Modern Day Mutually Assured Destruction

Before the most recent report on Lehman Brothers’ use of Enron-like methods to hide debt from its balance sheet, Greece had recently been accused of similar shenangians.  The sovereign was under scrutiny for swaps it had set up with Goldman Sachs that allowed the nation to mask its real debt load, effectively cooking its books in order to meet the fiscal standards required for admittance into the Eurozone in 2001.  This was not the first time this type of deceptive transaction had been consummated.

The joyfully iconoclastic financial blog Zero Hedge had uncovered a little-known 2001 report by a little-known Italian Economist named Gustavo Piga which showed that Italy had used almost the exact same transactions as those used by the Greeks to mask their finances and gain entrance to the Eurozone in 1997.  For his courageous exposé, most disturbingly Piga’s life was threatened.  Why was this the case?

Piga had been the first to find “…a real-world example of how sovereign borrowers can use derivatives to window-dress public accounts as a means of achieving short-term political goals.”  As the Council on Foreign Relations which collaborated with Piga on the report noted, Italy was able to do this by “taking a cash advance in 1997 against an expected foreign exchange profit in 1998.  Under accounting rules, this is simply impermissible.  Borrowers cannot use loans to anticipate capital gains on a bond.”  The transactions allowed Italy to artifically reduce their deficit in 1997 by increasing their deficit in 1998.

And according to the CFR, what was the significance of this Enron-like Italian book-cooking?

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Tags: alexander hamilton, Andrew Jackson, bailouts, banking, debt
Posted Mar 17th 2010 at 5:31 am in Congress, Economics, News, Obama, Politics, federal spending | 9025047 Commentshttp://biggovernment.com/amellon/2010/03/17/modern-day-mutually-assured-destruction/Modern+Day+Mutually+Assured+Destruction2010-03-17+12%3A31%3A31Andrew+Mellon

Financial Regulation, Health Care, and Could Insurers Demand the Next Bailout?

It’s time for your weekly dose of Coffee and Markets, featuring The New Ledger’s Francis Cianfrocca, a podcast brought to you by the fine folks at Andrew Breitbart’s BigGovernment.com and LibertyPundits.com, your home for conservative podcasts. In this week’s edition, we’ll talk about the fallout from a failed attempt by Senators Dodd and Corker to make new financial regulations bipartisan, the latest activity on the bond markets, and what’s next for Obamacare.

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Related Links:

TNL: Obamacare’s Two Americas
Frum: Will Health Reform Cause the Next Bailout?
The Hill: No Votes on HCR Pile Up
HCN: Democrats Consider Drastic Moves to Pass Health Care Bill
T-Shirt: Lobby the Rahm Emanuel Way

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Tags: bailouts, Bob Corker, Chris Dodd, Coffee and Markets, financial regulations
Posted Mar 12th 2010 at 9:14 am in Coffee and Markets | 881105 Commentshttp://biggovernment.com/newledger/2010/03/12/financial-regulation-health-care-and-could-insurers-demand-the-next-bailout/Financial+Regulation%2C+Health+Care%2C+and+Could+Insurers+Demand+the+Next+Bailout%3F2010-03-12+17%3A14%3A37The+New+Ledger

The Day Everything Changed

Today, in 2009, CNBC commentator Rick Santelli gave voice to the frustrations and anger of millions of Americans. Movements need countless variables. But, most importantly, they need a spark.

To Mr. Santelli we say, “Happy Anniversary!”

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Tags: bailouts, mortgage bailout, Rick Santelli
Posted Feb 19th 2010 at 6:31 pm in Culture, Tea Party | 77570166 Commentshttp://biggovernment.com/publius/2010/02/19/the-day-everything-changed/The+Day+Everything+Changed2010-02-20+02%3A31%3A34Publius

The Folly of Financial Reform

I come bearing bad news.  Reform of our financial services industry is going to be a failure.  Leave aside the preconceived notions that politicians will come up with faulty or halfhearted regulations, that they are writing bills in cahoots with the big banks or conversely ACORN & Co. or that the Obama administration in general is anti-business.

While these ideas may all have merit, the reason that financial reform will be disastrous is that all legislation points towards dealing with symptoms rather than addressing the root causes of our financial collapse. While of course the narrative in the MSM centers on greedy “fat cat” bankers taking big risks and predatory lenders taking advantage of hapless borrowers, the fact of the matter is that in every aspect of this crisis government was the major enabler.  Ironically all financial reform centers around giving government more power.

Consider housing.  As we know, under the CRA and due to the “activities” of ACORN and subsidization from our taxpayer-owned siblings Fannie and Freddie, banks granted mortgages to borrowers far riskier than they would have in an uninhibited mortgage market.  That one of the innovations to meet the demand for mortgages was, for example, the adjustable-rate mortgage which reset to sky-high rates after a specified amount of time was not predatory but rather the natural way for banks to compensate for the massive incremental risk being taken by lending to uncreditworthy borrowers.

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Tags: ACORN, bailouts, Barney Frank, Chris Dodd, CRA
Posted Feb 13th 2010 at 8:16 am in ACORN, Congress, Economics, Politics | 7435880 Commentshttp://biggovernment.com/amellon/2010/02/13/the-folly-of-financial-reform/The+Folly+of+Financial+Reform2010-02-13+16%3A16%3A35Andrew+Mellon

The Return of Bernanke and Obama’s Incomprehensible SOTU

It’s time for your weekly dose of markets and politics with Coffee and Markets, our podcast from The New Ledger with Francis Cianfrocca, brought to you by BigGovernment.com.

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Related Links:

Yousefzadeh: A State of the Union in Contradiction

Domenech: The Speech Obama Didn’t Give

Morrissey: Ryan Reintroducing Health Care Reform

Samuelson: Bernanke Must Rebuild Confidence

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Tags: bailouts, Barack Obama, Ben Bernanke, Markets, podcast
Posted Jan 29th 2010 at 9:29 am in Coffee and Markets | 6700616 Commentshttp://biggovernment.com/newledger/2010/01/29/the-return-of-bernanke-and-obamas-incomprehensible-sotu/The+Return+of+Bernanke+and+Obama%27s+Incomprehensible+SOTU2010-01-29+17%3A29%3A41The+New+Ledger

SEIU’s Secret Weapon: If Obama’s Plan Fails, Brandish the Shareholder Resolution

We saw their fury throughout 2009:  “Capitalism is Dead”, “Kill the Corporation”, “Bust Up Big Banks”, “Greed Kills”, “Bank of America, Bad for America”.  The Service Employees International Union (SEIU) led an all-out assault on Wall Street – and on capitalism and corporations – coining words and phrases that have since become common staples in the vocabulary of the bank-bashing craze.  That fury hit a fever pitch last March when word of the AIG bonuses went public.  It was the SEIU out in front of the protests, at AIG offices, and bussing protestors to the homes of AIG executives.

The months that followed saw more of the same.  In April, SEIU hailed the ousting of General Motors CEO Rick Wagoner.  That same week, it stepped up its battleplan with the Mother of all Corporate Campaigns against Ken Lewis, Bank of America CEO and Chairman – complete with videos, rolling billboards, smear sites, petition drives, letter campaigns, media blitzes and more, while it placed equal attention on Bank of America, forcing the company to respond with a $40 million image boosting campaign of television and print ads.

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Tags: ACORN, AIG, Andy Stern, bailouts, Bank of America
Posted Jan 27th 2010 at 12:43 pm in ACORN, Big Labor | 65850102 Commentshttp://biggovernment.com/libertychick/2010/01/27/seius-secret-weapon-if-obamas-plan-fails-brandish-the-shareholder-resolution/SEIU%E2%80%99s+Secret+Weapon%3A+If+Obama%E2%80%99s+Plan+Fails%2C+Brandish+the+Shareholder+Resolution2010-01-27+20%3A43%3A59Liberty+Chick

Obama: ‘Break Out Your Pitchforks And Head For The Banks!’

The government, starving for streams of revenue, wants to tax major banking institutions under a new regulatory scheme allegedly geared toward reforming the financial industry.

Yesterday (Thursday), President Obama launched a major salvo in his Progressive agenda for (Marxist) reform. Below is a brief excerpt of his statement announcing new banking restrictions, and it’s laced with vilifying rhetoric – complete with threats of pitchforks.

This is criminally brilliant.

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Tags: bailouts, Evil Bankers, Pitchfork Brigade, President Barack Hussein Obama, TARP
Posted Jan 22nd 2010 at 6:31 am in Economics, Obama | 63830175 Commentshttp://biggovernment.com/amarcus/2010/01/22/obama-break-out-your-pitchforks-and-head-for-the-banks/Obama%3A+%27Break+Out+Your+Pitchforks+And+Head+For+The+Banks%21%272010-01-22+14%3A31%3A12Andrew++Marcus

Three Reasons Why Obama and The Dems Are in Big, Big Trouble.

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Tags: Afghan War, bailouts, Bill Clinton, Dennis Hastert, federal stimulus
Posted Jan 20th 2010 at 3:32 pm in Congress, Defense, Economics, Healthcare, Obama, Politics, federal spending | 62842207 Commentshttp://biggovernment.com/ngillespie/2010/01/20/three-reasons-why-obama-and-the-dems-are-in-big-big-trouble/Three+Reasons+Why+Obama+and+The+Dems+Are+in+Big%2C+Big+Trouble.2010-01-20+23%3A32%3A36Nick+Gillespie

Obama Completes the Liberal Hat Trick

In hockey, rough sport that it is, it is rare that one player scores three goals in one game.  They call that a Hat Trick.  In the game of politics, Obama now has managed the Liberal Hat Trick in the minds of the American Public.  In November, he may just find out how rough politics can be.

Of course, many people have known for a long time just how liberal Obama is and was.  There were many warning signs in the last election cycle.  The public however, in this slightly Right of Center nation, either was so tired of ineffective Republicans or, with the help of the Media, refused to acknowledge the warning signs.  In doing so they elected Obama with 52.9% of the vote – a victory but not an overwhelming victory.

Large margin or not, since being inaugurated, Obama has run quickly to the Left. In doing so, he fulfilled Reagan’s warning that Democrat Presidential candidates run as moderates but are determined to govern more to the Left, i.e. Jimmy Carter and Bill Clinton.  The Obama Administration’s response to the terrorist bomb attempt in Detroit completed that process in the minds of the American public.

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Tags: auto bailouts, bailouts, Barack Obama, bush tax cuts, Christmas terror attack
Posted Jan 4th 2010 at 6:58 am in Big Labor, Congress, News, Obama, Politics | 54938103 Commentshttp://biggovernment.com/tdelbeccaro/2010/01/04/obamas-completes-the-liberal-hat-trick/Obama+Completes+the+Liberal+Hat+Trick2010-01-04+14%3A58%3A19Thomas+Del+Beccaro

Let’s Be Frank, Mr. Vice President: The Stimulus Failed

Today, the State of Georgia welcomes Vice President Joe Biden for an update on the administration’s so-called stimulus bill. With national unemployment sitting today at 10%, and worse in Georgia, the White House’s credibility on stimulus success is dubious at best. Yet as proper manners would dictate, we owe the Vice President an opportunity to make his case.

President Obama tapped Mr. Biden to oversee the stimulus program because, as he put it, “nobody messes with Joe.”  While that may be so, as the Vice President has been traveling around the nation touting the various spending priorities of the stimulus bill, their alleged benefits have yet to materialize into jobs.  So if the Vice President is visiting to have us believe expanding broadband is how jobs are created or that we can “weatherize” our way back to prosperity, it may be Joe who is messing with Georgia.

It’s actually quite telling that the Vice President is visiting us to discuss the stimulus package on the same day that President Obama is setting off for Copenhagen to promote a job-killing National Energy Tax as a means to combat global warming. Because what was evident in the stimulus package, and has been reinforced through subsequent actions, is that this administration places a higher premium on its social goals than on putting people back to work.

(more…)

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Tags: Al Gore, bailouts, economic growth, federal budget deficit, federal debt ceiling
Posted Dec 17th 2009 at 5:29 am in Congress, Economics, Featured Story, Obama | 4789852 Commentshttp://biggovernment.com/tprice/2009/12/17/lets-be-frank-mr-vice-president-the-stimulus-hasnt-worked/Let%27s+Be+Frank%2C+Mr.+Vice+President%3A+The+Stimulus+Failed2009-12-17+13%3A29%3A11Rep.+Tom+Price+%28R-GA%29

Bleak: Our Long Term Financial Outlook

While Nancy Pelosi is excited that health care reform is only going to cost us $900 billion over ten years,  I wonder how we are going to get out of the current fiscal mess we’re in. Seriously. The GAO has a new report on how our long term financial situation is going to look like. A short sample:

“The federal budget deficit soared to a record $1.4 trillion in the fiscal year that ended in September, a chasm of red ink unequaled in the postwar era that threatens to complicate the most ambitious goals of the Obama administration, including plans for fresh spending to create jobs and spur economic recovery.

Still, the figure represents a significant improvement over the darkest deficit projections, which had been as much as $400 billion higher earlier this year, when the economy was wallowing in recession. Since then, the outlook has brightened and a government bailout has successfully stabilized the nation’s troubled financial sector. In a report released Friday, Treasury Department officials said the government had spent $132 billion less than expected in August, due primarily to a drop in anticipated spending on the banking bailout.”

You’ve got to love the “the glass is half-full” outlook of the GAO!

And yet, they do show that without social security and Medicare-Medicaid reforms things will get much much worse and fast.

Check out the charts in the report, they will stop you from having kids.

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Tags: bailouts, GAO, health care reform, Medicaid reform, medicare reform
Posted Oct 22nd 2009 at 7:20 am in Congress, Politics | 1891415 Commentshttp://biggovernment.com/vderugy/2009/10/22/bleak-our-long-term-financial-outlook/Bleak%3A+Our+Long+Term+Financial+Outlook2009-10-22+14%3A20%3A19Veronique++de+Rugy

Palin the Libertarian?

From New York Times today:

Sarah Palin, in what was billed as her first speech overseas, spoke on Wednesday to Asian bankers, investors and fund managers.

A number of people who heard the speech in a packed hotel ballroom, which was closed to the media, said Mrs. Palin spoke from notes for 90 minutes and that she was articulate, well-prepared and even compelling.

“The speech was wide-ranging, very balanced, and she beat all expectations,” said Doug A. Coulter, head of private equity in the Asia-Pacific region for LGT Capital Partners.

“She didn’t sound at all like a far-right-wing conservative. She seemed to be positioning herself as a libertarian or a small-c conservative,” he said, adding that she mentioned both Ronald Reagan and Margaret Thatcher. “She brought up both those names.”

Read the whole thing here.

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Tags: bailouts, Margaret Thatcher, President Obama, Ronald Reagan, Sarah Palin
Posted Sep 23rd 2009 at 6:40 am in News, Obama, Politics | 6954120 Commentshttp://biggovernment.com/publius/2009/09/23/palin-the-libertarian/Palin+the+Libertarian%3F2009-09-23+13%3A40%3A03Publius