HHS Nominee Sebelius Has Tax Problems

Shocker - another Obama nominee, and second nominee for Health & Human Services (following Daschle), Katherine Sebelius, has tax problems.

Again, it's incredible that Democrats, who love to raise everyone's taxes, don't like paying taxes themselves.

*Update*
Even with her problems, she wants to raise your taxes to pass nationalized health care as part of the budget reconciliation process, meaning it would not be subject to filibuster. Can't get legislation passed? Change the rules and ram it through....it's the Chicago Democrat way.

Miss Universe Loves Gitmo

Miss Universe, who is from Venezuela, recently traveled to Guantanamo Bay to visit the U.S. soldiers there and view the camp for herself. She loved it. For the full story, view here (excellent photography, by the way).

Frank Trying to Regulate Comp of All Employees

From Byron York:

...in a little-noticed move, the House Financial Services Committee, led by chairman Barney Frank, has approved a measure that would, in some key ways, go beyond the most draconian features of the original AIG bill. The new legislation, the "Pay for Performance Act of 2009," would impose government controls on the pay of all employees -- not just top executives -- of companies that have received a capital investment from the U.S. government. It would, like the tax measure, be retroactive, changing the terms of compensation agreements already in place. And it would give Treasury Secretary Timothy Geithner extraordinary power to determine the pay of thousands of employees of American companies.

The purpose of the legislation is to "prohibit unreasonable and excessive compensation and compensation not based on performance standards," according to the bill's language. That includes regular pay, bonuses -- everything -- paid to employees of companies in whom the government has a capital stake, including those that have received funds through the Troubled Assets Relief Program, or TARP, as well as Fannie Mae and Freddie Mac.

If we apply those standards to all federal employees, perhaps it would be worth it. The government could close its budget deficit through clawbacks, starting with the president and leaders of Congress.

OneUnited Bank Sells Porsche

Times are tough. Maxine Waters and Barney Frank's favorite little scandalous bank, OneUnited, was forced to sell its company-owned Porsche.

Obama Stimulating Firearm Sales

Ross Kaminsky says that there are some pockets of economic strength due to Obama, notably in firearms and ammunition sales.

According to Rich Wyatt, the voluble and intense owner of Gunsmoke -- a firearms training facility just outside Denver -- “If I had known it would be this good in the gun business, I might have voted for Obama.”

It’s not just a couple of stores seeing a run on guns and even more so on ammunition. From local gun shops to WalMart to sporting goods stores, the story is the same: When the store gets a shipment of ammo, particularly .45, 9mm, and .38 handgun ammunition, “people come in and they buy it all.”

At Dick’s Sporting Goods, they were almost out of .45 ammunition after having received a shipment just that morning. Not only are people buying as much ammunition as they can find and afford, they’re doing it during the work day rather than taking the chance that it will be gone by the weekend.

This is quite amazing. Either people are scared of the possibility of the outlaw of certain guns and ammo, the dramatic tax increases thereon, or are worried about something worse (ie. riots, ACORN agitators, etc.) and want to be prepared to defend themselves. Either way, it's a bit disconcerting.

Frustration with Fluorescent Lightbulbs

From the NY Times:

It sounds like such a simple thing to do: buy some new light bulbs, screw them in, save the planet. But a lot of people these days are finding the new compact fluorescent bulbs anything but simple.

Take the case of Karen Zuercher and her husband, in San Francisco. Inspired by watching the movie “An Inconvenient Truth,” they decided to swap out nearly every incandescent bulb in their home for energy-saving compact fluorescents. Instead of having a satisfying green moment, however, they wound up coping with a mess.

“Here’s my sad collection of bulbs that didn’t work,” Ms. Zuercher said the other day as she pulled a cardboard box containing defunct bulbs from her laundry shelf.

Just think - soon we'll be able to replace the term "light bulb" with "car," "mortgage," "health care," etc.

Shippers to Go the Way of Auto Industry?

The EPA decided that, with exports down some 25% at the Port of New York/New Jersey, now is the time to implement tougher emissions standards on ships. Yes, it will likely dampen trade and dramatically increase costs for goods, but it makes sense in the wonderful new world of Obamaland.

Kudlow: Obama Power Grab Causes Market Selloff

CNBC's Larry Kudlow says that the market decline was fueled by a power grab by Obama, first with Geithner declaring that many banks might not be allowed to repay TARP funds and in fact, might need more, then with Obama playing a Carl Icahn role in forcing out GM's CEO. Kudlow had a few additional observations regarding GM:

And why isn’t Obama’s special auto task force ordering a replacement for Ron Gettelfinger, the UAW’s president? Weren’t their oversized pay and benefit packages a big part of the problem?

Kudlow also reminds us that the new role of GM will not be to turn a profit, but to institute the government's policy goals:

Incidentally, in President Obama’s speech on Monday about the Wagoner firing, as well as in Treasury term sheets for GM and Chrysler, there are multiple references to “the next generation of clean cars,” to new CAFE-standard mileage increases, and to green power-train developments. All this is a big green climate-change priority for the new administration. But the simple fact is, small, tinny, and expensive green cars just don’t work for consumers.

No one should be surprised anymore - we have a socialist President who doesn't like our free market (yet already highly regulated) economy as it exists.

Rising Sea Levels: "The Greatest Lie Ever Told"

From Christopher Booker of the UK Telegraph:

But if there is one scientist who knows more about sea levels than anyone else in the world it is the Swedish geologist and physicist Nils-Axel Mörner, formerly chairman of the INQUA International Commission on Sea Level Change. And the uncompromising verdict of Dr Mörner, who for 35 years has been using every known scientific method to study sea levels all over the globe, is that all this talk about the sea rising is nothing but a colossal scare story.

Despite fluctuations down as well as up, "the sea is not rising," he says. "It hasn't risen in 50 years." If there is any rise this century it will "not be more than 10cm (four inches), with an uncertainty of plus or minus 10cm". And quite apart from examining the hard evidence, he says, the elementary laws of physics (latent heat needed to melt ice) tell us that the apocalypse conjured up by Al Gore and Co could not possibly come about.

The reason why Dr Mörner, formerly a Stockholm professor, is so certain that these claims about sea level rise are 100 per cent wrong is that they are all based on computer model predictions, whereas his findings are based on "going into the field to observe what is actually happening in the real world".

I suppose it might be helpful to have at least one of the twenty two contributors to the UN's Intergovernmental Panel on Climate Change (IPCC) to be a sea level specialist, but then it might kill their entire theory.

Lula: Brazil to Become Major Oil Producer

While the U.S. demonizes the oil industry and have effectively made it impossible to drill, President Lula of Brazil declares that his country is going to become a major oil producer.

It's good to see that not every nation is incapable of seeing the benefits of a strong domestic oil industry.

Steyn: Obama as Community Organizer-in-Chief

Mark Steyn has a good summary on Obama's hopes for the U.S. economy.

Barack Obama, even when he’s not yukking it up on 60 Minutes, barely disguises his indifference to economic matters. He is not an economist, a political philosopher, a geopolitical strategist. He is the president as social engineer, the Community-Organizer-in-Chief. His plan to reduce tax deductions for charitable giving, for example, is not intended primarily to raise revenue, but to advance government as the distributor of largesse and diminish alternative sources of societal organization, such as civic groups. Likewise, his big plans for socialized health care, a green economy, universal college education: They’re about extending the reach of the state.

Steyn also points out that most people who proselytize their view on "higher taxes for all" are only ok if the "all" doesn't include them.

...Bono, the global do-gooder who was last in Washington to play at the Obama inauguration, recently moved much of his business from Ireland to the Netherlands, in order to pay less tax. And good for him. To be sure, he’s always calling on governments to give more money to Africa and whatnot, but it’s heartening to know that, when it comes to his wallet as opposed to yours, Bono — like Secretary Geithner — has no desire to toss any more of his money into the great sucking maw of the government treasury than the absolute minimum he can get away with. I’m with Bono and Tim: They can spend their money more effectively than hack bureaucrats can. We should do as they do, not as they say.

Florida City Cancels "Tea Party" Protest Fearing Too Many

A "tea party" protest of excessive government spending and taxing was canceled by the Cape Coral, Florida government, fearing too many people.

I'm a bit confused - how can the government cancel a protest of the government?

Most Americans Ever Believe Cutting Taxes Works

An overwhelming 63% of voters now believe that tax cuts are the solution to a stronger economy. Frankly, based on the historical evidence, I'm surprised the number isn't even higher. Unfortunately, tax cuts just are not seen as "fair" by this administration and Congress.

Obama Deceives at "Townhall" Meeting: All Supporters

Obama's townhall meeting last week was hailed as a great new tool to reach out to the real concerns of all Americans. Unfortunately, everyone at the meeting were Obama campaign supporters. Perhaps this is why no one with any common sense trusts this administration.

Democrats Criticizing Conservative Justices; No Outrage?

Back in 2006 surrounding the Terri Schiavo case, Republicans who spoke out against what they believed to be a wrong decision by the courts were excoriated by Democrats, the media and even retired Supreme Court moderate Sandra Day O'Connor over politicizing the judiciary branch.

In the past two weeks, we've had Democrat Barney Frank call Justice Antonin Scalia a homophobe and Harry Reid call Chief Justice John Roberts a liar.

Why none of the same outrage?

"Green Jobs" Kill Off Other Jobs Due to High Energy Costs

A university study based on Spain's experience with green energy, including solar and windmills, shows that each new "green job" has the effect of a loss of 2.2 other jobs due to higher energy costs. No wonder why the Administration is factoring in so few new jobs despite spending nearly $1 trillion.

Federal Regulator Screws Up Freddie Mac Business

From Instapundit - it seems that government regulators are further hurting whatever is left of Freddie Mac. And now the company is without a CEO, COO or CFO. Seems like a winning taxpayer investment...

Symbolic "Turn on the Lights" Event Saturday March 28

Edward Norton and Alanis Morrisette are trying to get people to turn off all their lights and electric appliances Saturday night as a symbol of our concern about global warming. They compare this symbolic gesture to the Civil Rights march on Selma.

Instead of their silliness, please join me in my symbolic gesture to oppose the detrimental costs of trying to reverse the mythical effects of manmade global warming by turning on all your lights, tvs and appliancesa at the same time - 8:30 Saturday night. I view this symbolic gesture as similar to Doolittle's raids on Japan during World War II, which helped lead to victory. So turn it up!

National Health Preview

As the WSJ notes, Massachusetts gives us a good example of how a government-mandated health care program, however well-intentioned, ends up - raising costs and cutting services.

In Massachusetts's latest crisis, Governor Deval Patrick and his Democratic colleagues are starting to move down the path that government health plans always follow when spending collides with reality -- i.e., price controls. As costs continue to rise, the inevitable results are coverage restrictions and waiting periods. It was only a matter of time.

...What really whipped along RomneyCare were claims that health care would be less expensive if everyone were covered. But reducing costs while increasing access are irreconcilable issues. Mr. Romney should have known better before signing on to this not-so-grand experiment, especially since the state's "free market" reforms that he boasts about have proven to be irrelevant when not fictional.

Finally, the uninsured population in Massachusetts is far lower than the national average, which means ObamaCare is going to be even worse, with greater deficits and more controls, than in Massachusetts. There are two important lessons here:

1) Opposition to a bad idea (such as government-run healthcare) is always better than "bipartisan compromise" on that bad idea;
2) Apart from the military, government-run anything is a bad idea (see Postal Service, Amtrak, Social Security, Medicare,...).

*Update*
Perhaps this is part of the reason that nearly half of all Mass. residents say "it's time to elect someone else" instead of Deval Patrick. From Red State.

Solar Investments Not Optimal

This is probably why solar panels are not more ubiquitous. I suppose the investment isn't all that bad when we compare it to our expected returns on social security contributions.

When Will Emanuel Return $320K from Freddie Mac?

During Rahm Emanuel's brief tenure on the Board of Directors at Freddie Mac, he received $320K for helping to run the nation into the ground. Since Congress loves ex-post facto compensation clawbacks, why not ask for that $320K back?

EU Condemns Obama's Spending: "Road to Hell"

EU's President Mirek Topolanek of the Czech Republic condemned Obama's spending spree and said that its policies would worsen the global economy.

“The US Treasury secretary talks about permanent action and we, at our spring council, were quite alarmed at that . . . The US is repeating mistakes from the 1930s, such as wide-ranging stimuluses, protectionist tendencies and appeals, the Buy American campaign, and so on,” he told a European parliament session in Strasbourg. “All these steps, their combination and their permanency, are the road to hell.”

So now Obama can add to the growing list of countries that are outraged with his Administration. I thought his election was supposed to bring about great new relations with every country in the world? So far, he's already alienated Canda, UK, France, Germany, Poland, the Czech Republic, Iran, North Korea, Mexico,...

Bye Bye Black Cars?

The Air Resources Board in California is trying to force a mandate to have 20% solar reflectivity in cars in the next decade, which, because of the required chemicals added to paints to achieve such a mandate, would make black cars a thing of the past.

The B.S. Homeless Study

Kevin Chappell of Ebony magazine cited a completely bogus homeless study by a liberal advocacy group in a Q&A session with Obama this week, claiming that 1 of 50 children are living "under bridges and in tents across the country."

Mickey Kaus at Slate said the whole study is a farce and yet not a single member of the media even questioned its accuracy.

AIG Deteriorating Over Personnel Losses

From the WSJ:

Amid the flap over bonuses at American International Group Inc. two of the company's top managers in Paris have resigned. Their moves have left the giant insurer and officials scrambling to replace them to avoid an unlikely but expensive situation in which billions in AIG trading contracts could default.

Defaults, by no means inevitable, could not only hurt AIG but also could force European banks involved in the trades to raise billions in capital to cushion potential losses, according to AIG documents.

So, in addition to mounting personnel losses in the U.S. (the financial products unit lost five key people yesterday), AIG units around the globe are now losing people, putting not only hundreds of billions of dollars of bank capital at risk, but the entire world economy. But hey, U.S. hack politicians are happy they got back a portion of that .001% portion of its government spending spree.

Soros: "I'm Having a Very Good Crisis"

Obama and his Democrat socialist allies aren't the only ones who are taking advantage of the economic crisis. George Soros is "having a very good crisis," having made over $1 billion for his Quantum Fund in 2008. Let's see if he shares Obama's view on taxes and forks over a majority of that profit.

With Geithner Allow TARP Repayment?

Bob Pisani of CNBC says that the speculation around Wall Street is that Geithner will not allow many firms to pay back TARP funds right now. No bonuses until funds are repaid, but we don't want the funds to be repaid right now...

Dear AIG - I quit

Jake DeSantis, an executive VP at AIG, wrote this letter to the CEO Ed Liddy offering his resignation. I expect Liddy will be receiving many more like it as the business units crumble and are sold off for a song.

*Update*
One last thought. Let's assume we the taxpayers really "lost" $165 million in the whole AIG bonus affair. How much money is the government going to lose by TARP recipients prepaying funds because they no longer want the government as a shareholder? Well, the interest income alone to the government is 5%, on which the government is paying between 0% (if they simply just print money, which is what they are doing) and 2% (if you actually associated an interest cost for similar duration bond interest), resulting in net interest income of between 3% and 5%, or $300-500 million for every $10 billion prepaid. And that assumes no value in the warrants it receives. Seems to me this whole AIG affair is costing them lots of money without even looking at the potential value destruction at AIG itself.

AIG Disgrace: Geithner and Cuomo

Not to beat a dead horse, but the WSJ nails it in its examination of the real disgraces of the AIG bonus affair. For all those who think the bonus recipients were the same ones who created the CDS problems, think again.

As AIG chief Ed Liddy explained on the Hill last week, the people receiving retention bonuses were not the same people who launched AIG's unhedged housing bets that brought the company down. Those people were gone. Their pay is already being clawed back.

Those who remained had been asked a year ago to stay and work themselves out of a job. In accepting the terms offered to them, they committed no offense (say, failing to pay taxes)...Had the company submitted to Chapter 11 rather than a government takeover, a bankruptcy judge might well have authorized identical incentives to minimize losses and maximize recovery for legitimate stakeholders.

It's clear that in addition to being a tax cheat and an incompetent secretary, Geithner is an outright liar, having known about the same bonuses since last year (as had Andrew Cuomo).

As far back as October, New York Attorney General Andrew Cuomo had summoned the Treasury-appointed Mr. Liddy to hammer out a deal on AIG's pay practices. Said Mr. Cuomo in a statement afterward: "These actions are not intended to jeopardize the hard-earned compensation of the vast majority of AIG's employees, including retention and severance arrangements, who are essential to rebuilding AIG and the economy of New York."

On March 3, Mr. Geithner himself was quizzed during a congressional hearing in detail about the AIGFP retention plan by Democratic Rep. Joe Crowley -- a week before Mr. Geithner now says he heard of the plan.

If justice existed, Geithner and Cuomo should both be fired. But as the WSJ notes, Cuomo at least served a useful purpose:

Mr. Cuomo is a thug, but at least he reminds us: It can happen here.

Obama's Deficit Reduction

A picture is worth a thousand words. If this is what Obama's idea of deficit reduction looks like, Americans don't want any part of it. From Heritage.

Usually budgets are projected to decrease over time, like President Bush's did in '05, '06, '07. Obama's trend line just continues to increase as his new entitlement programs take hold.

Senate Bill to Allow Tax Exempt Status to Newspapers?

A new bill introduced in the Senate by Ben Cardin and supported by all good Left-wing Democrats would make the newspaper business tax-exempt.

I wonder if they are going to consider giving Rupert Murdoch the same tax-exempt status. I suppose Rupert's businesses don't comply because they are all profitable. Unfortunately for other newspaper companies, they are not unprofitable by design - their business models simply failed because no one wants to read their garbage anymore.

Add AIG Connection to Dodd's List of Troubles

The hits keep coming for Democrat Sen. Chris Dodd, already embroiled in a dubious Irish cottage scandal and the Countrywide discount loan scandal. Now it comes out that his wife Jackie was being paid by AIG just a few years ago. Hmm...Larry Kudlow is looking better and better as CT Senate candidate.

Soros: Way To Prevent Bear Raids

For the first time in a while, I agree with George Soros' editorial in the WSJ related to credit default swaps (CDS). Soros argues that CDS do nothing good for the markets unless a the buyer actually has an underlying bond position that he wishes to hedge.

In all the uproar over AIG, the most important lesson has been ignored. AIG failed because it sold large amounts of credit default swaps (CDS) without properly offsetting or covering their positions. What we must take away from this is that CDS are toxic instruments whose use ought to be strictly regulated: Only those who own the underlying bonds ought to be allowed to buy them. Instituting this rule would tame a destructive force and cut the price of the swaps. It would also save the U.S. Treasury a lot of money by reducing the loss on AIG's outstanding positions without abrogating any contracts.

CDS came into existence as a way of providing insurance on bonds against default. Since they are tradable instruments, they became bear-market warrants for speculating on deteriorating conditions in a company or country. What makes them toxic is that such speculation can be self-validating.

Up until the crash of 2008, the prevailing view -- called the efficient market hypothesis -- was that the prices of financial instruments accurately reflect all the available information (i.e. the underlying reality). But this is not true. Financial markets don't deal with the current reality, but with the future -- a matter of anticipation, not knowledge. Thus, we must understand financial markets through a new paradigm which recognizes that they always provide a biased view of the future, and that the distortion of prices in financial markets may affect the underlying reality that those prices are supposed to reflect.

Congratulations George - doing something constructive for a change.

Conrad: Employees Should Return AIG Bonuses or Be Fired

Kent Conrad joins the chorus of those who says that if he were CEO, he would require the employees to either return their bonuses or be fired.

The only problem with that, of course, is that most of the top employees (those receiving $1 million bonuses) are likely very important to the particular business units they are running and would damage the remaining value of their business unit if they left. Otherwise, they would not have been given retention bonuses in the first place. It doesn't make sense to give 70 top executives $1 million in retention bonuses only to fire them all. As a taxpayer and therefore owner of 80% of AIG, I don't think that's the best use of my money. I'd rather just sell the units that the company can sell and then let the buyer do with the employees as they choose.

Obama to Get Citizens to Sign Petition of Support

This is a bit strange - Obama is going to have his supporters go door to door asking citizens to sign a petition in support of his policies. Although I'd have no problem throwing anyone off my property who requested my signature going door-to-door, I think it's still a bit creepy and intimidating. After all, aren't voters entitled to secret votes? But then again, this is the Chicago way.

Obama to Oversee ALL Executive Pay

Surely enough, the slippery slope just got a lot steeper. Now Obama believes he has a mandate to oversee and regulate executive compensation at ALL banks, whether they receive TARP funds or not, as well as other companies that he chooses.

There was once a word for this...aah yes...communism. Enjoy it.

Perhaps it's time we investigate Congress (claiming MD residency to save on taxes) and the President (Rezko) for all of their fraudulent financial activities.

House to Investigate ACORN?

John Conyers is apparently considering investigating the president's favorite community agitator group, ACORN. Some seem to think that even Conyers and the Dems are beginning to see the light that Americans don't like fraudsters like ACORN.

Consider me a skeptic. I think the forum will be more of an attempt to punish a couple of individuals and then exonerate the rest of the organization, thereby giving them a clean bill of health.

Senate Insanity: Bonus Tax Over 100%!

The Democrat-led Senate is officially insane. Their own version of the bonus tax would not only be expanded to all TARP recipients of over $100 million (vs. the House version of $5 billion), but it would levy an excise tax of 70%, which when combined with regular federal and state taxes, would push the taxable rate over 100%. Time for banks to throw the capital back to the Feds and go into hibernation mode.

CBO: Budget Deficit Blowout for Decade

The CBO does not agree with the rose-colored budget deficit projections of Obama's White House. In fact, the CBO sees $1 trillion+ deficits for the entire next decade.

I don't argue that deficits are a bad thing when they are used for tax cuts that help promote growth. In fact, if they are used for tax cuts, I would always advocate an approximately 3% of GDP deficit, which according to Milton Friedman, was roughly the politically acceptable level. Above that amount becomes a bit risky and below that amount allows for government's propensity to spend. In a perverse way the only way to reign in spending is to deliver tax cuts back to taxpayers up to that politically acceptable deficit level.

Once in a while (such as the mid-90s under Newt Gingrich), Congress will actually decide to balance the budget, which theoretically is a good thing and in the long run may be required to convince countries to hold our debt. Unfortunately, those historical precedents under the Obama-Pelosi regime are long gone and now we will expect to see 10-15%+ deficits over the next few years and perhaps get it back to 5% in a decade (or roughly double the George W. Bush era) if we fortunate.

Pretty scary stuff, which is why the 90% bonus tax is likely here to stay. Today, TARP recipients, tomorrow, everyone else. That has been the goal of Obama's all along, for those who have been paying attention. Full speed ahead with government-run universal healthcare, the carbon tax, card check,...

JP Morgan Scolded for Outsourcing Jobs

Now Congress wants to dictate the operations to TARP recipients. No more increasing profitability through outsourcing:

In a letter addressed to JP Morgan Chase CEO Jamie Dimon, the Congress members asked: “How should these American workers, many of them your consumers, be expected to have hope for a better future when the very companies they contributed to through TARP outsource the jobs they desperately need?”

Congress as Chief Operating Officer. Wonderful.

Obama Insults Special Olympics on Leno

Even though Obama is destroying the wealth and economy of the U.S., he does provide a good bumbling laugh on a nearly daily basis. Last night on Leno, Obama made a joke about the special olympics. The teleprompter must have been busy last night.

*Update*
It's official - Obama's telemprompter denies responsibility for the snafu.

Rating Agencies Are the Winners Here

The credit ratings agencies, Moody's, S&P, Fitch and others, helped give an assist to the financial crisis with overly rosy ratings on mortgage-backed securities. They then helped exacerbate the problem by going overly negative on financial companies whose stock prices were being pummeled by short sellers, thereby creating self-fulfilling prophetic failures - from Lehman to AIG and others. Yes, they no longer relied solely on fundamentals, but would also base their ratings on whether the stock price was high enough in the possible event that the company needed to raise additional capital, thus changing the rules of the game. (I'm sure all the shorting hedge funds are grateful.)

Now, as the WSJ says, the rating agencies are going to see a huge windfall from all the requirements for new ratings services. I smell a 90% tax coming...

Where's the Demand for TALF?

The Term Asset-backed Securities Loan Facility (TALF) sounds like a great way to get credit flowing again in the consumer finance industry. Through the program, an investment fund can borrow cheaply to securitize AAA rated credit card loans, student loans, auto loans, or even small business loans. The problem is that demand has been minimal so far, without a single request for small business or student loans.

[U.S. Economist Michael] Feroli added that concerns remain about the future of the TALF program. For example, he wrote that potential issuers and investors have expressed worry "that policymakers will eventually slap restrictions, taxes, or fines on companies which benefit from TALF."

Understandable. Yet another byproduct of the Fed's ridiculous grandstanding is that not only do banks want nothing to do with TARP anymore, but investors are now very reluctant to utilize other programs such as TALF, designed to improve the credit markets again.

One final point about that idiotic 90% law that passed yesterday. It seems hard to believe, but even a secretary who gets a $5K bonus for her work will get that bonus effectively stolen by the government if her family income is $250K. Nice. Idiocy has just found a best friend in the Democrat-run Congress.

About Obama's 25 DVD Gift...

Not only was Obama's gift of 25 DVDs a joke and an insult among the British press, but one other thing which I didn't previously think about - the DVDs didn't even work because they were not compatible with UK DVD players. Amateur hour.

House Passes 90% Tax on Bonuses

As a wise man once said about being married, "each day is better than the next." That's a bit how I feel about the collective common sense in Washington these days.

With the passing of the 90% tax on bonuses to employees of companies receiving at least $5 billion in TARP funds, Congress has just made it an absolute priority to return the capital to the government, which defeats the entire purpose of the program. This will inevitably make many taxpayers feel good - no more "bailout" funds at banks. Of course, thus far the federal government is earning 5% over its cost of funds, plus warrants, which effectively gives it an approximately 8-10% rate of return on its $800 billion investment. That's an extra $60-80 billion in revenue for the government to spend.

Now, the only banks who will keep the funds are those that absolutely need it (i.e. Citi), which means the likelihood of losing money (while still minimal) just increased.

Oh, and if that means that banks will slow down lending to preserve any loss of the additional TARP capital cushion, then it will do so. And guess who loses? Not the banks...

Shell Kisses Solar and Wind Investments Goodbye

Royal Dutch Shell announced that it will no longer be making investments in wind and solar energy because they don't view the investment as paying off anytime soon.

It sounds nice for a company to say they are investing in alternative energy, but companies ultimately need to make smart investments - and wind and solar don't meet the requirements.

The 90% Bracket a Test Trial?

Powerline brings up a good point that I have also been thinking about: this 90% tax rate could very well be the trial balloon to see how the public reacts to a shockingly high tax rate on highly compensated executives. It also brings up the question - if the federal rate is 90%, then after you add in the deduction phaseouts, the state rate and FICA/Medicare, wouldn't that make the total rate about 110%?

It seems very logical to me that if the public is all for the high rates in the case of AIG, then they should also be for the high rates for bonuses of all other TARP recipients as well. And then taking it one step further, why not on large bonuses in general. (Ok, the government will give you a break with a rate of 60% instead of 90% - and that's just the federal rate.) Don't be surprised when it happens...

Duke's Coach K to Obama: Focus on Economy, Not Hoops

Coach K sharply rebuked Obama yesterday when told that he was not in the president's Final Four:

"Somebody said that we're not in President Obama's Final Four, and as much as I respect what he's doing, really, the economy is something that he should focus on, probably more than the brackets," Krzyzewski told a reporter from the Associated Press on Wednesday.

I have to disagree with Coach K on this one - we want Obama as far from the economy as possible. He should be filling out thousands of brackets for every sport imaginable.

WaPo: AIG Focus May Backlash

Even the Washington Post writes that the negative attention the administration is focusing on AIG will likely have the negative consequence of deterring private investors from taking positions in troubled banks.

I'd even go further than that. I think that all but the most troubled banks are going to attempt to repay the TARP funds, even if it means curtailing loan originations in order to preserve capital. The tight credit will only help prolong the recession. But as I've stated, if it distracts the public from discussing the $5 trillion waste that the government is in the process of passing into law, then the distraction serves the administration's purpose.

Sorry, Michelle - You're No Laura Bush

Michelle Obama went to Fort Bragg and said that "like most Americans, I was pretty oblivious to the life of military families." She can certainly speak for herself, but she doesn't speak for most Americans. From Gateway Pundit.

Her solution? Maybe invite military families to the White House:

"here they are sacrificing so much for the country and many of them probably have never been invited to the White House."

I know why Michelle thinks America is a "downright mean country" and why she was "never proud of her country" until it nominated her husband, but she obviously never paid an ounce of attention to what the previous Administration has done for military families. This isn't exactly a novel idea...

"Guilty as Hell, Free as a Bird"

The American Thinker says that the case into the bombing of San Francisco's Park Police Station in 1970 that wounded several policemen and killed one has been reopened. Because there is no statute of limitations, Obama buddy Bill Ayers could be in trouble.

With Obama in the White House, I wouldn't count on this case moving forward.

Fraudulent ACORN To Help With Census

Our favorite fraudulent community agitation group, ACORN, is going to be helping out with the 2010 Census. Ok, so the census is moved from the Commerce Dept. to directly under the White House Chief of Staff - and now this - should be a trustworthy census...

Probability of Losing Full $173B AIG Loan Increases

I hope everyone on Capitol Hill and the White House are feeling good about themselves for trying so hard to save $165 million because the probability is increasing dramatically that the AIG businesses will soon be worth very much less if they can be sold at all - and thus would kill any chance to repay the $173 billion that the government already fronted. From Riehl World View:

Obama and his team knew about the AIG bonus issue for quite some time. They had already concluded there was nothing to be done without causing greater risk. Now the very people AIG claims it needs to sort out the mess and prevent further economic damage are resigning, or just not showing up due to death threats and whatever else.

...company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products' complex trades and who are trying to dismantle the division before it further endangers the world's economy. "It's going to blow up," said a senior Financial Products manager, who spoke on condition of anonymity because he was not authorized to speak for the company. "I have a horrible, horrible, horrible feeling that this is going to end badly."

But hey, the government just "saved" us $165 million. Ok.

*Update*
It looks like AIG just trumped the politicians by agreeing to pay back the $165 million. Ha - now they owe the government $173.165 billion. Checkmate. Now we can worry about the other $5+ trillion in spending that Obama is requesting. Let's see if Congress has the same outrage...

Dodd Made the AIG Bonuses Possible

Democrat friend of Countrywide Chris Dodd is shocked - shocked - about the AIG bonuses even though they have been announced over a year ago. Oh, and it was Chris Dodd's own amendment in the "stimulus" bill that allowed for these types of bonus payments. But just like his sweetheart mortgage deal, Dodd hopes the public forgets about that minor detail.

*Update*
There have been multiple death threats towards AIG employees today. Chuck Schumer also just announced that employees better return the money or else the government is going to go after them all personally. What the hell kind of Stalinist regime are we now living in?

Bernanke Shines; Obama Still Flailing Miserably

Ben Bernanke drew universal praise for his appearance on 60 Minutes on Sunday. It's good to see that there's at least one person who has a clue on Capitol Hill.

Meanwhile, Obama is attempting to destroy any attempt for the market to rebuild confidence in the financial system by declaring that financial companies (AIG) are being "reckless" and therefore are going to be subject to new, tougher, ad hoc restrictions on TARP funds. Just what the markets need - more Obama cluelessness and knee-jerk reactions.

AIG Bonuses - An Outrage or Diversion?

So AIG has decided to pay its employees retention bonuses of a total of $165 million to stay on through the dissolution of the company. Everybody in Congress is feigning anger about "wasting taxpayer dollars." I have no idea if the retention bonuses were necessary to retain employees, but I suspect they were.

AIG has over 100,000 employees, so the average employee gets an additional $1,500 to keep them on through the winding up and sale of the businesses, which could take months to years. The government has already pumped over 1,000 times that amount into AIG to save the company from defaulting on its counterparty obligations and help give it additional time to seek buyers for its businesses. The worst thing that could happen at this point in time is for many of the key employees to walk away, in which case the taxpayers will lose a heck of a lot more than $165 million. The best thing that could happen is that AIG can retain employees, sell businesses in an orderly fashion, and then repay the money (or a large portion of it) that was loaned to it by the government.

I have no interest in seeing AIG employees receive more compensation than is required, but frankly as a taxpayer, I would always rather see a company's management team run its business than the government. If the government is really interested in saving money, it should probably go back to the $800 billion spending bill that was just passed. Even in a worst case scenario, the $165 million retention bonuses probably have at least as much of an effect as the money spent in the "stimulus" bill by putting dollars into consumers' pockets. Isn't that what the government wanted in the first place?

*Update*
The WSJ says that the real outrage is the government's cover-up of who actually received the counterparty money - European banks received $20 billion. Don't we already pay enough for Europe's defense and prescription drug bill?

Wells Fargo Chairman: Treasury Plan "Asinine"

Inarguably one of the top banking minds in the United States, Wells Fargo Chairman Richard Kovacevich railed against the TARP rules and says that the administration's "stress test" plans for banks is "asinine."

“Is this America -- when you do what your government asks you to do and then retroactively you also have additional conditions?” Kovacevich said. “If we were not forced to take the TARP money, we would have been able to raise private capital at that time” and not needed to cut the dividend to preserve cash, he said.

Further, he said that the administration nearly took down the entire industry with its idiotic and incompetent stress-test plan:

“We do stress tests all the time on all of our portfolios,” Kovacevich said. “We share those stress tests with our regulators. It is absolutely asinine that somebody would announce we’re going to do stress tests for banks and we’ll give you the answer in 12 weeks.”

He's obviously correct - if regulators already reviewing banks aren't trustworthy, why have them at all? Further, who is more knowledgeable about banking in this country - the Chairman of one of the most successful banks in the country and a key holding of Warren Buffett's - or a President who never held a private sector job in his life?

FDIC Chair: Bank Assets Undervalued

FDIC Chair Sheila Bair said in an interview with NPR that she believes bank assets are almost certainly undervalued.

[NPR's] Kai Ryssdal: There is a supposition here, isn't there, that the toxic assets will eventually become non-toxic (for want of a better word) at some point, right?

BAIR: Well, I think they will certainly be worth more than the current valuations. I think that is the assumption. And I think that's true. I mean, at the FDIC we sell troubled bank assets all the time. You know, when banks have to be closed, we take over as a receiver, so we're pretty familiar with the market right now. So we think that that is absolutely true that the assets are worth more than the current market conditions assign to them. And so that, yes, over time there will be significant profits from these.

Hmm. So I guess they don't need more capital after all, right?

Obama Approval Still Plummeting

Poor Obama. According to Rasmussen, the strongly approve-strongly disapprove spread has gone from +30 at inauguration to +4.

Frank: Federal Government "Rewarding Incompetence"

Barney Frank finally says something that I agree with - the federal government is "rewarding incompetence."

Of course, Barney Frank was referring to the AIG bonus retention payments, which, because AIG is supported with TARP funds, is essentially being funded by the Feds.

Sorry Barney, but rewarding incompetence is something that the government knows all too well.

Coming Soon: Raising Taxes to Bail Out Public Retirees

The WSJ explains that the pensions for public employees have liabilities well in excess of their assets, due to the recent market crash. In business terms - they're bankrupt. Unfortunately for taxpayers, it means that all their taxes will soon be increasing in order to fund the public employees' generous retirements.

In New York, Governor Paterson and Mayor Bloomberg have proposed the radical idea of forcing a minimum retirement age of 50 for employees. Of course, even at that age, the average person will be supported by his fellow taxpayers for a period about 50% longer than he was serving the public. Forget about all the federal tax increases coming. If the public pension funds aren't changed in a major way, the 60% of Americans who pay taxes are going to see their rates increase even more dramatically to support the ever-growing state beauracracies.

Geithner In Over His Head?

Yes, I know the question seems rhetorical, but Geithner gets poor reviews with every public appearance. Says banking analyst Tom Brown:

I was leery of the new Treasury Secretary before I read the Charlie Rose interview. Now I’m downright worried. Put aside whether Geithner’s Treasury Department can come up with the right solutions; Geithner doesn’t even seem to understand the nature of the problem. For an administration trying to deal with as deep an economic crisis as this one—and trying to a whole lot of other things as well--that’s not an encouraging sign.

Read his full critique here.

Obama: It's Really Not that Bad After All

According to our trusted Obama, the economy that last week was a "crisis of epic proportions" is really not that bad after all.

Hmm. He needed a catastrophe to try to pass the spending bills but now he needs the economy to be "not so bad after all" in order to nationalize health care and pass the $1 trillion cap and trade tax.

It's a shocker that economists and the markets don't trust this guy.

Maxine Waters, Barney Frank and OneUnited Bank

It looks like the Democrats love bailouts - for certain banks of course. From the Corner:

Representative Maxine Waters, Democrat of California, requested the September meeting on behalf of executives at OneUnited, one of the nation’s largest black-owned banks. Ms. Water’s husband, Sidney Williams, had served on the bank’s board of directors until early last year and has owned at least $250,000 in stock in the institution. Treasury officials said the session with nearly a dozen senior banking regulators had been intended to allow minority-owned banks and their trade association to discuss the losses they had incurred from the federal takeover of Fannie Mae and Freddie Mac. But Kevin Cohee, OneUnited’s chief executive, instead seized the opportunity to plead for special assistance for his bank, federal officials said.

The congresswoman, a member of the House Financial Services Committee, did not disclose her ties to OneUnited to Treasury officials, who said they learned of them only later.

Note that OneUnited is the same bank whose relationship with Barney Frank raised some eyebrows back in January. After receiving $12 million in bailout funds with Frank's help, the FDIC issued a cease-and-desist order against the bank, in part related to the fact that the bank was paying for the CEO's beach house and Porsche.

Response to Rush Billboard

This would be hilarious.

UN Chief: U.S. Is a "Deadbeat" Donor

The head of the U.N. believes that the U.S. is a deadbeat donor.

Hey, I have no problems walking away from the body, keeping our 22% of their budget and kicking their butts into the East River. Can someone name what projects they implemented that have been successful?

Reagan, Buckley and Limbaugh

Jay Nordlinger does a fine job of pointing out the silliness of a recent Newsweek article that claims that Rush Limbaugh is damaging to conservatives and the GOP. (And frankly, you can replace "Limbaugh" with whomever the media believes is the most visible conservative of the day. After Rush passes away, the Left will inevitably find their new demon and say that he isn't as likeble, friendly, generous or comedic as Rush Limbaugh.)

They say, “The party of Buckley and Reagan is now bereft and dominated by the politics of Limbaugh.” Oh, boo hoo. And let me tell you something about Buckley and Reagan — taking the latter first.

The mainstream media, of which Newsweek is a good representative, hated Reagan. Hated him. Never had anything good to say about him, when he was alive and working. In fact, they said many of the same things about Reagan that they now say about Rush: that he was a boob, a conman, a mountebank, a know-nothing, etc.

And then Reagan got old and sick and everybody went “Awww.” I liked it better when they were hating him — it was more honest, in a way.

And I love what Newsweek says about Reagan versus “the politics of Limbaugh.” Rush’s politics are the politics of Reagan, in their essence. And Newsweek has never shown much friendliness toward these politics, to say the least.

Now, Bill Buckley: The Left hated him, too, for the most part. I myself grew up around world-class Buckley-haters. They couldn’t speak his name without spitting. It was not easy to buy a National Review in an Ann Arbor bookstore, let me tell you — I mean, for the grief you got from the cashier. (I wrote a piece about this once.) But, in Bill’s last years, many people found him cuddly. And they now try to use him as a club against us — against NR, the people he entrusted to carry on his work.

And let me say once more what I’ve said before: Bill Buckley loved Rush Limbaugh.

Companies to Relocate to Switzerland?

The idea of U.S. or Bermuda-based companies moving to Switzerland is picking up steam. Just as economists always say, if you tax something more, you get less of it. The same is true of corporations, who pay a 35% rate in the U.S. while a 9.5%-16% rate in Switzerland.

Atlanta City Hall Artwork: Isn't it True?

I think the latest artwork on Atlanta's City Hall building might be in poor taste, but to be honest, it's just speaking the truth, so I'm not offended by it. Does anyone really disagree with the message?

Clarence Thomas, Ultimate Non-Partisan

Once again, Supreme Court justice Clarence Thomas shows that his consistent judicial philosophy is more important to him than ideology. In a 5-4 decision last week against drug company Wyeth, Thomas was the swing vote that allowed citizens the right to sue drug makers, despite the fact that it is FDA regulators who approve or disapprove drugs.

While the ruling is going to increase litigation and court costs for drug makers, which will then be passed on to consumers (thus further increasing health care costs), Thomas stuck to his federalist principles, saying that states can regulate consumer protection laws themselves.

Once again, it's a "conservative" justice who swings to the side of a popular liberal issue (tort) to defend his judicial philosophy rather than his personal views. When does a liberal justice ever go against the liberal policy line?

Taliban Chief Once a Gitmo Prisoner

Hmm. One of the Taliban operations chiefs was once a prisoner at Gitmo. Now he's killing U.S. soldiers in Afghanistan.

More Idiotic Restrictions for TARP Recipients

The federal TARP "bailout," which has been helpful in destroying 85% of the market value of banks, is now coming up with new insane rules for those who accepted TARP money.

U.S. financial institutions that are getting government bailout funds have been told to put off evictions and modify mortgages for distressed homeowners. They must let shareholders vote on executive pay packages. They must lower dividends, cancel employee training and morale-boosting exercises, and withdraw job offers to foreign citizens.

Essentially, banks are now told how to run every key aspect of their business, from employee training to managing (or in this case, mismanaging) defaults. Would any bank in the country (except for those that would have failed, such as Citi) have accepted TARP funds if they had known these rules up front? Of course not. Would Wells Fargo have agreed to the Fed's request to take on Wachovia with the assistance of TARP funds? No way. Yes, while some smaller banks might be able to pay the funds back, there is no way to undo the mergers that allowed very healthy banks such as PNC and Wells Fargo to undo their mergers with failing banks.

And now that the banks will have all of the efficiencies and incentives of running their organizations like the federal government, I think it's safe to say that the return to normal profits in the banking world just got a lot longer.

Obama Just a Poor Judge of People

Glenn Reynolds points out in instapundit.com, that Obama has had a number of bad appointments. This is an understatement. He points out:

SO HOW MANY BAD APPOINTMENTS HAS OBAMA HAD? There’s Chas Freeman, Sanjay Gupta, Annette Nazareth, Tom Daschle, Bill Richardson, Nancy Killefer — who am I leaving out? And there are still problems with Adolfo Carrion. But at least Ron Kirk made it through despite his tax problems.
UPDATE: Oh, yeah. Judd Gregg. And the Zinni debacle.

I think the real problem is that Obama himself is just an extremely poor judge of people. Look back at the type of people he has chosen to be friends with and associated with. Let's not even go into Bill Ayers and Jeremiah Wright. Even most of his more mainstream associates have had problems.

If only people knew that this was the type of change he'd be bringing. One thing he has accomplished in all this is that the media is now yawning about his ridiculous appointments. It's like - Oh - another one? So many bad ones - people have come to expect this from Obama.

Frank: Uptick Rule Coming Back

I will give credit where credit is due. Barney Frank says that the uptick rule, which only allows short-selling of a stock after an uptick, or higher stock price than the previous trade, will be re-imposed within a month. Frank also said that the mark-to-market accounting rules need to be improved. Both of these items are long overdue and while they won't cure all the market's ills, it is definitely good news and at least symbolically important.

The shorts won't be happy, but too bad. It's the first positive thing Barney Frank has done in this mess, so for that, I applaud him.

The War on GAAP

Banking analyst Gary Townsend has a good article on the dangers of "mark-to-market" accounting, which frankly, is at odds with GAAP rules that have stood the test of time. Many accountants still stand by "mark-to-market" for theoretical reasons, but it's hard to argue that the rules add transparency in an unstable market environment.

MTM rules are literally destroying the value of many solid banks - unless you believe that a bank is only worth what the assets can garner in a liquidation scenario.

Steele and Obama: Two Bumbling Starts

The American Spectator has a good article on Michael Steele, who it claims, is having a worse start than even Obama.

I generally like Michael Steele, but he's not an intellectual heavyweight, is not very good at communicating conservative ideas, and in fact, is not a conservative at all. He's more of a McCain/Schwarzenegger clone, which for conservatives, is downright scary. If there's one lesson to be learned from November's elections, it's that Republicans will not win if they're running as Democrat-lites.

Dodd: No Fine Restaurants for Bankers

Fortune magazine points out that bonuses are just one part of what Chris Dodd and Barney Frank are trying to regulate for banks. They are also trying to regulate which restaurants are deemed acceptable and which are deemed excessive.

Instead of using the Zagat guide, TARP recipients may be expected to work from a list of restaurants "identified by the Secretary" of the Treasury, since by law he must now specify which entertainment expenditures are "excessive." Thus, a Washington civil servant could end up judging whether a Manhattan banker can take good customers to dinner at Per Se, or whether TGIF might be elegant enough to close a deal. Your tax dollars at work.

Nothing like an efficient nanny state.

Buffett Slams Obama

There are plenty of things about Buffett that I admire, and plenty that I disagree with. One thing which I have disagreed with was his staunch support of Barack Obama. It sounds like Buffett is beginning to have second thoughts about this as well. Here's what the sage of Omaha said on CNBC:

you can't expect people to unite behind you if you're trying to jam a whole bunch of things down their throat. So I would--I would absolutely say for the--for the interim, till we get this one solved, I would not be pushing a lot of things that are--you know are contentious, and I also--I also would do no finger-pointing whatsoever. I would--you know, I would not say, you know, `George'--`the previous administration got us into this.' Forget it. I mean, you know, the Navy made a mistake at Pearl Harbor and had too many ships there. But the idea that we'd spend our time after that, you know, pointing fingers at the Navy, we needed the Navy. So I would--I would--I would--no finger-pointing, no vengeance, none of that stuff. Just look forward.

I don't think anybody on December 7th would have said a `war is a terrible thing to waste, and therefore we're going to try and ram through a whole bunch of things and--but we expect to--expect the other party to unite behind us on the--on the big problem.' It's just a mistake, I think.

Will Obama choose to listen to any of his well-publicized advisors? Or will he continue to play the "umm.. I inherited this, so don't blame me" game and continue to try to ram through his radical agenda? Stay tuned.

Obama as the Manchurian Candidate

Kevin Hassett of the American Enterprise Institute compares Obama to the Manchurian candidate.

He is right. Since the election, I think even Al Qaeda would be hard-pressed to come up with a move devastating way to destroy the United States economy.

State Dept Official: No Special Relationship with Britain

From the Telegraph:

The real views of many in Obama administration were laid bare by a State Department official involved in planning the Brown visit, who reacted with fury when questioned by The Sunday Telegraph about why the event was so low-key.

The official dismissed any notion of the special relationship, saying: "There's nothing special about Britain. You're just the same as the other 190 countries in the world. You shouldn't expect special treatment."

Repairing relationships...sure.

Obama: I'm Not a Socialist. Bush is!

Obama still strong on the blame game front. I predict this continues officially until January 20th 2012, and unofficially until the end of Obama's life. Amazing that he blames Bush for the prescription drug plan but who does he blame for his $2 trillion healthcare super-plan?

One thing though: He doesn't like being called a socialist very much, does he?

Not All Media Are Tanking

Just about every media outlet in this country, from broadcasters to newspapers, are hurting badly. But there is an exception - Rush Limbaugh. According to Talkers magazine, Rush's audience has grown from 14 million to 25 million and he booked 80% of last year's revenue by the end of January. Further, he says he will pass 2008's total revenue by the end of Q1.

More from Red State.

CT Democrats Want to Change Structure of Catholic Church

The Democrat-controlled state legislature in Connecticut wants to change the way the Catholic Church is structured. Hmm...seems that this is in direct violation of that First Amendment of ours, but then again, it's just a Constitution. From Hot Air.

How about we change the religions altogether? Let's force Hindus to eat beef and Jews to eat pork. Heck, let's get Muslims to stop committing suicide attacks. Ok, maybe I'm getting a bit unrealistic.

Gun Manufacturers Doing Well

Yes, the economy and the stock markets are tanking over Obama's policies, but at least gun manufacturers are doing well. Sales are skyrocketing, likely because people believe it might be their last chance to buy one for a while.

Gift Gaffes

As is tradition during a first diplomatic meeting, UK's PM Gordon Brown gave to Obama three symbolic gifts from the HMS Resolute. Obama in return gave to Gordon Brown 25 DVDs - what a guy. The highly embarrassing and (to the UK) insulting trip was excused by the Obama team; they say that he didn't try to be insulting, he's just in over his head. That's a relief.

The next gaffe involving Hillary Clinton was a "reset button" given to the Russians as a gag gift. Unfortunately, the only gag was on the U.S.

Obama's Approval Ratings Plummet Further

In just 6 weeks, Obama's strong approval-strong disapproval ratings have fallen from +30 to +8. From Rasmussen. Pretty soon the media won't be able to put a positive spin on this trend.

Australian PM: Geithner Screwed Up Asia in 97-98 Crisis

Tim Geithner played the key role in his position at the IMF during the Asian crisis of 1997-98. Paul Keating, then Australia's Prime Minister, recently said that Geithner's "solution" to the crisis was dead wrong and devastated many Asian economies, in particular Indonesia. From the Syndney Morning Herald courtesy of The American Thinker:

"Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis."

In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription...

But Geithner, through his influence on the IMF, imposed the same cure the IMF had imposed on Latin America and Mexico. It was the wrong cure. Indeed, it only aggravated the problem.

Keating continued: "Soeharto's government delivered 21 years of 7 per cent compound growth. It takes a gigantic fool to mess that up. But the IMF messed it up. The end result was the biggest fall in GDP in the 20th century.

I travelled to Indonesia in 1998 and saw firsthand the devastating depression the country endured. Restaurants and hotels completely empty, huge unemployment and a near-worthless currency. And now we are supposed to trust him and Obama with the U.S. economy? Really?

Luskin: Obama Stock Market Worse than Depression

Count great economist Donald Luskin among those who now believe that Obama's stock market crash is worse than that of the Depression. He took a bad situation and made it catastrophic.

Stocks are off 28.4% since his election [about 33% now], 15.2% since his inauguration, and 17.2% since his so-called “stimulus” bill was enacted. To say the very least, whatever he's doing, it ain't working.

I didn't count on the extent to which he'd use the present economic mess as an excuse to push his agenda of more government regulation, greater involvement of government in the economy, and higher taxes...Please forgive what may seem like an outrageous comparison, but this is exactly how Adolph Hitler came to power in 1933 -- by exploiting public panic in the aftermath to the Reichstag fire.

And I also didn't count on how downright incompetent Timothy Geithner would be as Treasury secretary...The reason stocks can't stabilize here is that the new administration is promoting an agenda of inherent instability.

So whatever Obama says about "profit and earning" ratios, investors literally aren't buying it. Gateway Pundit wonders why Luskin is so surprised that Obama has acted in this way. After all, to take Luskin's analogy one step further, just as Hitler laid out his plans in Mein Kampf, so too did Obama with his Audacity of Hope and voting history in the Illinois and U.S. Senate. Expecting Obama to change his big-government ideology and socialist ideas simply because he was elected President is unrealistic. (True, that's not how he campaigned, but it should have been obvious even with a sycophantic media.)

Even Whoopi Goldberg "Mad as Hell" About Higher Taxes

Whoopi Goldberg, in a conversation with Elizabeth Hasslebeck on The View, said this morning that she is fed up with the higher taxes that are hitting her:

GOLDBERG: You remember that movie Network? If you are just fed up, at some point, just lean out your window (laughter) and scream, "I'm mad as hell," 'cause that's what's happening to me. I'm losing my mind, because I don't understand why -- like they -- one of the things that I saw recently, they have this whole thing about taxing "the wealthy." Okay. Now, I don't mind that. I don't mind paying a little more tax 'cause I make a good living.

HASSELBECK: Sure.

GOLDBERG: But I don't want to get it coming and going. I don't want to get the federal raised and then the state raised and then the phone tax raised and then the television tax raised --

HASSELBECK: City tax raised!

GOLDBERG: -- and then the city tax. Back off me!

Just wait, Whoopi - you ain' t seen nothin' yet.

Chavez to Obama: Follow Us to Socialism

Hugo Chavez has some words of advice for Obama: lead your country to socialism.

Sorry, but he's one step ahead of you.

The Genesis of the Crisis, per the NY Times

Just in case anyone questions who the real cause of this mortgage crisis is...from the NY Times:
(Note the date of the article.)

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

The government got us into this mess and now the government is going to prolong and worsen the mess.

Krauthammer: Obama "Dishonest to the Core"

Charles Krauthammer lays out the fraudulent and dishonest President very well.

Forget the pork. Forget the waste. Forget the 8,570 earmarks in a bill supported by a president who poses as the scourge of earmarks. Forget the "$2 trillion dollars in savings" that "we have already identified," $1.6 trillion of which President Obama's budget director later admits is the "savings" of not continuing the surge in Iraq until 2019 -- 11 years after George Bush ended it, and eight years after even Bush would have had us out of Iraq completely.

Forget all of this. This is run-of-the-mill budget trickery...But few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical sleight of hand so smoothly offered that few noticed.

The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions -- the sense of crisis bordering on fear-itself panic -- for enacting his "Big Bang" agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core.

TCF Leaves the Club: To Repay TARP Funds

TCF Financial CEO explained to Greta van Susteren why the company is repaying its TARP funds. He says "we don't need it; we don't need those rules and regulations." He also says that the government jawboning has created a stigma around TARP recipients as if they are greedy criminals stealing from taxpayers. He wants nothing to do with that. TCF joins other banks, most recently US Bancorp and Northern Trust, to repay the funds.

Again, talk about unintended consequences. Now there is going to be a stampede to pay the TARP funds back, lest there be a stigma associated with the banks who do not do so. Maybe it makes Congressmen feel good, maybe it makes taxpayers feel good because their money isn't "at risk", but the banks that are going to pay it back were not at risk anyway and would have otherwise generated a very good risk-adjusted return for the government! And now healthy banks are paying back the money which otherwise could have been used (well, until Congress stupidly changed the rules) to take over weaker banks that might end up costing taxpayers big bucks.

TARP was one of the few reasonably good ideas from Congress until they screwed it all up with their populist rhetoric and changing of the rules after the money was already distributed. It's a damn shame.

"Obama Bear Market Punishes Investors"

The Bloomberg headline says it all.

Geithner Nominees Withdraw Names

Two nominees of Tim Geithner withdrew their names from consideration.

Annette Nazareth, who was expected to be tapped as deputy secretary, has taken her name out of the running, these people said.

In addition, Mr. Geithner's pick for undersecretary for international affairs, Caroline Atkinson, has also withdrawn.

The withdrawals are the latest stumbling block for Mr. Geithner, who has struggled to build a staff. Aside from Mr. Geithner, the department doesn't have a single nominated official in place.

This guy has no clue what he is doing. It's no wonder the markets are scared beyond belief.

Rep Frank: Let's Prosecute Culprits of Financial Meltdown

Rep. Barney Frank (D-MA) says that he will be looking to prosecute those responsible for the financial meltdown. Hopefully someone will give him and his colleagues directions to the nearest courthouse to turn themselves in.

US Bancorp, Northern Trust Say to Feds: "Take it Back"

US Bancorp and Northern trust give the proverbial F*** you to the Feds and give the TARP money back. I don't blame them.

Sadly, these are two of the stronger banks in the country that could have actually used the capital to either buy a weaker bank or put out more loans.

The Silver Lining...

Yes, the S&P 500 is down 32% since Obama was elected and 57% from its high, but there is good news. Only 1,416 miserable days left until we get a leader who doesn't think the U.S. is an unfair and unjust country.

How to Make Money, the Greg Mankiw Way

Greg Mankiw is highly skeptical of Obama's growth projections (as clearly is the entire market). Paul Krugman seems to believe otherwise, so Mankiw has challenged him to bet some of his own money on it.

I'd love a piece of that action; I think it's the only way one can make money these days.

Cramer Fighting Back; Admits He's Democrat & Obama Guy

Jim Cramer responds to the recent White House barbs. Interestingly, he admits he's a Democrat and voted for Obama, although that was the campaign Obama, not the real Obama. But he then rips him and his policies that are literally destroying all the wealth in this country. Here is just a snippet:

If we only want to help those who have no wealth to destroy, we are not helping the majority of Americans; we are not helping the broader population...

..Obama has undeniably made things worse by creating an atmosphere of fear and panic rather than an atmosphere of calm and hope.

We had a banking crisis coming into this regime, but now every area is in crisis. Each day is worse than the previous one for this miserable economy and while Obama's champions cite the stimulus plan, it's really just a hodgepodge of old Democratic pork and will not create nearly as many manufacturing or service jobs as we hoped. China's stimulus plan is the model; ours is the parody.