Finreg...Huh?

This past week Congress passed the most sweeping financial regulatory reform since the 1930’s. Because I tend to be a tad verbose in my opinions, numerous folks have asked me what I thought about “finreg” (shorthand designation for financial regulations). Given that I have a hard time balancing a checkbook, I quote Sergeant Shultz with an emphatic “I know nothing…I hear nothing!”

That being said, here is what I know. In September of 2008, the world financial system was hours away from total collapse. There literally was a run on the bank. Not from ordinary people, but from other banks that scrambled to cover all of those ingenious collateralized instruments in their portfolios as the weight of debt collapsed the system. It was scary. What was even more disconcerting was the lack of understanding of the problem by many of our national leaders. Notwithstanding, whether in spite of their actions or because of their actions, these folks managed to stop the bleeding and we survived…barely!

There were two roots to the problem. The first was the rescission of the Glass Steagall Act passed in 1933 in response to the Great Depression. This separated retail banks (the ones you and I use) from investment banks (the ones that underwrite stock issues and trade bonds). Bill Clinton repealed this as one of his last acts in office. In fairness to Clinton, he repealed it because it made our financial institution non-competitive with other international banking entities; but it opened up the abuse floodgates to those kinds of instruments that the law was intended to prevent. It only took nine years for the poison to kill the system.

The second were abuses at Fannie Mae and Freddie Mac in the issuing and trading of mortgages to folks who couldn’t afford them. This was a direct result of governmental policy fueled by both parties. Bush believed in an ownership society…and Barney Frank said "Amen" to that. We were off the races as home loans were given to anyone who could almost spell their name and had ten bucks in their pocket.

I am old fashioned. I believe in old fashion values when it comes to modern finance. If you want to buy a home, put 20% down and get a responsible appraisal as to the value of the real estate.

And if a bank issues a mortgage, the bank should carry the paper…not resell it. That way, they will be double sure as to whom they are loaning money.

If you want to buy a credit default swap (an insurance policy insuring a bond), you should have an insurable interest in the bond. I can’t buy a life insurance policy on a stranger betting he is going to die. I shouldn’t be allowed to buy a default policy on a bond owned by stranger hoping there is a default on the bond. It’s the same thing. Buying a life insurance policy on a stranger could hasten the stranger’s death, accidentally that is!! Same with a bond insurance policy. The person holding the policy may try to force a default on the bond to collect the insurance…accidentally that is!! And that's what really happened!!!!

No naked short selling. That means I sell a stock that I don’t own betting I will be able to buy the stock cheaper when I have to actually produce the certificate. It used to be the broker handling the sale would loan stock to people to do this. That still happens, but people now do it with no access to the stock, which causes the stock to fall in price.

Reinstate Glass-Steagall. I don’t want the bank that is giving me my mortgage and holding my money to be selling a CDI or CDS or any other alphabet security to Denmark…putting me, my money, and my home at risk.

Now some of the above sounds simple, and some of the above is complicated for many folks including myself. I will guaranty you this, finreg does nothing to address any of the above issues. So what is in those 2400 pages of new law and regulations? To quote Nancy Pelosi, we simply will have to pass the bill to see what's in it. And I don’t think we are going to like what we see.

The Coming Winter of Our Discontent

This was supposed to be the post partisan President. This was supposed to be the post racial President. Yet Barack Obama has polarized the country in ways not seen since the dark days of Richard Nixon and the Vietnam War. He has opened up racial wounds. He has used thuggery like all leftists do. He is using the courts to sue America’s citizens, like all leftists do. His surrogates are screaming racism in the various tea party movements while the only racist rhetoric I have heard have come from Black Panthers, black ministers, and the NAACP.

He has overwhelmed the system with leftist programs to the point people have stopped watching the news because they are shell shocked. Yet anger is seething beneath the surface, and it will erupt. You can’t govern against the will of the governed for long before there is a reaction. Just ask Richard Nixon.

Will the reaction be violent? Probably not, at least until after the fall election. But if a lame duck leftist Congress tries to ram through an ultra leftist agenda after the election and against the will of the people, I will guarantee you will see citizens storming the Capitol building, perhaps forming human barricades to prevent Congress from voting for any more Christmas Eve surprises like health care last year. America has had enough.

The shame is that real progress had been made in race relations in this country. African Americans, finally given access to the successful path of other immigrant groups, have followed that path through law enforcement, then into local politics, then into state politics, and finally into national politics. The liberal designated “Uncle Tom” blacks like Colin Powell, Clarence Thomas, Condoleezza Rice to name a few, blazed the trail for the first African American President, elected on bringing parties and races together. He fooled us, and fooled us good. His policies have been anything but, and have fostered racial hatred and renewed racial bigotry. He has managed to destroy years of racial progress by appealing to the most radical and extreme of the fringe left and the black community.

What did we think we were getting when we voted for this guy? He was surrounded by radicals and communists. He couldn’t last six months at his job on Wall Street. His sole experience was registering minorities to vote, a noble thing to do, but not sufficient background to President of the United States. While the press crucified Sarah Palin and her family for her lack of experience, they neglected to look at Obama’s lack of experience in anything at all. His reaction to the gulf oil spill is a shiny reflection of that lack of his incompetence.

No he is in danger of losing control of the House in the fall, and possibly the Senate. So rather than slow down and regroup, he has decided to push through his radical agenda on energy and immigration…notice that jobs aren’t in the mix. After all, we don’t need any more white construction jobs. He doesn’t care!!!

Supreme Court Justice Kennedy has taken direct aim at Obama by stating he will not retire until after the next presidential election. In other words, all that stuff Obama has been doing…will be facing that 5 – 4 conservative vote. It’s not nice to diss the Supreme Court in the State of Union Address.

The only remaining question is how much more damage can he do before he is subjected to an education on checks and balances. Not much I hope. On the other hand, if he goes nuts with a shoved through progressive agenda…this winter might be our winter of discontent.

President of the Minorities

It is becoming increasingly clear that Barack Obama has made a choice as to which America he represents as President. As the political heat mounts from more and more questionable policy decisions, he keeps running further to the left for cover. Unfortunately for him, and for the rest of us, the extreme left is never satisfied. Its demands are insatiable. His efforts to placate them will fail as he isolates himself more and more from centrist American politics.

People have criticized Presidents who have governed by polls, and that is probably a just criticism. But Obama actually seems to relish going against the polls. In health care, in immigration policy, in energy policy, in spending policy, in tax policy, in race relations policy…he continues to stick it up the majorities’ posterior. Since he is obviously tone deaf to where America is on the issues, who is he trying to please? And why does he enjoy it so much?

The answer is simple. He is an African colonial ideologue, with no particular allegiance to the United States other than the opportunity to punish it for his perception of America’s misdeeds. He is a minority president who has decided to ignore the class of citizens that have made this country great. His policies and actions have lost all semblance of being centrist. He doesn’t even pretend anymore. If the oil spill kills Louisiana, Mississippi, Alabama and Florida…so be it. They are a bunch of redneck white racists who are getting what they deserve. Those states won't vote for him anyway. And while he is at it, he can destroy the big bad oil companies in the process.

He doesn’t need any additional legislation to secure the borders. He has all he needs. He is choosing not to do it, holding enforcement hostage to “comprehensive immigration reform” which translates to amnesty. If more illegals flood into the country…so be it. That is more people he can give amnesty to, and America is too white anyway. He will sue Arizona from enforcing ID legislation that the rest of us have to abide by both here and abroad (try crossing from Canada into the United States without a passport) while letting sanctuary cities pass laws which fly in the face of the federal law.

His blatant misrepresentation of this monstrosity of a health care bill becomes more and more evident each day. He doesn’t care. His appointment to head Medicare has publicly stated he is for rationing of health care for seniors, and is an admirer of the British system. Try getting a hip replacement in Britain if you are over eighty. He is a scary dude. But middle class America has more than its fair share of the health care pie.

And as he goes merrily down the road with his radical leftist agenda (the purpose of NASA is outreach to the Muslims?), he is destroying our currency and loading the country up with debt…like someone with a stolen credit card. Don’t interrupt his golf games, his concerts, his travel plans and his parties. Nero is fiddling while Rome burns…and loving it.

The fall elections are the most important elections in our lifetime. Unless some checks and balances are put into place, we are in big trouble. The damage will be irreparable, and country will be asking 10 years from now…what happened? Look at what he is doing. Enough!!