More Financial Crisis

The more I think about it, the more ticked off I get!

The New York Times reports:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.1

And John McCain addressed the Senate on May 25, 2006:

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.2

1 The New York Times (accessed Oct 26, 2008)
2 S. 190–109th Congress (2005): Federal Housing Enterprise Regulatory Reform Act of 2005, (database of federal legislation) (accessed Oct 27, 2008)
3 S. 190–109th Congress (2005): Federal Housing Enterprise Regulatory Reform Act of 2005, (database of federal legislation) (accessed Oct 26, 2008)

Stories about my Dad

My Dad was among the oldest of 12 children. After getting through sixth grade, he had to get a job to help support the family.

He was pretty good at laying bricks, so someone came to him looking to build a chimney. Now, Dad knew that this guy had a habit of hiring someone to do a job and skipping out when it came time to pay the bill… but he needed the money so he built the chimney anyway.

As he expected, the guy wouldn’t pay up. So my Dad waited for the weather to turn cold. Once again, as he expected, along comes the payment-dodger complaining that the chimney won’t draw. Dad says “if you pay the bill, it’ll start working”. Finally the guy pays up.

Dad goes over to the guy’s house, climbs up on the roof and drops a big rock down the chimney. Turns out Dad had inserted a sheet of glass about one-third of the way down the chimney.

Just goes to show that street smarts are just as important as book smarts.

Way to go, Dad. I miss you.

Orson Scott Card gets an A+…

… for telling the truth.

Would the Last Honest Reporter Please Turn On the Lights? 2 presents a clear and concise account of the events leading up to the 700 billion dollar bailout.

Will it have any effect? Doubtful. Everyone’s so caught up in blaming George Bush for even breathing, there’s no time left for seeking out the truth about anything.


Why I hate political campaigns

So Tom had to run out to the local grocery this afternoon. Right where we exit off Route 9, there have been a bunch of signs for a specific candidate. Today, someone from the opponent’s campaign staff was putting up new signs and strategically placing them so the original signs couldn’t be seen.

My take is that if you have to hide the opposing candidate, you probably don’t have much of a platform to begin with.

The Hard Times Chronicle

If you haven’t yet done so, you should read Joanna Ossinger’s piece titled “Does the Downturn Make You Sick? An Ode to My Dad”1. It was so familiar, I was wondering if I had written it myself.

My Dad was a pipefitter at Norfolk Shipbuilding & Drydock, never made more than $19,000 a year and built the house I grew up in. It took him three years, working as long as six or seven hours every weekday evening after he was done with his day job and all day Saturday. My Mom was a seamstress — a damn fine one, I might add.

We had one of those families where Dad came home every Friday and traded Mom his paycheck for some cash. Mom paid all the bills and balanced the checkbook. She went to great lengths to save a penny wherever she could. When she felt she had accumulated an extra $50 we didn’t need, she went to the bank and bought a CD. My dad would often tease her because what she was doing seemed so miniscule in the grand schema of things. She was in her 70’s before she ever knew what it felt like to own a brand new car.

When my Dad passed away in 2001, he left my Mom with no debt and somewhere in the neighborhood of $240,000 in assets. As we saw her expenses increase due to dementia and a stroke that left her unable to walk without assistance, I couldn’t help but think of all the times she carted that $50 to the bank and said “this is so you and your brothers won’t have to take care of us when we get old”.

My Mom died last year at the young age of 92 and still had something left over to leave to her kids. Just goes to show that if you live smart, spend smart and save smart… things have a way of working out.



Oh my gosh… there’s a journalist who actually has a clue. According to Sebastian Mallaby1:

The claim that the financial crisis reflects Bush-McCain deregulation is not only nonsense. It is the sort of nonsense that could matter.

First, deregulation occurred in 19993 during the Clinton administration. Second, deregulation should have been a good thing. Third, deregulation and lack of oversight are not the same thing — legalizing hand guns does not give anyone the right to go out and murder someone. Fourth, every effort to exercise oversight over Fannie Mae and Freddie Mac failed to gain traction in Congress.

There are a few people who should be charged with committing fraud: they knowingly lied when they said “there is no problem”. There are a few others who at least deserve to be fired because of their stupidity and greed. And there is a whole host of politicians who should be terribly ashamed for not having the guts to go against their party and scream and yell until somebody listened.

One of my favorite movies is “The American President”. When I think about this economic mess we’re in and the impact it’s having on the election, I can’t help but recall what Rothschild (Michael J. Fox) says to Shepherd (Michael Douglas) in light of Shepherd’s waning popularity:

People want leadership, Mr. President, and in the absence of genuine leadership, they’ll listen to anyone who steps up to the microphone. They want leadership. They’re so thirsty for it they’ll crawl through the desert toward a mirage, and when they discover there’s no water, they’ll drink the sand.2

My biggest fear is that November 4 is going to leave most of us with an unexpected thirst.


The Obama-Ayers Connection

They lived in the same neighborhood. Who cares?

They met at a luncheon meeting. Who cares?

They were both members of a couple of note-worthy organizations. Who cares?

What I want to know is how in the #$%&! did a founding member of the Weather Underground Organization1 weasel his way into the position of Distinguished Professor at the University of Chicago where he has an enormous opportunity to shape the minds of young adults? We’re talking about a guy who as late as 2001 refused to believe he was a terrorist:

The reason we weren’t terrorists is because we did not commit random acts of terror against people. Terrorism was what was being practiced in the countryside of Vietnam by the United States.2

Granted there are 100’s of definitions for the word terrorism, but I can’t find a single one that doesn’t apply to William Ayers:

  • The use of violence and threats to intimidate or coerce, esp. for political purposes; the state of fear and submission produced by terrorism or terrorization; a terroristic method of governing or of resisting a government3
  • The unlawful use or threatened use of force or violence by a person or an organized group against people or property with the intention of intimidating or coercing societies or governments, often for ideological or political reasons4
  • The calculated use of violence (or the threat of violence) against civilians in order to attain goals that are political or religious or ideological in nature; this is done through intimidation or coercion or instilling fear5
  • The unlawful use or threat of violence esp. against the state or the public as a politically motivated means of attack or coercion6

Exactly what part of “terrorism” does William Ayers not understand?
To make matters worse, this madman has published several books dealing with what I deem to be some pretty radical methods of teaching and influencing young people. He wraps it up, slaps a bow on it and calls it educational and social reform.
Note to self: Do not allow my nieces and nephews send any of their kids to college in Illinois. They don’t grow them too smart in that part of the country.


3 Unabridged (v 1.1). Random House, Inc. (accessed: October 06, 2008)
4 The American Heritage® Dictionary of the English Language, Fourth Edition. Houghton Mifflin Company, 2004. (accessed: October 06, 2008)
5 WordNet® 3.0. Princeton University. (accessed: October 06, 2008)
6 Merriam-Webster’s Dictionary of Law. Merriam-Webster, Inc. (accessed: October 06, 2008)

Aye, Nay & Present

“You voted with insert-name-here…”
“Did not.”
“Did too.”
“Did not.”
“Tastes great.”
“Less filling.”

So exactly what do the Senate voting records1 look like? For the period beginning January 6, 2005 and ending October 1, 2008:

  • Of the 574 votes in which Biden, McCain and Obama voted:
      They all cast the same vote 204 times (35.54%).
      Biden and McCain voted opposite Obama 31 times (5.4%).
      Biden and Obama voted opposite McCain 318 times (55.4%).
      McCain and Obama voted opposite Biden 21 times (3.66%).
  • Of the 615 votes in which McCain and Obama voted, McCain and Obama cast the same vote 250 times. (40.65%)


Making a mountain out of a molehill

I just watched a television ad aired by DividedWeFail.org1 that said:

1.85 million Americans go bankrupt due to medical bills in one year.

I can only deduce one fact from that statement: either AARP or U.S Courts2 need to fire their editors and proof-readers. Surely there’s no way either of those organizations could have deliberately lied with an important election pending in November.

Here’s my problem: The bankruptcy statistics published by U. S. Courts just don’t match that number that’s being touted by

Here’s the facts: As of 2005, there are three types of bankruptcies:

  • Chapter 11 is primarily limited to a business restructuring, but also open to individuals with unsecured debt (like credit cards) exceeding $336,900 or secured debt (like mortgages) exceeding $1,010,650. While it’s possible that some Chapter 11 filings are due to medical expenses, these filings make up a tiny percentage of annual bankruptcy filings (well below 1% in 2006).
  • Chapter 13 is primarily for individuals who are behind on their loan payments. When you file for this type of bankruptcy, you get an opportunity to pay down your debt and keep your assets.
  • Chapter 7 is for business or individuals and results in liquidation of assets. This type of bankruptcy is where large medical expenses fall.

With the exception of 2005 when Chapter 7 filings spiked to a whopping 1,631,011, the number of filings has never exceeded 1.2 million for any year since 1990, with the number of filings for 2007 being about 1/3 of what’s being reported by

According to a study done by Harvard3, approximately one-half of the 1.4 million filings in 2001 were due to illness and medical bills. But the more interesting statement with respect to the Harvard study was this:

The study estimates that medical bankruptcies affect about 2 million Americans annually — counting debtors and their dependents, including about 700,000 children.

Now wait a cotton-pickin’ minute… it’s all beginning to make sense. If a married man with eight children filed for bankruptcy because of medical expenses, would you think I was painting an accurate picture if I said “10 people went bankrupt due to medical bills”? Sure there were 8 kids affected — and that’s sad… but to say those 8 kids went bankrupt is simply inaccurate because their future credit rating is neither related to nor affected by their parents’ bankruptcy.

If you’re thinking straight, you’d tell me I was a blooming idiot. But the sad fact is that millions of misinformed voters will be quoting between now and election day without ever knowing they’ve been duped. Thank you AARP — once again you’ve mangled the truth beyond recognition.


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