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:
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.
As the Business & Media Institute's Julia Seymour previously reported, the September unemployment data just released by the Bureau of Labor Statistics revealed a larger than expected decline in non-farm payrolls.
Yet, as employers shed another 263,000 workers, the healthcare industry ADDED -- yes, ADDED!!! -- 19,000 employees.
As NewsBusters reported last month, the healthcare industry, despite dire warnings from Democrats and their media minions that it's in a crisis, continues to add to payrolls month after month during this recession.
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.
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:
Since hitting their lows back in March, financial markets have rallied in the wake of last year's financial crisis. The Dow Jones Industrial Average (DJIA) is up 43 percent since March 9. But can it last?
It could be all given up with this rate of government spending according to CNBC "Mad Money" host Jim Cramer. Cramer, responding to a viewer e-mail on his Sept.8 program, explained what a higher national debt would mean to the average citizen and investors in the near and long term. He said expect the market to go down and higher taxes eventually.
"I know that this is going to mean our taxes are going to go way up," Cramer said. "I have to tell you this eventually means this market will come down. It is in when what I call the out years, not to worry about it yet."
It's clear that President Barack Obama's $787-billion stimulus hasn't worked as advertised, but some economists are worried it could backfire and cause something much worse.
According to a new study by economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute and endorsed by Nobel laureate James Buchanan, the Keynesian tactics employed by Obama "will ultimately hamper the long-term growth potential of the U.S. economy and may risk delaying full economic recovery by several years." The study accuses the president of making Depression-era mistakes.
Stephen Moore, member of the Wall Street Journal editorial board and senior economics writer, explained the study on Fox News "On the Record" Sept. 7 and said that the stimulus certainly hasn't lived up to its billing.
On Friday, Uncle Sam's Bureau of Labor Statistics reported that the nation's unemployment rate rose to a seasonally adjusted 9.7% in August, and that the economy lost another 216,000 seasonally adjusted jobs.
In various ways, the press tried to put a happy face on the news and otherwise tried to minimize its impact. It also continued, as it has for years, to ignore what really happened on the ground (i.e., the not seasonally adjusted numbers) during the month; in August, a look at that info punctures any illusion that the employment situation is improving. It also ignored prior-month downward revisions to both June and July totaling 49,000 seasonally adjusted jobs.
Ford and the United Auto Workers are set to begin new contract talks under a set of circumstances radically different from any previously faced by either party. There is the "minor" matter of the union's ownership stakes in General Motors and Chrysler that arose in the wake of those two companies' government-engineered bankruptcy filings, accomplished with more than a little rule-bending by the Obama administration and its car czars.
But you wouldn't learn about any of this, let alone its potential effect on negotiations, from reading coverage of the situation by the Associated Press's Kimberly Johnson. Additionally, there's quite a bit of emphasis on the idea that Ford can supposedly afford to be more generous with pay and benefits than its two major Detroit rivals. How convenient -- for the union and the the other two companies.
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."
On Friday’s CBS Early Show, co-host Maggie Rodriguez interviewed commentator Dick Morris about his latest book critical of the Obama administration, Catastrophe. After reading the book’s full title, Rodriguez observed: "This title, though, Mr. Morris, can’t you see a lot of people dismissing it right off the bat as alarmist? It screams at you."
In response, Morris pointed out the dire state of the economy: "9.5% unemployment, four quarters of negative growth, our car companies in receivership, our health care program about to be taken over, and banks being nationalized, and I’m alarmist?"
Rodriguez replied by citing recent media spin that the recession is over: "Well what about the positive indicators? Because not so long ago, it was on the cover of every magazine, the topic of every cable show and Sunday morning show, that we were kind of digging out of the recession. We saw three straight months of rising home sales, the stock market up more than 40% since March. Ford beat expectations. Doesn’t that count?"
Does the Associated Press's Martin Crutsinger moonlight as a Code Pink operative?
There has to be something that explains what I'll call his Iraqnaphobia.
Last month (at NewsBusters; at BizzyBlog), the AP reporter erroneously cited the cost of the wars in Iraq and Afghanistan as a "major factor" explaining why "the deficit has widened." In a quick review of the related June 2009 Monthly Treasury Statement, I cited three examples of higher spending in other areas of government that were larger than last year, both in dollar and percentage terms, than the $33 billion, 7% increase in total defense spending. NB commenter Arminius further pointed out that "Our military spending amounts to 5 percent of GDP. Iraq and Afghanistan amount to 15 percent of that 5 percent. Obviously, as Tom notes, larger culprits are responsible for the massive deficit."
It's simply not possible that the two wars can be a "major factor." No matter -- This month, in an otherwise fairly decent report, Crutsinger did it again (bold after title is mine):
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."
Times have been tough financially for media companies across the board and satellite radio has been no exception.
On Aug. 6, Sirius XM Radio (NASDAQ:SIRI) posted a second-quarter loss and the company hasn't lived up to expectations after Sirius and XM completed a merger a little over a year ago. According to "CNBC Reports" host Dennis Kneale, part of the satellite radio's problem is shock jock Howard Stern's compensation and the company's debt.
"I feel so, bad - there's, being run by one of what I think is the best executives in media, Mel Karmazin, a great salesman," Kneale said on CNBC's Aug. 6 "Power Lunch." "But in the end, does it turn out they just overpaid for Howard Stern and they have too much debt? I wonder if John Malone bailed them out temporarily hoping that they kind of go belly-up so they can get a hold of those assets really cheap."
Yours truly and others have since April noted a precipitous and likely historic dive in Uncle Sam's monthly collections. Year-over-year declines actually began last summer. The degree of monthly fall-offs has gotten "progressively" worse since then.
Yesterday, the Associated Press finally went beyond blandly reciting year-to-date comparisons to note the historic significance of the cash crash at the Treasury. Even then, Stephen Ohlemacher's report understated the degree of the decline in receipts from economic activity (i.e., excluding last year's stimulus payments, which were treated by Treasury as "negative receipts"). He also only carried his analysis through June 2009, even though sufficient information about the full month of July was available in Treasury's last daily statement of the month released yesterday afternoon.
Is there a double standard in how the struggling economy is being portrayed during the Obama presidency vs. the Bush administration?
While the 1% contraction in the economy reported by the Commerce Department on Friday was seen as a "hopeful sign" by the New York Times, "crystallizing expectations of a turnaround," actual economic growth of 1.9% during the Bush years was just another "arrow" seen pointing to a recession.
Subtitled: "Washington is spending $60 billion to create the careers of the future, but not a single green job yet exists. Obama's 'green czar' explains."
The Leftist publication deserves some plaudits for exploring this $60 billion gaping hole in the $787 billion "stimulus" package President Barack Obama signed into law in February. But there are many points in the article where they could have done better.
It would have been nice, for instance, if Newsweek had exhibited some of the scrutiny they show here in advance of the massive plan's passage. They begin with an interesting realization:
CNBC "Mad Money" host Jim Cramer credits lack of government regulation with a recent market jump in technology stocks. The tech-heavy NASDAQ composite (NASDAQ) shot upward 3 percent, from July 8 through July 23, even defying other market indexes that had down days in the same time period.
"So, now let me explain a pattern that I've discerned that could be incredibly important - important for you to take profits on if President Obama regains his clout and starts pushing hard with the rest of his agenda," Cramer said. "Everyone today wrote him off because of health care. I got to tell you, you can't write this guy off. He's too darn popular."
During an interview with CBS Evening News anchor Katie Couric on Tuesday, President Obama defended the administration’s handling of the economy: "nobody...anticipated that in the first three months, we would lose 700,000 jobs per month...the severity and the depth of the recession was something that, you know, really exceeded everybody's expectations."
However, on the February 6 Evening News, prior to the passage of the Obama stimulus package, correspondent Anthony Mason told Couric: "The size of the job losses last month surprised even most economists. And even if we begin to get a recovery later this year, many say the unemployment rate will continue to rise into next year, topping out somewhere north of 9 percent."
Obama made his claim after Couric asked about the current 9.5% unemployment rate: "Your administration projected that with the stimulus package, as you know, unemployment could be kept under 8%. Well, that was then, this is now." After Obama argued that the job loss "exceeded everybody’s expectations" Couric failed to point out the fact that she had reported on such expectations earlier in the year.
The Associated Press Monday suggested 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.
With this currently a featured link at the Drudge Report, and it coming from the leading wire service in the world, one has to wonder how Obama-loving media -- who all seem behind healthcare reform as well as cap and tax! -- will cover this revelation.
After all, imagine how these same press outlets would be reporting this if George W. Bush was still in office and was proposing tax cuts to get the economy going while delaying such a budget update:
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.
CNBC "Mad Money" host Jim Cramer often showcases erratic and unpredictable behavior and the same goes sometimes for his analysis of the stock market.
While the economy continues to struggle through the recession, the forward-looking indicators known as the financial markets continue to perplex Cramer for not going up when some positive signs, also known as "green shoots" by the financial media, are starting show. According to his analysis - it's the government and a reliance on oil futures that have scared off investors.
"How did we reach this point where investors just can't be bothered to respond to clear unalloyed positives or be tempted by low, low prices of so many stocks?" Cramer said. "I think we've been worn down, I think we've been worn down by two different things - first, the government and then oil. And they're what's keeping everyone apathetic about stocks."
"Fool me once, shame on you; fool me twice, shame on me" That's a saying once bungled by President George W. Bush, to the loud delight of the liberal media. But that same media should keep it in mind as Washington mulls a second round of stimulus spending.
A July 7 Bloomberg story by Shamim Adam reported that Laura Tyson, an economic advisor to the Obama administration, had put forward the notion that the $787 billion approved in February was "a bit too small," and that government should consider a second stimulus package "focusing on infrastructure projects."
Although Senate Majority Leader Harry Reid, D-Nev., maintains there is "no showing that a second stimulus is needed," other members, including House Majority Leader Steny Hoyer in a July 7 Politico article, say it shouldn't be taken off the table.
Why is CNBC's Rick Santelli one of the few press members willing to point out when the emperor isn't wearing any clothes?
As you ponder that important question, consider how Santelli on Tuesday morning recognized how absurd Vice President Joe Biden's Sunday comments were concerning the Obama administration misreading how bad the economy was.
After all, as Santelli marvelously asked: "How many hundreds of times has the current administration talked about the worst recession in history? The worst time since the Depression?"
Question for CNBC Chief Washington Correspondent John Harwood: Where were you six-and-a-half months ago?
Harwood on CNBC's July 6 "Squawk Box" noted that the stimulus was not working quite as well as the Obama Administration had hoped - this coming in the wake of comments from Vice President Joe Biden that the economy was "misread" by the administration. The difficulty with the stimulus, he contended, was the inability of the government to spend such a large sum of money in an effective time period.
"Well, I think they're hoping that this summer period is when they can in fact ramp up the spending," Harwood said. "It's not easy to spend the amount of money that they appropriated, $800 billion, that quickly."
Oh. So. Predictable -- Both what is happening, and how it is being "covered."
Chrysler is barely out of bankruptcy, and there is already concern as to whether the money Uncle Sam, (i.e., U.S. taxpayers) funneled into the company -- while in the process of ripping off and intimidating its secured creditors, capriciously terminating plants and dealers, and running roughshod over long-held notions of fiduciary duty -- will be enough.
Beyond that, how many people know that the magical technology its new owner Fiat, which put no money of its own into the deal, is "more than a year away" from making its way to Chrysler?
"Somehow," the Associated Press's Obamacized news prioritizers decided that the info nuggets contained in the previous two paragraphs should be relegated to the final paragraphs of an unbylined report (also saved at host) this afternoon. The report, including its headline ("Chrysler names remaining directors to new board"), appeared to be merely a droll recitation concerning certain Board members. Only readers getting to the last three of the report's eight paragraphs would have any idea that Chrysler's situation is already a cause for renewed concern about its viability.
Readers here can make what they will of the Board's make-up, but, as noted, the real beef in the AP story is in those final paragraphs (bolds are mine):