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.

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.

Freddie Mac investigations

The Feds are now probing Freddie Mac, partly about whether the company properly disclosed the risks associated with mortgage-related investments.    The apparent suicide  of its chief financial officer has put this story on the Washington Post.

Politico.com is reporting that the CFO, David Kellermann, had recently been involved in a heated dispute with Freddie’s regulator over how to reflect the costs of  Obama’s anti-foreclosure program.

I think it’s safe to assume that His Oneness, along with Barney Frank and Chris Dodd,  would prefer for the whole matter to disappear swiftly down the memory hole, before anyone becomes so impertinent as to dare ask a few awkward questions.

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.

Weapons of A.I.G. distraction…

The hyperventilating,grandstanding of all the hogs at the trough in yesterday’s excoriation of A.I.G. CEO provided excellent cover for any number of things,  such as the fact that His Oneness knew about the AIG bonuses on March 12th, but didn’t present his Monday speech until after the public reacted badly.

And never mind about the further grandstanding as Congress passes legislation to “take back”  the AIG (and other) bonuses — which is unconstitutional, because it’s punishment without a trial, making it a bill of attainder, no matter how frothy the dress of populism is that they are attempting to throw over it all.

You didn’t hear much about the retention bonuses Freddie Mac is paying its executives, or the ones Fannie Mae expects to.

Politico revealed this smack on the Obama administration by former Labor Sec. and devoted lefty-lib, Robert Reich.

You didn’t hear much about Federal Reserve’s plans to pump more than $1 trillion into the financial system by buying Treasury bonds and stepping up its purchases of other debt securities.   The aim is to lower borrowing rates and stimulate lending.   The talking heads will tell you how complicated this all is.    Not true.    This is merely taking money out of one pocket and putting it into another.    Are  you any richer when you do that with your own cash and your own pockets?  That’s why no one wants to talk about it.