Outed on fin reg bill…

Rep.  Jeb Hensarling is a very,  very smart man,  and also clever as hell.   Yes,  Dems will  remove the language he so brilliantly inserted into the financial regulation reform bill,  but when they do,  we’ll have proof that Democrats favor the big banks over the public.

I’ll have more to say about the bill’s passage later,  when my heat-fried brain has recovered sufficiently to mull it over.

What financial reform?

If you think the financial regulation reform will change anything, read this New York  Times piece.   You can have no real reform without considering Fannie Mae and Freddie Mac,  which are largely responsible for the housing market collapse,  because liberals and progressives felt people who couldn’t afford houses should have them and those of us who are fiscally responsible should pay for them repeatedly,  endlessly.

The only stance which will bring abut real change is to say that if you screw up,  your company is liquidated and all officers are subject to having their personal wealth attacked.

This bill is a farce,  and the politicians pushing it know it.  Barney Frank deserves to roast in Hell for the damage he has done during his long tenure in Congress.   He is an intelligent man,  but a deeply flawed one,   and I don’t mean his sexual orientation.    The ugly truth is that most Congress critters would flunk a basic economics course,   which is one reason so many of them fall into Keynesian double-talk when confronted with reality.

It appears the public  ain’t buying it.   Neither are  market analysts.

Aunt Fannie, Uncle Freddie…

The two bad-debt-inundated entities have been de-listed from the stock exchanges.  After you read Ross Kaminsky’s post,  you’ll wonder why it didn’t happen a hell of a lot sooner.

Another nominee withdraws…

No,  not the incoherent and illogical Judge Sotomayor,  but the pick to be the Army’s top lawyer .     It appears Donald Remy referred to Fannie Mae not by name,  but as a “major U.C. company”,  a red flag of major proportions even if you aren’t in the Senate.

And the White House has made a mistake in refusing a request from Sen.  Chuck Grassley for all the exemptions it’s granted to Pres. Obama’s  ethics policy.    Grassley is now on a mission to see which high-level appointees received the waivers and why.     The administration is trying to ignore it,  pointing to the 4 waivers it has released,  often months after the hire,  but it looks bad for Obama’s claims of openness and transparency.    The good senator is a tenacious man,  and I expect this issue will pop up every other week and get coverage.

Congressional tendrils…

I found a column by  JB Williams which gives a neat history of the damage Congress has done to the country through the vehicle of  Government-Sponsored Enterprises.     GSEs are a clever means to accomplish things which can’t be managed legislatively,  and allow Congress to avoid responsibility for the disasters they perpetrate.

It should be no surprise that Democrats have always been extremely fond of GSEs, which serve handsomely to increase the reach and power of the federal government.  Fannie Mae and Freddie Mac are but two of the GSEs which haven’t turned out well.  And of course, one must not point out that Pres.  George W. Bush sounded the warning on both entitites many years ago.

Financial education…

Derivatives and  hedge funds make my head hurt, but in order to fully understand the folly of government, including Congress, and the financial sector, you need to know something about them all.  I have trolled for some comprehensible explanations which won’t cause permanent migraines.

Next, are 2 pdf files from Mercatus Center, both 4 pages long, the first on what role capital and leverage in financial markets played in the current mess.   The second deals with the role of hedge funds.

I also found one on credit default swaps which makes sense.

Finally, Stephen Spruiell details Democratic efforts to misuse Fannie Mae and Freddie Mac to reinflate the housing bubble which they were used by Democrats to create.