserve Chairman Ben Bernanke of pumping liquidity into the economy.
"What do you make of this whole thing about the good economic news out there the president gets no credit for?" Matthews said on his Aug. 25 show. "I'm in the stock market. I have suffered like others before and I have seen this comeback - back up to almost 10,000 now. He gets nothing for this. The fact that consumer confidence, which was once closer to the bone, is way up. The fact that the Fed chair has done such a good job in pumping up the money supply and pumping back the economy, and averting a Great Depression - no credit."
Ben Bernanke's able use of monetary policy to steer the economy during the current financial crisis sometimes makes it easy to forget that Bernanke helped steer the ship into that crisis early in his term as Federal Reserve Chairman and a member of the Fed's Board of Governors. That's a point Strategic Forecasting (Stratfor) founder and CEO George Friedman made when asked the likelihood of President Obama reappointing Bernanke.
"Bernanke presided over the events leading up to the greatest financial crisis we've seen in quite a while," Friedman told CNBC's Steve Liesman. "The best that can be said is that he didn't make it any worse than he already made it. The president is not going to be wanting to reappoint the man that most of the country regards as responsible for the problem."
On Friday’s CBS Evening News, correspondent Sharyl Attkisson filed a report recounting mortgage company Countrywide Financial’s history of offering special deals on loans to government officials – including figures with connections to President Clinton, President Bush, and President Obama. But, while the two most prominent figures currently still in government who are implicated in the scandal are Democratic Senators Christopher Dodd and Kent Conrad, neither Senator was identified by Attkisson as a Democrat. Even while soundbites of the two Senators were shown, there was not even an on-screen label showing the party of either Senator. Until the end of the story, the only clue viewers had as to either Senator’s party was when Attkisson identified Dodd as being the "head" of a Senate committee.
But later, the CBS correspondent did more directly link one other figure to Republican members of Congress as she read documentation citing Countrywide’s interest in a former House committee counsel, Clinton Jones. Quoting an "internal Countrywide email," Attkisson described him as "‘an advisor to ranking Republican members of Congress responsible for legislation of interest [to Countrywide].’"
It was not until the end of the report, after a soundbite of Republican Congressman Darrell Issa – whose party was labeled on screen – complaining about Countrywide’s actions, that Attkisson finally hinted that Democrats may have more to fear from the scandal as she relayed that "Democrats are blocking a Republican effort to subpoena Countrywide documents."
As the DOW hit 9000 for the first time since January, NBC’s “Today” refused to give up its crusade against big banks. Dylan Ratigan of MSNBC appeared on July 24 to offer his opinion on what caused the economic crisis and what needs to be done in order to prevent another.
Not surprisingly, his answer to one of these questions was government regulation. And here’s a shocker, it was not the answer to the first. Ratigan came out swinging against the bank’s greed that supposedly brought the American economy into “total collapse, essentially” as host Meredith Vieira worded it.
The banks are profiting once again and Meredith Vieira is livid about it. During her July 21 interview with President Obama, Vieira questioned Obama about the banks having the audacity to do what taxpayers bailed them out to do: profit.
“You know I wanted to ask you about Goldman Sachs and JP Morgan reporting these big profits in the second quarter,” Vieira told Obama as they walked through the White House. “And they're talking about bonuses for their employees. People hear that, taxpayers, and they're very frustrated.”
PBS’s Jim Lehrer forwarded several questions with a clear leftward tilt during an interview with President Obama on his Newshour program on Monday. He urged the executive to “crack heads” to get his health care plan passed, and inquired if “taxing the wealthy” was an option to fund it. Lehrer later pressed Mr. Obama on the “huge profits” being made by “big Wall Street banks.”
The PBS anchor led the interview with a sympathetic question on the president’s slipping poll numbers: “Mr. President, it must have been a little unpleasant for you to wake up this morning to see this headline: ‘Washington Post poll shows Obama slipping on key issues, approval rating on health care falls below 50 percent.’ What’s that mean?”
After the president’s initial answer, Lehrer went right to health care, and hinted that the Democrat’s “reform” plan should be passed with little to no congressional input: “As you know, a lot of the commentary over the weekend was that nothing’s going to happen, getting from here to the final hurdle here, unless you really start cracking some heads, and really say, ‘Hey, this is the Obama plan, this is what I want. So much for what this committee wants and that- what that committee wants. Here’s what I want, and I'm going to push and go.’ Are you ready to do that?”
Noel characterized Raum's report as suggesting that "the White House's delay in releasing an update about the budget might be tied to the administration's desire to get controversial bills on healthcare reform and cap and trade passed before Congress and Americans know just how large the deficit really is." That's because the delayed report would more than likely tell the nation that this year's deficit is expected to be even bigger than expected (using proper cash-flow reporting, which I'll get to), and future years' projected deficits are even more likely to be unsustainably high.
Two important things were missing from Raum's report. First, there was a total dearth of detail about how badly the current fiscal year that began on October 1 of last year has gone -- most especially the last quarter. Second, Raum saved until near the end of his report a prediction by one of the wire service's go-to "experts" -- the first such prediction I've seen -- that Gross Domestic Product will contract yet again in the third quarter.
In his report's apparent final incarnation early Tuesday morning, the AP writer:
Told us the amount of June's deficit ($94.3 billion), but didn't disclose the figures for June's receipts ($215.4 billion) or "outlays" ($309.7 billion), or how they compared to June of last year. In doing so, he "succeeded" in concealing the accelerating decline in tax collections.
Didn't tell us that the past month's deficit is by far the worst June ever.
"Forgot," as he did in May, to tell readers that the deficit would be hundreds of billions of dollars higher if it weren't for an "accounting change" retroactively put into place by Treasury in April that changed the definition of "outlays."
Cited the Iraq and Afghanistan wars as contributors to the deficit situation, while not identifying several other expenditure categories that have been worse offenders by far.
Found an economist, without dissent, to support the claim that what the Obama administration has done had to be done.
And that doesn't even count Crutsinger's Krugmanesque rewrites of the history of the 1930s Depression era and 1990s Japan, or the apparatchik-like tone present in a few of his paragraphs.
Last year, banks were “too big to fail” and were arm twisted into taking a federal bailout. Now that many of them have repaid the TARP money, the media deems their profits to be a betrayal of the taxpayers.
NBC “Today” host Meredith Vieira began the segment on Goldman Sachs by pitting the average American against the big companies, “While you may be struggling financially these days, happy days appear to be here again for some companies on wall street, and now they are getting set to pay out some big bonuses.”
Correspondent Melissa Francis also continued this storyline in her report. “With the nation’s unemployment rate moving closer to ten percent, a housing market still plagued by foreclosures and households struggling to make ends meet, it might be hard for most Americans to believe that it’s back to business as usual on Wall Street,” she said.