Jail The Looters

In the aftermath of the greatest financial crisis in a half century, progressives who seek additional governmental control jumped at the chance to increase financial regulatory instruments. Never let a crisis go to waste, you will recall.

Charged with crafting such policy were two Congressional members, both of whom should be investigated for their role in the collapse, Senator Barney Frank, D:MA and Congressman Chris Dodd, D:CT. Exactly what our corrupt government needed, inmates running the asylum.

With the Democrats holding super majorities in both Houses, the Dodd-Frank Bill became law. The basic purpose of the law is to prohibit fraud and chicanery in the financial system.

Someone forgot to tell former New Jersey Governor Jon Corzine, who was recently under consideration by the Obama administration as a potential successor to Treasury Secretary Timothy Geithner. After losing the governors race, Corzine, a Democrat, became Chairman of MF Global, and under his leadership, the company has filed for bankruptcy and is the subject of an FBI investigation. In short, the money is missing.

Bart Chilton, CFTC Commissioner who is on the circuit promoting his new book Ponzimonium, chats with The Squawk Box Crew; Becky Quick, Andrew Ross Sorkin and Joe Kernen, and guest host Mario Gabelli, on the recent increase of Ponzi Schemes and the goings on at MF Global. Take a listen:

The situation over at MF Global is very troubling and funds cannot be properly accounted for. Many investors appear out a lot of money, including Trends Research founder Gerald Celente, whose gold has seemingly turned to dust. The company cannot make investors whole, and Chilton says it is "suspicious as heck".

It should noted that existing regulatory agencies and the new far reaching Dodd-Frank bill, a job killing beast smothering business, failed miserably to prohibit Corzine and this group from crashing to bankruptcy, allegedly for the misappropriation of funds.

Remember in "Its A Wonderful Life" when the money went missing. George Bailey, upset with Uncle Billy, angrily quipped 'someone is going to jail, and it ain't gonna me me". Well, back in the day, folks did go to Sing Sing when money went missing.

It will be interesting to see, provided the allegations result in malfeasance and charges, if Democrat darling Corzine is prosecuted to the fullest extent of the law. You know how George Bailey would feel about it, but good guys are not winning these days.

Victims We All Know Well

It has been well documented, and I do not have to tell you, that the intervention of the government in the housing market has resulted in an economic disaster rivaling any of our day. Unfortunately, it is far from conclusion, and sadly, it was an orchestrated event.

The ripple affect of this catastrophe is simply mind boggling. Families being devastated by losing their is the face of the crisis, but the problems only begin there. Family wage earners have been caught in the tsunami of unemployment, smothering any attempts at digging out the hole. Home values have been decimated to such an extent that re-financing, even if qualified, is not an option.

Government intrusion is not the only culprit in this crash, with money center banks, fraudulent mortgage brokers and appraisers and Wall Street investors all playing a role. Certainly, although you will not read about in the media, let us not forget the American citizenry who bought homes they could not dream of affording.

On Sunday night, 60 Minutes presented a strong story on banks misrepresentation as part of their foreclosure efforts. Although 60 Minutes has presented a handful of stories on the housing crisis of late, they are quick to vilify Wall Street but never get around to placing any blame on government, or heaven forbid, President Obama. Perhaps Scott Pelley is unaware of the role of ACORN, who Obama remains closely associated with.

There are many victims, including those who have lost homes and jobs, who are close to each of us. Most, if not all the culprits, secured golden parachutes and remain free to wreak havoc on the next group of victims. Jamie Gorelick, Franklin Raines and Andrew Cuomo come to mind.

The amount of fraud in the housing crisis is staggering, and this piece details only one aspect of it, but it is well worth you taking time out to get brushed up how this fraud continues to haunt our lives.

Such Joy In Crackerbox Palace

These days, every day is a real head scratcher. A whip around the news of the day leaves you wondering when you passed through the worm hole. As astonishing as it is, you cannot wake up from it, for it is real. Welcome to Crackerbox Palace!

There are hundreds, but here are three cases in point.

Treasury Secretary Timothy Giethner, who failed to pay his taxes unlike the rest of us, wrote a recent editorial in The New York Times that welcomes us to the recovery. Is he just this stupid, or does he think flyover country is stupid or is he just outright lying to our face. There is no recovery going on. President Obama claims under his direction, we are on the right track and the worst is behind us. One would hope with all the stimulus, a recovery could be sparked, but it has not happened with unemployment on the rise and the housing crisis that at best could claim it is gaining stabilization, a double dip recession, or perhaps a continuation of the one we have been in, is coming.

Radical Islamists are attempting to build a mega mosque 600 feet away from Ground Zero, which you would think would be immediately thwarted by sound thinking government officials. Nope. In fact, they are embracing the potential construction citing harmony. I am vehemently against the mosque, and have blogged on the subject not once, but twice. However, this is no doubt the best example of political correctness gone amok I have ever seen. Oh, it gets worse.

Imam Feisal Abdul Rauf, a Kuwait-born Muslim, leads the Cordoba Initiative project. A supporter of Hamas and one who feels the US brought 9-11 upon ourselves, has been given funding by the State Department to go to the middle east to spread goodwill and raise money for the project. On our dime? We are joining the terrorists in financing this mosque? No way! Most media could not care less, but Sean Hannity is not pleased, and neither is Glenn Beck, who goes off in a must see monologue.

Those who do not understand the financial markets should not be falling all over themselves to craft regulatory reform of the financial markets. They are and they did, as the financial reform bill passed. The bill was crafted by Rep. Barney Frank, D:MA, and Senator Christopher Dodd, D:CT, both of whom are lucky not to be in the federal lockup.

Central to the housing crisis is the mismanagement of Fannie Mae and Freddie Mac, government sponsored entities who play monopoly in the mortgage markets. Frank, chairman of the committee that oversees this bunch, joined Andrew Cuomo, The Architect of Ruin, in failing miserably to adequately manage these GSE's. The amount of wealth destroyed by this mismanagement is historic. So, Frank is an idiot at best. Dodd, who dances around ethical behavior, got a sweetheart loan from Countrywide, now a part of Bank America (BA:NYSE) and the first major mortgage company to bite the dust. The arrogance of these men is astounding, but that our Congress would allow these two clowns to craft the unnecessary regulatory reform bill (FINREG) is mind boggling. No doubt Jethro Bodine was unavailable.

When we elect these idiots like this, we get what we deserve. And what did we get with FINREG? Fannie and Freddie, bleeding cash as if they are swimming in a piranha tank, were not included in the bill. So the centerpiece of the fraud, that Dodd participated in, Fannie and Freddie, fail to make the list of things to reform? Oh my!

The mind boggling decisions we witness that are made almost daily, by each branch of government, cannot be the result of incompetence. The destruction of our country, and our Constitution, is unfortunately deliberate. It is time to pull your head of out the sand and draw a firm line in it.

Don't you get it? While we were busy living our lives, we have checked into Crackerbox Palace. The Progressives have been expecting us.




Check out time is the first Tuesday in November!

Are We Ourselves?

What is going on America? Are we ourselves? Are we being played as a ship of fools while Captain Earflaps and his wing nuts Cloward and Piven transform America into a socialist nation. While much of the nation is busy voting for singers on American Idiot, the answer unfortunately is yes. Yes they can!

Well, No You Can't.

The Congress is passing mammoth legislation that no one has even read. And, you guessed, that includes not only the members of Congress, but the bill sponsors. Get a load of the arrogance of Speaker Nancy Pelosi:



As you appreciate, some real interesting things have turned up in the health care bill, including a stealth tax on Gold, which has been rising in value as a safe haven against the Obama economic policies. CNBC's Larry Kudlow speaks with Steve Moore of The Wall Street Journal about the issue:



Not only am I seriously concerned about what else we may find in the health care bill, I am even more petrified about the secret items tucked away in the financial regulation bill. FINREG, as it is known, was crafted by Senator Chris Dodd (D:CT) and Representative Barney Frank (D:MA), both of whom are central players in the housing crisis. Instead of leading on legislation governing the financial industry, given their unethical behavior and ineptitude in the governance of Freddie and Fannie, they should be expelled from Congress.

Glenn Beck covers FINREG, oh and so much more, extensively for those of you out of the loop:



Meanwhile, as Glenn mentioned, we have radicals surrounding President Obama. Many of those are members of the 1960's group The Weather Underground. Glenn has discovered their manifesto You Don't Need A Weatherman To Know Which Way The Wind Blows, and it is simply a must read. Once you read it, and you MUST, you will recognize actions currently being taken by our administration and your internal instinct will yearn for your attention.

We learned affirmative action requirements for Wall Street firms existed in FINREG, and today it was discovered that the new financial regulation law exempts the SEC from Freedom of Information Act, thus allowing them to steer clear of having to legally provide documents when questions from the public and the rare instance a news organization formally makes a request, which was FOX Business Network in this case.

Obviously, it has long been forgotten who works for who, and the promise from President Obama to have the most transparent administration is proven to nothing short of a bold faced lie! It was through the freedom of information act we learned of the patents for carbon trading and electrical locking systems patents Fannie Mae won. Yeah, that's right, the government's housing arm Fannie Mae.

You would think the situation is nothing short of out of control, but in fact, is is the plan and has been the plan all along. Obama and his radicals are aiming to destroy capitalism (imperialism in the manifesto) aiming to advance the formation of a Dictator for a new democracy to develop a socialist system. Although America is waking up, many seem to be going right along with it. That is not who we are. We are proud Americans, who value liberty and freedom.

Are we ourselves?

While I will pledge my life, whatever is left of my fortune and my scared honor to fight these tyrants, in asking the question are we ourselves, given what it taking place, it seems crystal clear the answer is an emphatic NO! But if I am asking the question, I may as well hear some good tunes while I am at it, which I plan to do as Cy Cronin and The FIXX hits Hard Rock Orlando Thursday night. As such, Are We Ourselves:

Lessons Not Learned

Unfortunately, the financial bill (FINREG) has passed. Crafted by two of the top members of the architectural team of the housing crisis, Rep. Barney Frank (D;MA) and Sen. Chris Dodd (D:CT), this bill be deal a serious blow to the consumer. In addition, it will add further negative pressure on the housing market long term.

FOX Business takes up the potential effects in the following interview:



The new bill, over 2000 pages with many of the particulars of the legislation yet to be firmed up, will simply be devastating to small business and consumers. Governmental regulation increases costs which limit the choices of the consumer.

The banks will not be free to lend as they see fit, in their own communities taking into account current local market conditions, but will be governed under the new regulatory framework of this bill. It certainly will make effort to secure credit by the consumer more costly and much more difficult to obtain.

While we had to pass it find out what in it, there have been some real distressing items uncovered, from regulations on insurance to affirmative action hiring quotas for Wall Street.

Among the more puzzling items, the bill does absolutely nothing to rein in Fannie Mae and Freddie Mac, the government sponsored entities which contributed greatly to the housing crisis. Imagine that! CNBC has more:



The bill, signed in a ceremony at the Ronald Reagan Building, is insulting as it is in direct opposition to the principles and economic beliefs Reagan championed.

It would be great for Americans to let the following sink in: Free Market Capitalism is the best path to prosperity!

Economic Teachable Moment

Today, we saw the DOW downdraft almost 1000 points before settling in with a 350 point loss. There are news reports of a trading error by CitiGroup (partially Govt owned). At any rate, growing concerns over the debt with the PIIGS, the immorally increasing debt of Uncle Sam, an onslaught of entitlement programs and increasing excessive regulatory mechanisms and taxation has left our financial markets very trigger happy, and rightfully so.

Unfortunately, the problems in our economic climate will be increasing due to the numerous missteps by the Obama administration. Reaction to the staggering debt and the unsustainable increase of liabilities you see playing out in Greece this week is a preview of things to come here on Main Street if we don't abruptly change course.

Critical in that new course would be for the Obama administration to about face and embrace the entrepreneur. The strength of our economy is the growth of existing and the emergence of new small businesses, who do the greater majority hiring. As a small business owner, I can tell you regulation has become a significant barrier, and will get worse if the financial reform package, spearheaded by the corrupt Senator Chris Dodd (D:CT), who we have blasted in the past, becomes law. The Obama pledge of not raising taxes on families making less than 250K annually has already been broken, and the extra taxation extracts capital, the mothers milk of business expansion and credit, from the system.

Either the Obama administration is stupidly ill informed on the subject or is attempting to crash the system. Perhaps they could learn a thing or two about the role of the entrepreneur in the success of a growing economy by listening to a recent interview of Carl Schramm of the Kauffman Foundation by Erin Burnett of CNBC.



The solutions to the economic problems for Uncle Sam are strikingly simple for the Obama administration and our congressional leaders, or anyone, to grasp if the motivation is there. It starts with the embracing of the entrepreneur to create new small business opportunities.

Many of these emerging companies will fail, and lessons will be learned. This is the route to take. Turning bailout nation into bailout planet is traveling down a road that will lead to the events you see in Greece. When it happens, you know who to blame.

ABC News Awakes From Coma!

An extension of the unemployment benefits is being "blocked" by Senator Jim Bunning (R:KY). Certainly, the American people deserve answers as to why Sen. Bunning, obviously an evil public servant, would place so many jobless American workers on the verge of starvation! The horror of it all!

Thankfully, for us idiots at large, ABC News is on the story like a cat in a tree at 4th and Main!



Good Grief! The media bias and hypocrisy on this is in the stratosphere.

As a youngster, I switched from Cronkite and CBS over to Peter Jennings and ABC News World News Tonight as my preference. In recent years, I have briefly met both Diane Sawyer and Charles Gibson, who both seemed to be neat people.

But ABC News has been nothing short of asleep at the switch for the better part of a decade. Recall Charlie Gibson stumbling around having no idea of the goings on of ACORN when they were exposed? Where was ABC, or any of the 3 networks, when Obama's radical czars were exposed, on the exposing of Charlie Rangel's many illegal activities, Obama's relationship with ACORN and stimulus money going to Congressional districts that do not exist? Surely they were all over Barney Frank and Chris Dodd's practically criminal oversight of Fannie Mae and Freddie Mac? Have they questioned Nancy Pelosi, who proclaimed to clean out swamp and run the most ethical House evah, on the long list of unethical behavior in the House? Paygo? Hello!

They completely missed the tea parties for crying out loud! And what about the global warming scandals?

For a myriad of reasons, with bias being at or near the top of the list, the network news divisions are quickly becoming a dinosaur. As Bernie Goldberg put it, if you are heading up one of these news divisions, you are essentially running a morgue.

Serves them right! And for the record, Bunning is still right!

Hypocritical Heathens

Senate Majority Leader Harry Reid, unable to comprehend the voice of the American people roaring their objection to health care reform, threatens on the eve of President Obama's health care summit to use reconciliation to pass the legislation. Funny, but the leaders of the Democrat party seem to have conveniently had a timely change of heart on this subject. Listen to the following:



HT/Briebart TV

Our system is built on a series of checks and balances which are designed to prohibit one party, group, individual or branch of government from overreaching, particularly in opposition to the people. In the video, Biden talks against it but now that he is in power is right in the thick of participating in it. Not a man of character in my estimation.

The health care reform if passed is set to nationalize one sixth of our economy, putting health care in the hands of the folks who cannot run cash for clunkers. The bills as written, which only a handful of our elected officials have actually read, should lack a heart beat. Unfortunately, however, those drunk with arrogance are willing to display their power against the wishes of the American people. I hope the folks will recognize the arrogance of this attempted power grab and the high level of hypocrisy by these carnival salesman and send them a message they will understand: a defeat at the ballot box.

In the meantime, join me in doing everything you can to defeat this health care reform bill!

Media Thugery

If you were unaware that the media was completely in the tank for the Obama administration, after witnessing the following interview, you will know.

MSNBC's Lawrence O'Donnell, a deep economic thinker to be sure, has a segment with Euro Pacific Capital's Peter Schiff, who is among the few that predicted the economic troubles we now find ourselves in. Take a listen:



HT/HOT AIR BLOG

The level of arrogance exhibited by O'Donnell is pathetic. It might be one thing if O'Donnell, a socialist, even dreamed about knowing what he is talking about, but his juvenile behavior is sadly fitting the current antics of the NBC News division, which is owned by General Electric. GE CEO Jeffery Immelt is on Barack Obama's economic council, and GE is set to benefit greatly from the Cap & Trade bill provisions.

For those of you who voted for change, this is likely not the type of change you thought you were getting. But for some, you may have a chance to make some changes. Schiff is entertaining a run for the Senate seat currently held by Chris Dodd, a complete disaster as a public official.

I am much in favor of that type of change!

HVCC Wreaks Appraisal Havoc

Some inside baseball....

On May 1, 2009, the Home Valuation Code of Conduct became law as a regulatory mechanism on the hiring and management of the appraisal process.

Since many feel, inaccurately, that appraisers are central to the fraud associated with the Housing Crisis, the government, led by New York Attorney General Andrew Cuomo, D-NY, has implemented the HVCC. Although no governmental official is apparently interested in investigating the role of many of their own, inclusive of Chris Dodd, D-CT, with his sweetheart loan from Countrywide's Angelo Mozillo and/or Barney Frank, D-MA, who was the regulator of Fannie and Freddie while accepting campaign contributions from both, in the housing crisis, they did determine that legislation regulating appraisers was in order. Of course, as you may imagine, there already exists regulatory bodies that can examine appraisers conduct and the quality of the work through the Uniform Standards of Appraisal Practice. As is the case with Realtors and Brokers, licenses can be suspended or revoked and fines can be imposed.

The HVCC mandates that for an appraisal on a conventional loan, the appraisal must be ordered through a third party, referred to as Appraisal Management Companies, which are unregulated. The companies often receive orders from the lender and then employ an appraiser who has registered with the company to perform the appraisal. The fees are generally split, thus cutting the appraisers fee in half.

Beyond that, previous relationships the appraiser has worked hard to obtain and cultivate are lost. Needless to say, this legislation impacted the revenues of most appraisers as conventional appraisals now make up about 40% of the market. In addition, fees obtained by the appraiser for those orders they are fortunate enough to receive are halved.

Due primarily to having to meet strict time constraints, the quality of work delivered by appraisers under this system is diminished. With appraisers looking to recoup lost revenues, appraisers may be inclined to accept work in areas they are not particularly familiar with and in striving to meet time deadlines, they may not perform as much research as they commonly do.

Miller Samuel CEO Jonathan Miller speaks with Brian Sullivan and Dagan McDowell of the FOX Business Network about the HVCC. Take a listen:



The Orlando Sentinel recently presented an article outlining many of the issue swirling around the HVCC.

When an appraiser signs a report, that appraiser is responsible for its contents and must be able to defend the indicated value of the subject. If challenged by the current appraisal regulatory bodies, penalties, inclusive of loss of license (and ability to work in the business) are possible.

As usual, the government has infiltrated a business environment and caused more problems than they set out to correct. Whose to say the Appraisal Management Companies will not pressure appraisers for a value?

Free Market Capitalism, one where government regulation does not prohibit a business owner from doing business with his clients, is the best path to prosperity. Prosperity seems to be hiding these days, and I know why.

Kudlow Report Lives On!

CNBC's Larry Kudlow had been rumored as a possible opponent against Chris Dodd for Senate in Connecticut. Since, apparently, no one has the the stones to go after Dodd, we will have to do it the old fashioned way, by voting him out.

Although it would seem Casper the Ghost would be a stronger and more ethical Senator than Dodd, Kudlow, a former Reagan economic advisor, would in my view be a strong candidate. However, Kudlow announced last night he signed a new contract with CNBC and will not seek a future in politics.

It would have been fun to see Kudlow dismantle Dodd, but I am a huge fan of The Kudlow Report nightly on CNBC and would have missed Larry terribly. Keep up the great work Larry, and may the Kudlow creed, "Free market capitalism is the best path to prosperity" live on!

A Ship of Fools

On the day before Valentines a month ago, Time Magazine put forth an article noting the 25 people to blame for the current financial crisis. Among the guilty listed were Christopher Cox (R:CA), current SEC Charmian, Angelo Mozillo, former CEO of Countrywide Financial, the American consumer, Franklin Raines, a former Clinton budget director and team Obama financial advisor who left fraud infested and bankrupt Fannie Mae with a $90 million parting gift and former Presidents Bill Clinton and George W. Bush.

All the aforementioned are on my list. Mozillo and Raines should be jailed while Cox represents the ultimate example of being asleep at the wheel. Clinton, although he has a disengaged memory of this, started programs which in part led to this debacle while Bush, although he publicly asked Congress for derivatives reform, was Charles in Charge as the situation broke horribly loose.

For the record, GOP Presidential hopeful John McCain (R:AZ), put forth legislation to rein in Freddie and Fannie while President Barack Obama, who complains daily how he inherited this mess, voiced not a peep regarding the housing crisis or credit derivatives on the very few times he engaged the senate floor. He does, however, have a long term association with ACORN, which leads me to the question the Time list.

In the world of BAHL, four of the top culprits were astonishingly omitted on the list by Time. Consistent with the presentation Time put forth, here are my missing four:

Barney Frank (D:MA), Chair of the House Financial Services Committee

Chief among the fools on the hill we can blame for this mess is Barney Frank, who has arrogantly bungled issue after issue. When President Bush asked for the congressional leadership to shore up the derivatives market and the balance sheets at Fannie Mae and Freddie Mac, Frank got twisted and angrily proclaimed that Fannie ( FNM:NYSE) and Freddie (FRC:NYSE) were fine and had no issues. Keep in mind the government runs Freddie and Fannie, and from his perch atop the House Financial Services Committee Frank missed the herd of pink elephants running around. In addition, under the leadership of Franklin Delano Raines, Fannie Mae was found guilty of fraud (accounting errors for those with friends in high places). Frank was a longtime champion of Freddie and Fannie, scolding members of congress who questioned the soundness of these GSE's and running interference to those who got in the way. Obviously, Frank was motivated to back Freddie and Fannie or he is an idiot.

ACORN

If you are looking for a quote unquote non-profit organization that operates with a mob style that imposes it's will on American commerce, it is the Obama friendly fraudulent organization of ACORN. You really need a history of the decades long role this organization has played in this crisis. Through civil disobedience, ACORN continues to interject their ideas in the marketplace even today.

ACORN pressured lending institutions to increase lending to those with less than stellar credit worthiness, essentially minorities, by threatening to march in front of their business or even haul them into court for discrimination. One of the young member of the ACRON legal team was Chicago's Barack Obama. Fearing the unknown of squaring off against this group, many lending institutions caved in and began stretching their lending guidelines.

Chuck Schumer (D:NY)



Chuck Schumer, (D:NY), finds the folks he represents as lower class chatterers who have not the knowledge to interject with the intellectually superior elite like himself. Schumer may have ignited this whole cascade of bank failures by making ill-advised and potentially illegal comments about Indymac bank, which resulted in a run on the bank. At a minimum Schumer had a fiduciary responsibility to keep his mouth shut on information about Indymac he had gained from his governmental position. Violation of the responsibility to the magnitude of Schumers actions are borderline criminal. After Indymac failed, the doors got kicked open and the scramble to struggle for solvency was initiated. Was this an idiotic move or a grand scheme to destabilize the banking system to make the Bush administration look bad? Either way, Schumer's actions are arrogant and destructive.

Chris Dodd (D:CT)

Christopher Dodd has his hands in the housing crisis more than anyone else on Capitol Hill, and he should be asked to resign immediately if not impeached. I have been calling for this for quite some time. Dodd got a favorable loan from Countrywide, a loan with terms not available to the common man, and claimed he was unaware of it. It would not be a stretch to think the Chairman of the House Banking Committee had little knowledge of mortgage loan terms given the level of competence we see in Washington.

Imagine the Chairman of the House Banking Committee getting a favorable loan and failing to notice any issues with Countrywide, Fannie or Freddie or issues with unqualified home buyers being granted mortgages. Somehow, Dodd managed to escape with his job after this debacle but now is embroiled in a scandal over the bonus compensation the executives at American international Group (AIG:NYSE)have received.

As the turmoil around AIG continues to evolve, it is interesting to note that a top recipient of campaign contributions from AIG, rivaling President Obama, is Dodd. Dodd has been caught skirting the truth at best in this scandal, as his incompetence continues to hurt this country.


Our Congressional representation thinks America is back lashing at these bonuses being paid to AIG workers, but they are mistaken. America is pissed at the Congress, and quickly becoming disappointed in President Obama, who I think is learning on the fly while he drastically aims to enact policy that places this country in economic, social and geopolitical peril.

Conditional Bailout Presents Rare Chance

The economic events of the last several quarters have been exhausting and have inflicted immense pain on many Americans, yours truly included. Obviously, although I am sure well intended, much of the governmental action, particularly in the form of orchestrating bailouts, has not been successful as Wall Street remains in freefall. Today's action suggest a very serious test of the recent lows and a break of those lows with any sort of conviction could send the DOW into the 6000's. Not pretty.

The issues facing the treasury and The FED are massive, and I recognize the simplicity of arm chair quarterbacking without keen insight to the information these agencies are dealing with. However, I would like to comment on the potential bailout the Big 3 automakers, GM (GM:NYSE), Ford (F:NYSE) and Chrysler. I will attempt to be brief, but it is an extremely complex problem.

First, almost daily on CNBC and FOX Business, I repeatedly hear a host or a guest fire the comment out that these firms do not make quality vehicles the public would want. This is total bullshit! I personally own a Chevrolet SUV and a Pontiac sedan and both are superb, particularly the Pontiac GXP. Both have over 60K miles and not withstanding the Goodyear (GT:NYSE) Racing Eagles I have had to replace, I have not spent over $1000 combined on these vehicles. Good God, I hope I did not just curse myself.
GENERAL MOTORS 2009 PONTIAC G8 SEDAN, MOTOR TREND CAR OF THE YEAR FINALIST

The problems the automakers face has nothing to do with a lack of product quality or vision for design and appeal of the current or future vehicles. In fact, outside of Chrysler's Bob Nardelli, who ran Home Depot (HD:NYSE) into the ground, the management is not all that bad in my view. The automaker CEO's do have a pink elephant in the room; the unions.


The automakers were running on the tightest of margins, hampered by governmental regulation, taxes, tariffs, global climate change initiatives (no, I am not kidding) CAFE and emission standards and union demands that are completely illogical and lack any sort of flexibility. They maintain the margins by relying on the consumer to continue turning over inventory every five years or so as outlined by analyst modeling based on long term data. BOOM, the housing market fell off a cliff and consumers got caught up in, with ironic apologies to The Motor City Madman Ted Nugent, a stranglehold.

With consumer expendable income squeezed dry, big ticket purchases are the first thing to be placed on the sideline. Demand for these items has not gone away, but quantity demanded has fallen off a cliff due to skyrocketing gas prices (which have since subsided but the consumer has zero confidence they won't soon return), uncertainty about the economic near term future and the extreme difficulty in obtaining credit, which is the lifeblood to our consumer driven economy. No consumers mean no revenue and with that comes the instant inability to reach those already razor thin margins, and it is not even close.

So, should they be left to wilt under fire and cease to exist, crushing thousands of jobs and creating a untold tiered ripple effect. Without some serious revisions to business as usual, yes.

However, we are presented with an opportunity at this time, and our representatives on the hill should take full advantage of it.

Organized labor under The United Auto Workers is the main culprit hampering the industry in the effort to be competitive with foreign automakers, particularly those with plants in the United States. Legacy costs create a burden that is estimated to represent over $2000 per vehicle in additional costs which in this extremely competitive environment is just a killer. Union contracts force the automakers to pay inflated wages which creates inefficient market conditions which are unsustainable. Blogger Mark Perry, Economics professor at The University of Michigan (Flint campus), provides a chart of the breakdown on his Carpe Diem blog.

Recent negotiations between the Big 3 and the UAW have planted mustard seeds as incoming workers are paid competitive wages while the legacy costs are estimated to fall off dramatically over the next decade. I did recognize that at the table before the congress along with the CEO's of the Big 3 was the UAW representative. It is not the Big 4, or is it? Against the backdrop of bankruptcy, the UAW rep really does not have dog in this hunt. Part of the existing UAW contracts indicate a certain level of paid hours of workers, regardless of fluctuations in quantity demanded and production levels. Would you run your bakery or hardware store like that? Should a bailout, or workout as former Mass Gov. Mitt Romney (R) puts it, move forward, major concessions should come from the UAW. In fact, they promote inefficiency, are unnecessary and should cease to exist in my view.

The government also places tariffs on intercontinental automobile trading, giving foreign competitors a significant competitive advantage. Since trade agreements must be adhered to until the time period of the agreement is exhausted, perhaps Uncle Sam should issue tax incentives to consumers who purchase US autos? This could work, but the issue of consumer credit must be solved or there will be no buyers to grab that incentive.

The government has already signed off to give the automakers 25 million to predominantly deal with the emission standards the government has placed upon the automakers. I know I will be labeled on par with a holocaust denier to speak out that global climate change is a farce, but in light of limited evidence to the contrary (record low in Orlando this morning), perhaps the government could suspend, or I may recommend, eliminate, these cumbersome regulatory restraints and directives? At any rate, with bankruptcy looming, they could use that money to stay alive.

All three US automakers are making impressive progress in fuel efficient vehicles, and most of the GM fleet gets over 30 MPG. The Chevrolet Volt, shown below, should be a huge seller.

GM INNOVATION IN ELECTRIC VEHICLES COMES TO THE CONSUMER IN 2010 WITH THE CHEVY VOLT

I had to laugh watching Chris Dodd and Barney Frank presiding over the hearings with the Big 3 CEO's. If the housing crisis did not unfold, the automakers would not be in the position the currently find themselves in, and Frank and Dodd were asleep at the wheel as that problem emerged (would the fine folks of Connecticut and Massachusetts please toss these corrupt idiots out of office?). Governmental regulatory intervention and organized labor eliminate any fighting chance the Big 3 have to competitively emerge from this debacle. These barriers to competitiveness should be eliminated yesterday.

Since the government contributed to the cause of the problems that saddle the Big 3, government should assist them in the way out, and then get the hell out of the way! The auto industry is not a normal business, and it's importance to America is quite significant. I think some sort of workout, either a bankruptcy with a partial governmental backstop or a bailout/workout with a conservator (Romney?) is necessary as I fear the aftermath and costs of complete failure significantly surpasses that of a workout.

But if the Big 3 are going to take the taxpayers money, they must adhere to conditions, and those would include but not be limited to elimination of the UAW, the restructuring and rewriting of current union contracts, elimination of duplicate models (Saturn Sky and Pontiac Solstice, for example) and the reduction in the amount of dealerships (which does not necessarily include the elimination of product lines). If bankruptcy is the option taken, the government should be cognizant of the effect on warranties (would require some sort of backstop) and the potential impact of the tiered suppliers which could be severely damaged or lost in the ripple effect, including companies like Johnson Controls (JCI:NYSE) and Lear Corporation (LEA:NYSE). Evaluating the landscape on this issue, I find a workout of some sort is critical to our economy at this time.

I find it poetic that during green week, partly because government has forced the industry to spend unnecessarily on green initiatives, we need to pass out armored cars full of greenbacks. A vicious circle indeed. It makes you want to pull the hair out of your head and set yourself on fire.

After that depressing commentary, for our listening pleasure I present Ford truck owner and Detroit native, The Motor City Madman Ted Nugent, with Stranglehold.

Collecting ACORNS

Since the economic crisis landed at our doorstep, the McCain-Palin campaign has lost ground to Obama-Biden, due in large part to the majority of country associating the crisis with the GOP. Although information to the contrary is readily available, inclusive of a 2005 Bill co-sponsored by John McCain, R:AZ, to reform Fannie Mae and Freddie Mac, a firestorm of incorrectness burns.

Key Democrats, including those in leadership such as Barney Frank, D:MA and Chris Dodd, D:CT, are up to their eyeballs in this storm and should resign immediately, as we have already called for with respect to Dodd. Details of the impending issues were outlined in an article in The New York Times, in 1999. What is not common knowledge is the role Barack Obama has played in this. Yes, through his actions and associations (by howdy, this is a long list), the role is significant. Glenn Beck discusses this in an interview with David Freddoso of National Review.

Pelosi Pontificates

Speaker of the House Nancy Pelosi, responding to President Bush lifting the executive order to prohibit drilling in the outer continental shelf (OTS), offers that the President is a "total failure".


Talk about the pot calling kettle! Her tenure as Speaker may well go down in history as least productive in history. While hearings have been taking place to put on a public spectacle of the oil executives, the Pelosi led congress has offered nothing in terms of realistic solutions, has blocked efforts to drill, failed to support the clearance of permitted drilling, bemoaned speculators and dismissed promising efforts, like ANWR. She recently penned a letter to Bush urging him to release portions of the strategic reserve, a naive and dangerous idea given the geopolitical turmoil we currently find ourselves engaged in. Former Speaker Gingrich, a private citizen, has far eclipsed Pelosi in efforts to find solutions.

She claims Bush has lost all credibility on the war ( very strong performance if you ask me), the economy (none of these problems are at his feet) and energy (He was tardy in calling you out for sure).

Other issues plaguing her, not withstanding the food service which went private after squandering millions of our dollars, center around the party of corruption, her party. The House Banking committee is of immediate concern. Chuck Schumer ignites a run on a bank from his careless at best media relations, Christopher Dodd is overseeing a bailout of the subprime crisis in which he got a preferred loan and is consulting with the parent of that company in crafting the legislation. You just want to pull the hair out of your head and set yourself on fire.

For her to chastise President Bush given her complete incompetence is mind boggling. She should be embarrassed, and if she had any dignity, should resign. A deadline is looming on September 30 to extend the congressional ban on the OTS. At that time , watch her fold as her weakness will be on display.

Time To Dump Dodd

Among many who need to resign from public office is Christopher Dood, D:CT, who is Charmian of the Senate Banking Committee and until recently a vice presidential candidate for Senator Barack Obama on the Democratic side.

The complete arrogance of this lightweight is astonishing and his recent actions at best border on unethical.

Dodd currently sponsors a bill with Richard Shelby, R:AL, designed to provide several options of relief for homeowners who face foreclosure and/or problems satisfying their mortgage requirements. I am opposed to such legislation and am hopeful that if it arrives on the desk of the President, it will be vetoed. However, as admirable as these intentions are, Dodd's involvement is extremely troubling given recent revelations about his activities.

Forget that Dodd had no earthly idea this housing crisis was coming, he reportedly participated in it by receiving a loan with preferred loans status from Countrywide Home Loans (CFC:NYSE), the poster child of non conforming loans who has been destroyed on Wall Street and is currently under litigation. For those who do not follow the goings on on Wall Street, a significant capital investor of Countrywide is Bank of America (BAC:NYSE). Please see the June 13, 2008 story on this in The Wall Street Journal at: http://online.wsj.com/public/article_print/SB121332396326070639.html

This revelation should knock him out right there, but there is more. Since many of the members of congress are not qualified to write complex bills which carry significant impact on financial markets, they get assistance from market players. Assisting Senator Dodd and Senator Shelby with the construction of this bailout reportedly is, you guessed it, Bank of America, along with UBS.

This should be cause for concern for all of us taxpayers, since we will foot the bill through our taxes to support those who incorrectly forecasted their mortgage obligations. The monetary discounts that Countrywide shaved off for their "friends" were not available to the rest of us. Given the participation of Dodd and Bank of America in this "special treatment", it seems obvious this should be grounds for Dodd and Bank of America to have zero involvement in crafting this type of massive financial legislation at a minimum.