From BloombergNews:

On the morning of July 21, before the Eton Park meeting, Paulson had spoken to New York Times reporters and editors, according to his Treasury Department schedule. A Times article the next day said the Federal Reserve and the Office of the Comptroller of the Currency were inspecting Fannie and Freddie’s books and cited Paulson as saying he expected their examination would give a signal of confidence to the markets.

A Different Message

At the Eton Park meeting, he sent a different message, according to a fund manager who attended. Over sandwiches and pasta salad, he delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge- fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc. (GS), of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

After a perfunctory discussion of the market turmoil, the fund manager says, the discussion turned to Fannie Mae and Freddie Mac. Paulson said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” — a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.

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So Elmer Fudd Barney Frank announced yesterday that he would not be running for re-election in 2012.  His stated reason was that his district was gerrymandered, which is true.  But Frank was no longer safe in a  safe-district. Remember it took a last-minute infusion of DNCC money to save Barney Frank in 2010 and even then, his 54% of the vote was the lowest he had ever received since his first election in 1980. Frank is retiring because he is chicken, he almost lost last time, and doesn’t have the guts to try again.

In his 31+ years in the House of Representatives Frank was always there to remind people why term limits should be added to the constitution. Be it the brothel that was operated out of his house, his lover that worked for Freddie Mac which led to his unbridled support of Fannie and Freddie which helped cause the housing bubble and great recession, his progressive stances which would make the most avid socialist proud, or that unexplained arrogance (he has nothing to be arrogant about).

Today is a good day for America because Barney Frank’s days in Congress are numbered, to understand why he was so bad for the country, I put together this video “tribute.”

In the video below Frank sits in a 9/10/03 House Financial Services Committee hearing and says Fannie and Freddie are sound, and there is no housing disaster coming.

Rep. Barney Frank (D., Mass.): I worry, frankly, that there’s a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios.

Here Congressman Fudd Frank stood up on the floor of the House of Representatives and told America that there is undue concern about the housing market and even though prices were growing very quickly the housing market is not like the Dot.Com industry, the housing bubble will not burst.

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Brian Domitrovic author of a new paper published at The Laffer Center entitled, The Secret Term in the Fed’s Triple Mandate. We’ll discuss how Ben Bernanke’s Federal Reserve stacks up against those of the past, the role they’ve played in today’s stagnant economy, and how a shift of their policy could help push us out of the Great Recession.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

The Secret Term in the Fed’s Triple Mandate: A Critical History
Buy Brian’s book Econoclasts: The Rebels Who Sparked the Supply-Side Revolution and Restored American Prosperity on Amazon
Elastic Currency, With a Vengeance
Brian Domitrovic’s writings at Forbes
Brian Domitrovic at The Laffer Center

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It’s simply hard to imagine this passes for a Presidency.  At what point does he become simply too much for the senses?  Sure we have had some interesting and bad Presidents before – recently in fact.  Nixon changed our view of the Presidency for the worse.  Carter was beyond ineffectual.  Bush 41 broke a huge promise. Clinton wagged his finger while lying – and a bit more than that.  But this President is truly something and it’s not just the facts that are bad – it’s his excuses and manners that make this Presidency so incredibly bad.

Let us count the ways:

A.  The Economics.

This list is well known by now – but that doesn’t mean it is highlighted by the Media as it would be of a Republican was president.

1. Unemployment at 9% for a historically long time.  According to Obama he inherited this mess and blames President Bush and ATMs.  Yes Obama believes automation, like ATMs, is to blame – as if such automations like automobiles (accounting for nearly 20% of our economy) and computers (creating employers like EBAY and Microsoft)  are the cause of our unemployment.  Beyond that, Obama joked that he was wrong about “shovel ready” projects, created the “Saved” jobs category out of thin air, and claimed that the stimulus bill would prevent unemployment from going above 8%.  What’s missing, of course, is a plan to lower unemployment – let alone actually lower unemployment.
2. Gas Prices.  They are currently 85% higher than when he took office.  He shut down our Gulf oil production for ideological not actual reasons and delayed a Canadian pipeline for political reasons.  When Bush 43 saw high gas prices, the Media told him to go his friends in the Middle East to ask them to raise production.  Since Obama wanted $5 gasoline all along, he has no plan to lower energy prices and the Media doesn’t harp on the issue.  Meanwhile the economy is hurt badly because of the higher costs of energy that reduce purchasing power and hurt employers everywhere.
3. Foreclosure/Home Mortgage Crisis.  This is the one part of the economy that actually is in a crisis that is “the worst since the Great Depression” – a phrase Obama is fond of overusing.  Obama has continued the policy of bailing out the Banks for foreclosure related losses, encouraged Fannie Mae and Freddie Mac bailouts instead of reforming them and now he has sued the very Banks he bailed out because of their foreclosure practices – and no, there is no plan in sight let alone true relief.
4. The Deficit.  It has quadrupled under Obama.  Yet he says inherited it – and rather than change it, spending has actually gone up each of this 3 years.  Obama’s solution: have other people come up with a plan – he was traveling or on vacation. When it failed, he said he knew it would fail.  So Chris Christie rightfully asks:  What are we paying Obama for?

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You may be aware of this week’s NLRB showdown, where two Democratic Members of the National Labor Relations Board will try on Tuesday to overhaul rules governing 6 million workplaces and about 100 million working Americans to make it easier for union bosses to organize new members. The consequences are serious: employees will get less information about what they’re signing up for and employers will have less chance to talk to their workers. The unelected bureaucrats say they’re helping employees, but really it’s just to help the big political spenders from Big Labor. But you can help stop this farce!

While the Obama administration doesn’t seem to want to listen to small business owners, other leaders in D.C. will get the message. So sign a petition to top national leaders via Halt The Assault or contact your Member of Congress to support commonsense legislation to make the playing field fair once again (Americans For Prosperity’s site can help if you wish to support the Workforce Democracy and Fairness Act).

Bloggers can do even more by embedding a petition code into their site.

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NESHAMINY, Pa. – Some well-meaning people still cling to the notion that teachers union collective bargaining is healthy for public schools.

We invite them to visit Neshaminy, Pennsylvania, or at least do some research on the three-year labor standoff that has been tearing the school district and community to shreds.

Neshaminy teachers are among the most highly compensated in the state, with above-average salaries, generous insurance and retirement benefits. Their last contract expired in 2008, and they haven’t been able to negotiate a new one because the school board, battling financial problems brought on by the recession, can no longer afford extravagant compensation.

The teachers union has responded with ugly tactics, including a threat to strike and a decision to “work to contract,” which is a nice term for a general work slowdown. The community has reacted with anger toward the union’s self-serving demands, and the Philadelphia suburb has been poisoned with an environment of anger and mistrust.

“What started as a skirmish a few years ago has become an all-out war, precipitated by union misinformation, deception and malice,” one citizen wrote to a local newspaper. “In this two-sided war between an intransigent teachers union and suffering taxpayers/parents/students, there can be no sitting on the fence; we’ve advanced too far for that.

“Everyone should take a stand for what they believe in.”

Spoiled union avoiding concessions

Let’s start with a few facts:

The Neshaminy school district, like most across the nation, is facing dire financial problems. It has closed two school buildings in recent years, laid off more than 60 employees and cut several student programs, in an effort to keep up with runaway labor costs.

The Neshaminy Federation of Teachers has been working under the terms of an expired collective bargaining agreement for the past three school years. Those terms are very generous indeed.

The 675 teachers on staff are the second highest paid in the state, with an average salary of $81,816. Teachers have never had to contribute a dime toward health insurance premiums for themselves and their families. Teachers receive longevity bonuses, reimbursement for unused sick days, as well as a $27,500 cash bonus and full health coverage upon retirement.

The school board has made it very clear that the district can no longer afford lucrative labor expenses during the current economic crisis. Still, it has offered contract terms that would be considered generous in many school districts across the nation.

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Bill Ayers recently appeared before a group of activist teachers to encourage them to keep up the fight.  He told them about the assistance he provided in getting the very radical Bob Peterson elected president of the Milwaukee Teachers Education Association.

Hoping to wow his friendly audience, he also gushed about another leader he helped.

Ayers admitted he hosted a fundraiser at his home for Barack Obama in the 1990s.  “I thought he wanted to be mayor of Chicago – that’s the limit of my imagination,” he told the audience in a video released exclusively by Education Action Group.

This is likely the first time Ayers has been caught on tape discussing his connection to Obama.  Their relationship has been routinely been downplayed by Ayers, Obama and his associates, since the national media took a glancing look into their ties during the 2008 presidential campaign.

Ayers’ impact on America cannot be underestimated.  While many have exposed and condemned his leadership in the radical and violent Weather Underground – and the group’s efforts to terrorize the country in the 1960s and ’70s – he has done far more damage to our students’ minds.

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Two weeks ago, Andrew Breitbart called me and laughingly told me that he had just boarded a plane and wanted me to guess who he had passed in first class as he made his way to his coach seat.

I immediately guessed that it was someone who publicly stands in “solidarity” with “the 99%” as he or she sips chardonnay in seats only the 1% can typically afford. It turned out to be Jodie Evans, co-founder of Code Pink, enjoying the good life.

Andrew and I shared a laugh as we agreed that the ironic pattern of wealthy liberals critiquing “the rich” while simultaneously living high on the hog was just too rich in itself.

And Andrew wondered aloud how someone who flies coach, as he travels multiple times a week, gets attacked as a rich and uncaring capitalist, while someone like Jodie Evans can fly first class and still relish her undying support from lefties.

Sadly, I both comprehend the answer and have experienced such moments of clear contradiction–with Jodie Evans herself.

Years ago, I was asked by anarchist Lisa Fithian to help her shut down the 2004 Halliburton shareholders’ meeting. She dispatched me and another young activist to go to the intended site of the meeting, specifically the Four Seasons Hotel in Houston. We followed our directions and scoped out the entrances and exits. We mapped out every possible way to shut the program down and to prevent access to the building or meeting room.

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Today, in 1972, Atari released Pong video game, the first commercially successful video game. Yes, we actually played it at the time. How lame are we?

Desperation is setting in at the White House and the white knight attempting to rescue Obama from himself is the NLRB, guided by a pair of Obama recess appointees Craig Becker and Mark Pierce (see National Labor Relations Board or NBLR – National Big Labor Resuscitation ). Becker and Pierce are taking steps to achieve Big Labor’s most coveted prize, card check (see Card Check through Regulation vs. Legislation).

The NLRB has scheduled a vote this Wednesday, November 30, 2011 where they Plan to Ease Way for Unions to rapidly organize employers through quickie elections. This vote is no more than “Card Check” in disguise (see the Board published a Notice of Proposed Rulemaking here). Why is this pair in such a hurry? Member Becker’s term expires at the end of December 2011, and this is the last time the rogue NLRB is guaranteed to have a democratic majority to combat the pending legislation to reign in the NLRB and to pass regulations that favor Big Labor (see Workplace Fairness Act Set to Move to the House Floor).

Just as important, the timeline referred to above is obviously a blatant move to provide big labor with the tools to rapidly force unionize unsuspecting businesses in order to provide Obama and the Democratic party a huge campaign fund source derived from the new influx of membership dues just in time for the 2012 elections. This is obviously a simple “pay to play” maneuver that will be A Death Penalty for Employees and Employers.

This is a classic case of Political Aspirations & Payback Ahead of American Jobs, because this President and the rogue NLRB are intent on Overwhelming the System in order to achieve their labor agenda, first pronounced in the Employee Free Choice Act (see EFCA Through the Backdoor). (more…)

Two weeks after the Richmond Tea Party delivered an invoice to Richmond Mayor Dwight Jones for costs incurred for previous rallies, we received a letter from the City of Richmond formally stating that the city is auditing our Tea Party. Coincidence? This audit is an obvious attempt to intimidate and harass us for standing up against the unfair treatment and discrimination against our Tea Party.

First some back story: as reported on the front page of the Richmond Times Dispatch, the Richmond Tea Party delivered an invoice for charges incurred in our previous three Tax Day rallies at Kanawha Plaza because Mayor Jones chose to allow Occupy Richmond protesters to convene in the same park for two weeks.

The Mayor not only allowed the Occupiers to break the law, but he visited them in the city-owned park. “Jones said that as a ‘child of civil rights’ and protests, he had allowed the group to remain in the park but understands his mayoral responsibility to uphold laws of the city,” reported the Richmond Times Dispatch.

Apparently his mayoral duties included preferential treatment for a group he sympathizes with ideologically at the expense of the taxpayers.

The blog Virginia Right reported that the city provided services such as portable toilets, trash pickup, etc. The incomplete invoices obtained from the city totaled $7,000. This was only a portion of the actual costs to taxpayers because the costs of police, helicopter and incarcerations were not included. Also not accounted for was the 24-hour police protection of the Mayor’s home after the Occupiers moved their camp next door to the Mayor’s house. The Richmond Tea Party, conversely, paid for all services for our rallies, including the police, portable toilets, park fees and permits, amounting to approximately $8,500.

Our actions apparently struck a nerve. Our invoice to the Mayor was covered by hundreds of news outlets, including the AP, Richmond Times Dispatch, Baltimore Sun, and the Washington Post. On October 31, I appeared on Fox Business, Neil Cavuto’s show, and was interviewed about our actions. Reportedly, at least two Richmond City Council members agreed with our plight. “I guess we’ll be writing a check to the Tea Party people,” said Councilman Bruce W. Tyler, as quoted in the Richmond Times Dispatch. “You can’t treat one group different from the other. It’s unfair.” (more…)

Rep. Barney Frank (D-MA) announced today that he will retire from Congress at the end of his term. Frank cited a series of scandals as his reasons for leaving–from the prostitution ring that ran from his apartment in the late 1980s; to his role in placing his then-boyfriend in a job at government-backed mortgage giant Fannie Mae in the 1990s, while Frank was on the House Financial Services Committee; to new questions raised today about Frank’s potential involvement in the unfolding insider trading scandal in Congress.

Frank finally apologized for his role in the housing bubble that led to the financial crisis of 2007-8 and set the stage for the worst recession since the Great Depression. Frank had shielded Fannie Mae and Freddie Mac from regulation, which in turn encouraged banks and buyers to embrace unstable mortgages. These were repackaged and sold as securities whose instability was masked due to their implicit government guarantees.

That’s not actually what happened today, though it is what should have happened long ago. Instead, Frank is retiring because he barely survived a tough challenge by Sean Bielat in the 2010 elections, because redistricting will make it harder for him to hold onto his seat, and because he cannot foresee Democrats re-taking the House. The road ahead is rough, and Frank believes he has better–perhaps more lucrative–things to do.

I am not celebrating Frank’s departure–partly because it is long overdue, partly because it would have been more satisfying to see him defeated, and partly because he is somewhat responsible for launching my political career in an exchange that went viral on YouTube:

As I recalled in Jonah Goldberg’s anthology, Proud to Be Right (HarperCollins 2010): (more…)

From The Hill:

Supercommittee member Sen. Pat Toomey (R-Pa.) accused Democrats on Monday of torpedoing the deficit supercommittee because a success would have “stepped on” President Obama’s campaign narrative.

Speaking Monday on CNBC’s “Squawk Box,” Toomey said there’s “something to” suggestions that Democrats had an incentive to see the supercommittee fail.

“That goes to the asymmetry of the incentives and I think there was something to that,” Toomey said. “The president’s fundamental campaign message was to run against Congress — never mind the fact that half of Congress is controlled by the Democrats, but that’s his purpose, and certainly an agreement in this committee would have stepped on that narrative for the president.”

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After almost a year of litigation, Bloomberg finally won access to information detailing the full scope of the Fed’s bailout of the banks. The chart below, detailing the daily amounts MorganStanley was borrowing from the Fed, relative to its market value should keep European officials awake at night:

Ladies and Gentlemen, this is what a lender of last resort looks like. What you’re looking at here are three lines. The black line is Morgan Stanley’s market capitalization, which tends to hover in the $40 billion range but which fell as low as $9.8 billion in November 2008. The orange line is the amount that Morgan Stanley owed to the Federal Reserve on any given day — an amount which peaked at $107 billion on September 29, 2008. And the red line is the ratio between the two: Morgan Stanley’s debt to the Federal Reserve, expressed as a percentage of its market value. That ratio, it turns out, peaked at some point in October, at somewhere north of 750%.

The lack of transparency here is bad enough, let alone the $13 billion figure.

Secret Fed Loans Gave Banks Undisclosed $13B

And it isn’t only the U.S. bailing and re-bailing itself out.

If you’re looking for some good Euro-scare meat, look no further than this column from the FT’s Wolfgang Münchau. The basic gist: No really, now we’re getting into endgame. Why now? Because the increase in core yields, the failure of that German bund auction, and the increase in Spanish and Italian short-term yields, as well as the tightening of money for the banks, means it’s all almost over unless Europe immediately cooks up some kind of ECB-backed/Eurobond/fiscal union concoction.

Enter the IMF.

IMF drawing up £500bn package to save Italy, Spain and the euro

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On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss Germany’s failed bond auction, calls for a more politically unified Europe, and the potential end of the Euro.

We’re brought to you as always by BigGovernment and Stephen Clouse and Associates. If you’d like to email us, you can do so at coffee[at]newledger.com. We hope you enjoy the show.

Related Links:

German Bond Sale Spurs Worries
Death Spiral in Euroland
Moody’s warns on eurozone debt
Germany, France eye euro zone pact, markets hopeful
How Brussels Stifles Democracy in Europe

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Government Motors has finally found its hottest car and the Chevy Volt is it. Unfortunately for Chevy, it isn’t because it is popular. It’s because the car seems to catch on fire a lot. Industry watchers are preparing for the Volt to undergo a recall to fix whatever problem the car’s lithium-ion battery pack has that seems to be causing the vehicles to spontaneously burst into flames.

Of course, this little catching on fire problem seems emblematic with everything about Government Motors. After President Barack Obama pumped $53 billion of our tax dollars into bailing out GM all we’ve gotten out of the deal so far is a stock tumble from $53 a share to under $25 (a $15 billion loss) and a badly selling “green” car that catches on fire every time you turn around. Such a deal.

As to the burning issue of the day, the Associated Press notes that an “investigation” has begun by the National Highway Traffic Safety Administration to determine why the cars are catching fire.

One Volt battery pack that was being closely monitored following a government crash test caught fire Thursday, the safety administration said in a statement. Another recently crash-tested battery emitted smoke and sparks, the statement said.

For its part, GM claims the cars are perfectly “safe.” Well, except for that whole catching on fire business, I suppose.

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WASHINGTON (AP) – Democratic Rep. Barney Frank of Massachusetts is expected to announce his retirement from Congress on Monday, closing out a career of more than three decades capped by passage last year of legislation imposing new regulations on Wall Street.

Frank’s office says he will hold a 1 p.m. news conference in Newton, Mass. to make the announcement.

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From BloombergNews:

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.

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LOS ANGELES (AP) – Police have arrested three people after ordering Occupy Los Angeles protesters to leave a downtown intersection.

The arrests came after hundreds of people gathered in the street after a deadline passed to vacate a City Hall park encampment.

Water bottles were thrown at officers as officers in riot gear started clearing 1st and Main streets just after 5 a.m. Monday.

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