OT: Why would Bush announce he is getting Libby out of jail time on a Monday afternoon right before July 4th? News releases are planned to be high or low profile.
Is he trying to get impeached before the shit hits the fan?
The only conclusion that could resonably be made here is that he is under the influence.
On another note, busy evening and very interesting for those that are following the state of the credit markets and potential implications of current events-
Paulson is an embarrassment to everyone but those in the current administration. The administration are ALL shameless and most are incompetent so they either don't give a damn or can't tell. I don't know which is worse.
Maybe Paulson is going to "commute" the housing bust.
Clover goes to the gable wall and brings Benjamin with her. She asks Benjamin to read for her what is on the gable wall. All the commandments are gone, and all that is written there now is All animals are equal, But some animals are more equal than others.
I think I'll also have that drink, dryfly, make mine a large Irish, neat.
From an article by Richard Ben-Veniste, a member of the Watergate Task Force, on Ford's decision to pardon Nixon. I think it speaks fairly forthrightly on the dangling question perils of early pardon for government officials. As the old saying goes, sunlight is the best disinfectant.
"Upon taking office as president, Gerald Ford gave reason to believe that any decision regarding a pardon for his predecessor would be made carefully and deliberately. Nineteen days after taking the oath of office, he responded to a press inquiry about a possible Nixon pardon, saying that until any legal process was undertaken it would be 'unwise and untimely for me to make any commitment,' adding that 'until the matter reaches me, I am not going to make any comment during the process of whatever charges are made.'
Yet, only 11 days later, Ford reversed course."
...
"While I do not believe Ford was wrong to pardon Nixon, the timing of the pardon was premature ... pardoning Nixon without requiring at least an acknowledgment of responsibility for serious misconduct and for lying to the public left the door open for the spate of revisionist books and articles that followed the resignation."
...
"... In the end, Ford may have been correct in believing the facts would sort themselves out well enough. Yet, because Ford did not condition his pardon on a formal acknowledgment of culpability by Nixon, historians will have to go to the underlying evidence to make their judgments on Nixon's responsibility for the criminal conduct and constitutional transgressions that left him with the stark choice between resignation and certain removal from office."
"the commutation does nothing to prevent Libby from appealing his conviction. And if the appeal fails or is still in process at the end of Bush's term, there is nothing to prevent the President from granting Libby a full pardon before he leaves office."
MOT - "Why would Bush announce he is getting Libby out of jail time on a Monday afternoon right before July 4th? News releases are planned to be high or low profile."
Various commentators I've read have repeatedly made the point that Dubya has lived, died, and governed by narrow-base politics. I think this was aimed at his base and conservative talk radio listeners. They've been clamoring for him to do this and he needs a boost from the immigration debacle.
Ah come on people, Paulson was a super shill for Haul Street and now he's a Hill Shill for Washington Mall Street. What do you expect him to say, "The futures market indicates housing prices will continue to correct (read FALL) for the next five years so get used to it." I don't think so Tim. PS: to Tanta, I thought you were cool before Saturday's Pigs On The Wing, now I know you are. Go Pink. Hey, and I'm 62.
July 2 (Bloomberg) -- Fannie Mae and Freddie Mac, the
largest sources of money for U.S. home loans, may lose as much as
$6.6 billion should defaults in subprime mortgages force write
downs on securities rated below AAA, said Karen Shaw Petrou,
managing partner at Federal Financial Analytics Inc.
Investments in such mortgage bonds totaled $12 billion at
Washington-based Fannie Mae and $10 billion at McLean, Virginia-
based Freddie Mac in May, according to Petrou. Subprime mortgage
defaults may require a write down of these assets of 15 percent
to 30 percent, she said.
Mortgage investors have been reeling this year as the worst
housing decline since the 1930s threatens the $6 trillion U.S.
mortgage bond market. Petrou's estimate challenges the view of
investors who predict Fannie Mae and Freddie Mac will weather a
rise in mortgage delinquencies because the firms primarily limit
themselves to investments in only the highest rated securities.
The government-chartered companies have significant risk
and the AAA alone don't protect them from it,'' said Petrou,
whose clients include FM Policy Focus, a lobbying group seeking
tougher federal oversight for the firms. Subprime-related losses
of $3.6 billion at Fannie Mae and $3 billion at Freddie Mac would
erode most of their reserves mandated by the Office of Federal
Housing Enterprise Oversight, she said.
Freddie Mac spokeswoman Sharon McHale called the loss
estimatesabsurd.''
Fannie Mae's private label holdings as of March 31 that were
rated below AAA were all in manufactured housing securities, on
which impairments have been taken, spokeswoman Janis Smith said.
The rest was in municipal bonds that weren't backed by subprime
mortgages. Almost all of the mortgage revenue bonds were AA rated
securities, Smith said.
``We do not own the asset types, collateralized debt
obligations, that were the basis of the liquidity pressure at the
institutions referenced in the report,'' Smith said.
Fannie Mae's surplus capital from Dec. 31 to the end of the
first quarter fell and is now 10.2 percent above the Ofheo-
required minimum, down from 10.9 percent. Freddie
Freddie Mac's surplus
is 5.9 percent above the requirement, down from 7.7 percent,
Ofheo said on June 28. Fannie Mae's surplus as of March 31 was
$3.9 billion, while Freddie Mac's was $2 billion.
Among Freddie Mac's holdings in non-AAA securities, $5
billion are mortgage revenue bonds that are rated AA and help the company fulfill its federal mission to promote homeownership
among low- and moderate-income homebuyers, McHale said. These are very mission-rich holdings for us,'' she said.
About $1 billion of the securities are related to
manufactured housing, with 97 percent of these holdings insured
to a level comparable to AAA, she said.
While declining to identify the remainder of the non-AAA
securities, McHale saidwe mark those holdings to market and we
have not seen any deterioration in credit.''
Defaults in subprime mortgages forced Bear Stearns last
month to provide $1.6 billion in credit lines to rescue one of
its hedge funds. Cambridge Place Investment Management LLP said
last week that it will close Caliber Global Investment Ltd., a
hedge fund that had $908 million of assets in March.
Fannie Mae and Freddie Mac, created by Congress to increase
financing for homebuyers, own or guarantee about 40 percent of
the nation's $10.9 trillion residential mortgage market. The
companies channel money into the mortgage market by buying home
loans from lenders. They profit by holding mortgages and mortgage
bonds as investments and by charging a fee to guarantee and
package loans as securities.
Petrou declined to estimate the impact on Fannie Mae and
Freddie Mac from a writedown of subprime mortgage bonds, noting
that the U.S. Treasury has authority to buy $2.25 billion each of
their securities in the event of default.
It's unclear how much ``their implicit guarantee insulates
them to the market reaction'' to subprime losses, she said.
Congress, because of partisan disagreements, has failed to pass legislation creating a stronger regulator for Fannie Mae and
Freddie Mac since 2003, when the firms began to disclose a total
of $11.3 billion in accounting errors.
Various commentators I've read have repeatedly made the point that Dubya has lived, died, and governed by narrow-base politics. I think this was aimed at his base and conservative talk radio listeners. They've been clamoring for him to do this and he needs a boost from the immigration debacle.
Andrew - I think there is a lot more to it than that. From the comments (from 'joe') over at Angry Bear:
Commutation is even better than a pardon. With commutation Libby can still pursue an appeal. While appealing he can take the 5th amendment and avoid testifying before congress. An appeal could take a couple of years. If he had been pardoned, he could no longer take the 5th and could be compelled to answer questions under oath about Cheney.
Anyone who really believes the Bushies are as dumb as Bush plays out to be ought to have their own intelligence challenged. JMHO.
Yeah, but dryfly, why couldn't congress immunize his testimony at this point and then compel it? What is there to lose, if Bush has already commuted his sentence?
said Petrou, whose clients include FM Policy Focus, a lobbying group seeking tougher federal oversight for the firms.
fivewood - who are these guys and why do they care? Everyone has an angle, what's theirs?
Secondly - if you look at what would happen to Freddy & Fanny should AAA vaporize... what would happen to the 'private markets'... to credit in general? If Freddy and Fanny get burned, private markets get incinerated.
Mark Thoma at Economist's View has several major newspaper comments on the Libby commutation and the full text of Bush's written statement if anyone's curious.
And dc, I don't care what your politics are, you don't play beltway games with covert operatives or the cover organizations they use (and they blew the cover of a big front company I understand). That sort of stupidity gets people killed. The Administration had plenty of other ways to counter Joe Wilson's OpEd piece.
If you owe the bank $1,000,000, the bank own you. If you owe the bank $1,000,000,000,000, you own the bank.
Could this apply to the hedge funds' CDO mess. The bank/ administration would then take the natural path of covering it until they can't. The Enron cover up was almost sucessful, only to fail at the very last moment, just before the upsurge in energy price during the Iraqi war.
a) Supporting the dollar as it challenges 80 on the dollar index?
b) Supporting the homebuilders as they challenge a double bottom
c) Supporting CDO valuations
d) Just wanting to get on TV because his grandkids are coming over this weekend
e) all of the above
Yeah, but dryfly, why couldn't congress immunize his testimony at this point and then compel it? What is there to lose, if Bush has already commuted his sentence?
I thought the same thing but the only stick congress will hold over him now is contempt... and Bush can pardon that too, later, if Bush (Cheney) so decide. Again commutation now with promise of future pardon later if he behaves 'ices' him completely.
And having the $250K fines over his head (with implied promises of future speaking engagements to 'friendly audiences' again if he behaves) makes that 'potential punishment' less so, no?
The only way Libby sings is if he wants to sing - so far he hasn't had even the remotest intention of doing so.
These guys are NOT dummies. Anyone who suggests they are is kidding themselves.
Candyman, the Enron cover up was not almost successful - not by a long shot. It was a potemkin village from very early days and it was only a matter of time before the math of their business caught up with them. If it hadn't been November 2001, it would have been within a few months.
As we are seeing with Bear Stearns and others in subprime, you may be able to put off the inevitable for a quarter or two, but the facts own you at the end of the day.
BTW - Tanta, if I were the Dems, I'd do exactly as you suggest... subpoena Libby, force him to testify to congress under oath and make Bush pardon him sooner rather than later. Force the issue.
That is the ultimate of dirty politics - both ways - but at least the people get to see it for what it is. No naked emperors that way...
I can imagine what the Dem '08 candidates will say about this (off with his head)... What I'm dying to hear is what the GOP Class of '08 have to say, will they run from Bush & if so how far? Like Andrew said above, they got constituencies to worry about.
Wow. I might have to pow-wow with my ex federal prosecutor sister pretty soon.
Regardless, I think we can all assume sub-prime & hedgie news has been blown off the front page for a while.
Interesting commentary. The Bush crowd may not be stupid, but they haven't done real well for some reason. I guess lots of madmen are tactical geniuses...
It can often be the case Dan. A prime example is the Carthaginian General Hannibal. He was a tactical genius and won most of the battles against Rome, but lost the war. Not sure on the mad part though, tragic is the more likely.
Dryfly, thanks for the insights tonight, you and Tanta are wonderfully devious and untrusting of human nature. I need to hang around you guys more often, it's an education. However, also remind me not to sit down to a friendly game of poker with you.
I am so sick and tired of the BS lies, kool aid sucking up BS spin taking the populace as a bunch of blind, naive ignorant sheep. Paulson, Bernanke, Rove, Cheney, the whole god dam gov't. Libby Pardon is just another spit in the face and telling us to go like it and shut up. We tell you what to think. Don't challenge us, we're not accountable, we're above the law. What's it going to take to get honesty, integrity and somebody for once and for all to start telling the straight goods and not BS taking the population's intelligence for granted. Impeach Bush, fire Paulson, send Cheney to jail, charge so many with fraud there'll be hardly anybody left. Just sickening.
So Bush released a crony for political reasons. Not good, but nothing new.
First of all does Clinton set Bush's standards? Is he Bush's roll model? If so Bush should have alerted us to that in the elections.
Secondly, I'm no Clinton fan... however did any of those 'cronies' Clinton pardon or commute blow the whistle on a CIA operative? Any of the folks Clinton let skate have close ties INSIDE his administration? Close like Libby was close (i.e. inner circle)?
Bush has set a new low. So many of them it is hard to keep count.
I've said ever since 2001 that the best thing that ever happened to Bill Clinton is that he was sandwiched between Bushes. It was the only thing that made him look statesmanlike.
Clinton, Bush, Democrats, Republicans. Same pants, different pockets.
Exactly. Except in my estimation Bush is the worst of the lot - worst in my lifetime & that is saying a lot after Carter (nice guy, very bad president).
Remember to ask me that question again in 2-3 years I reserve the right to change my mind.
you know, i was reading this thread to see what people had to say about paulson.
and then i encountered zephyr, to whom i can only say: the sheer silliness of claiming that clinton's biggest strength was his ability to lie is only matched by the sheer stupidity of claiming that clinton's pardons have anything to do with this decision by bush, which constitutes prima facie evidence of obstruction of justice.
right-wing sickos who live on clinton hatred should at least have the decency to spread their crap all over right-wing blogs, not here at the intelligent gathering that calculated risk and tanta have put together.
I don't like Bush or Clinton. But not liking Clinton makes me a right wing sicko in Howard's coloring book...
So here I am, someone who has given thousands of dollars to Democratic candidates for house, senate and president, but because I dared to speak ill (but accurately) of Clinton (in the context of criticism of Bush) I become a right wing sicko...
I thought the same thing but the only stick congress will hold over him now is contempt... and Bush can pardon that too, later, if Bush (Cheney) so decide. Again commutation now with promise of future pardon later if he behaves 'ices' him completely.
That won't work. If Bush pardons Libby immediately, the Dems subpoena him again, cite him for contempt again, forcing Bush to pardon him again. This matter is a loser for Bush commuting the sentence once he might get away with. Pardoning a guy solely to keep him from testifying before Congress is a losing game. Really, they'll just claim executive privilege, and tie that up in the courts for a couple of years. That doesn't require a commutation instead of a pardon. This really was Bush trying to split hairs.
There's a consistent pattern that Democrats pardon people for money, while Republicans pardon themselves. I find the latter to be more corrosive of the system.
Dryfly however did any of those 'cronies' Clinton pardon or commute blow the whistle on a CIA operative?
It wasn't Libby. It was Richard Armitage. Libby was convicted of lying to the FBI and the grand jury. MSNBC article. I stopped following the whole thing once I found that out, so otherwise I don't have an opinion.
Back to the interesting question of why Paulson is spouting this stuff. On the one hand, it's pretty close to what the Fed has been saying. On the other hand, I wonder if he believes the Fed? I doubt it. I don't think even the Fed believes it any more. So he's probably just stepping up to the plate and taking the cheerleader role.
CME housing futures for May08 10-City Composite is down on settlement versus the April Case-Shiller Index 3.2%.... is that where the contract should be give the pending sales data?
About the only thing that makes Paulson's cheerleading interesting to me is that the consistent demotion (and eventual exclusion) of players like Paulson and his predecessors who were promised a seat at the policy table as part of the inducement to serve is that it provides further evidence (if such were needed) of the Bush/Cheney/Rove team's unwillingness or inability to accept new thinking or alteration of their world view.
It is like seeing an onion peeled back, layer by layer, the players fall away as the center hardens: Some, perhaps like our friend zephyr, claim all onions are alike and they were something other than onion skin anyway (which makes us wonder why our nose itches when they speak); others proudly proclaim their onion-ness but deny they came from THAT poor excuse for an onion over there; still others remain loyal to their root stock even as it shrivels.
But increasingly now we suspect there might actually not be a center at all, that when the last layer peels away, there will be nothing.
Such metaphoric excess aside (if marsupial mammals can be abused I see no reason to spare vegetables), not all political issues, or politicians for that matter, are equivalent; mere matters of opinion or personality. Some clearly give better service than others, improving the lot of the majority while avoiding oppression of a minority in the process. Frankly anyone who judges Bill Clinton and Dubya Bush equivalent based upon a capacity for mendacity or any other factor irrelevant to that essential service frankly doesn't know the difference between an onion and a rutabaga.
Dryfly, you are prescient my friend.. Mark Thoma over at Economist's view posted an LA times OpEd restating your rational for Bush keeping Libby on the leash with a commutation and not a full pardon. Yeesh.
...
"There was dispute, however, over the distinct purpose of what the defense called the "secret mission" Libby undertook at the behest of the President and Vice President. Libby and his defense team contended that it was to leak Miller portions of the October 2002 National Intelligence Estimate (NIE) on Iraqi WMD to bolster the administration's case. And Libby categorically denied to the grand jury that the meeting had anything to do with Plame and her CIA identity.
However, the trial (and pretrial wrangling) revealed two problems with the defense's depiction of Libby's "NIE secret mission.". First, the prosecution showed at trial, principally through Judith Miller's testimony about the July 8 meeting backed up by her contemporaneous notes of it, that Libby did indeed disclose Plame's CIA identity to her. It was also demonstrated that Cheney himself was focused on the idea that Wilson's wife had sent him on his mission for the CIA at that very moment.
Second, it turns out that Libby was leaking portions of the NIE to other reporters, and doing so without the secrecy that surrounded his meeting with Miller..."
"Together, those revelations undercut the notion that the NIE leak was the distinctive purpose of Libby's secret mission, and instead make clear that at least part of the distinctive purpose was to leak Plame's CIA identity to Miller in an effort to get the Times to publish that information.
That in turn raises troubling questions about Cheney and Bush's role in sending Libby on his secret mission. Cheney's hand-written notes on Wilson's op-ed from two days earlier showed that he was focused on Wilson's wife's alleged role in her husband's mission. Libby was acting at Cheney's direction. How likely is it that Cheney did not direct Libby to disclose information about Plame to Miller?
And what was the substance of Cheney and Bush's discussion shortly before Libby went on his secret mission to disclose previously-classified information to the press with the President's permission? Published reports have indicated that Bush told Cheney something to the effect of "Get it out," or "Let's get this out," referring to information that would damage the case Joe Wilson was making against the administration. Libby himself testified before the grand jury that Cheney told him something strikingly similar. That means that if Bush and Cheney discussed Wilson's wife before the direction was given, the President was effectively authorizing his subordinate to disclose Plame's CIA identity to the press.
It is precisely out of the desire to avoid such uncomfortable questions for himself and his vice president that Preside
It is precisely out of the desire to avoid such uncomfortable questions for himself and his vice president that President Bush is likely not to pardon Libby but to commute his sentence, or otherwise keep him out of prison without fully clearing him. That would enable Libby to remain free while he seeks legal vindication through the appeals process. But more importantly, it would enable Bush and Cheney to continue the strategy they have successfully pursued in deterring journalists seeking their explanations with claims that they shouldn't comment on an ongoing legal proceeding. If Bush were to pardon Libby, he and Cheney would no longer have such a rationale for evading the press' questions - nor would Libby be able to claim the right against self-incrimination to resist testifying before Congress about the role that Cheney and Bush played in directing his conduct."
...
Last?
First?
Right in the middle?
OT: Why would Bush announce he is getting Libby out of jail time on a Monday afternoon right before July 4th? News releases are planned to be high or low profile.
Is he trying to get impeached before the shit hits the fan?
The only conclusion that could resonably be made here is that he is under the influence.
On another note, busy evening and very interesting for those that are following the state of the credit markets and potential implications of current events-
JPMorgan Cuts Ratings on CLOs as Subprime Loan Problems Spread - Bloomberg.com
Chrysler Gets Junk Credit Ratings From Moody's, S&P (Update4) - Bloomberg.com
Expired
MarketWatch.com
Expired
Paulson is an embarrassment to everyone but those in the current administration. The administration are ALL shameless and most are incompetent so they either don't give a damn or can't tell. I don't know which is worse.
What a stooge...
Is he trying to get impeached before the shit hits the fan?
Risk & MOT... Cut the guy some slack - he just wanted to get peoples' minds off all this sub-prime negativity. Give them something NEW to talk about.
By this time next week no one will even remember there was a real estate debt problem... must be one of Karl's ideas, they never blow up.
The only conclusion that could resonably be made here is that he is under the influence.
I am not!! How dare you make baseless declarations! P.S. looks like MOVI is a candidate for the first notable retail bk of this cycle.
Maybe Paulson is going to "commute" the housing bust.
Maybe Paulson is going to "commute" the housing bust.
But only the 'prison time'... not the fines we all gotta pay.
I think I'm going to go make myself one HUGE mother of a gin-n-tonic and decide whether I'm going to laugh about all this or cry.
Lereah called bottom at least four times:
David Lereah Watch: Lereah Calls Bottom For At Least The Fourth Time
Maybe Paulson is going to "commute" the housing bust.
Clover goes to the gable wall and brings Benjamin with her. She asks Benjamin to read for her what is on the gable wall. All the commandments are gone, and all that is written there now is All animals are equal, But some animals are more equal than others.
Animal Farm by George Orwell. Search, Read, Study, Discuss.
I think I'll also have that drink, dryfly, make mine a large Irish, neat.
From an article by Richard Ben-Veniste, a member of the Watergate Task Force, on Ford's decision to pardon Nixon. I think it speaks fairly forthrightly on the dangling question perils of early pardon for government officials. As the old saying goes, sunlight is the best disinfectant.
Richard Ben-Veniste - The Pardon in History's Hindsight - washingtonpost.com
"Upon taking office as president, Gerald Ford gave reason to believe that any decision regarding a pardon for his predecessor would be made carefully and deliberately. Nineteen days after taking the oath of office, he responded to a press inquiry about a possible Nixon pardon, saying that until any legal process was undertaken it would be 'unwise and untimely for me to make any commitment,' adding that 'until the matter reaches me, I am not going to make any comment during the process of whatever charges are made.'
Yet, only 11 days later, Ford reversed course."
...
"While I do not believe Ford was wrong to pardon Nixon, the timing of the pardon was premature ... pardoning Nixon without requiring at least an acknowledgment of responsibility for serious misconduct and for lying to the public left the door open for the spate of revisionist books and articles that followed the resignation."
...
"... In the end, Ford may have been correct in believing the facts would sort themselves out well enough. Yet, because Ford did not condition his pardon on a formal acknowledgment of culpability by Nixon, historians will have to go to the underlying evidence to make their judgments on Nixon's responsibility for the criminal conduct and constitutional transgressions that left him with the stark choice between resignation and certain removal from office."
boo everybody.
The libberator-
YouTube - Frank Caliendo on Letterman
Pelosi comment-
MarketWatch.com
More hedge fund trouble-
- Bloomberg.com
Hmm.. I may have to retract my statement. It seems this is a commutation of sentence, not a full pardon (for now). Libby's Appeal may still go on.
Bush commutes Libby's prison sentence - CNN.com
"the commutation does nothing to prevent Libby from appealing his conviction. And if the appeal fails or is still in process at the end of Bush's term, there is nothing to prevent the President from granting Libby a full pardon before he leaves office."
MOT - "Why would Bush announce he is getting Libby out of jail time on a Monday afternoon right before July 4th? News releases are planned to be high or low profile."
Various commentators I've read have repeatedly made the point that Dubya has lived, died, and governed by narrow-base politics. I think this was aimed at his base and conservative talk radio listeners. They've been clamoring for him to do this and he needs a boost from the immigration debacle.
Ah come on people, Paulson was a super shill for Haul Street and now he's a Hill Shill for Washington Mall Street. What do you expect him to say, "The futures market indicates housing prices will continue to correct (read FALL) for the next five years so get used to it." I don't think so Tim. PS: to Tanta, I thought you were cool before Saturday's Pigs On The Wing, now I know you are. Go Pink. Hey, and I'm 62.
boo everybody
Hey dc - I bet everyone inside the beltway is talking real estate today right?
CNN/Money is predicting a shakeout in Private Equity coming due to higher rates (credit crunch?) and harder deals.
Private equity shakeout may be coming - Jul. 2, 2007
Paulson - another administration official, another lie. Just another day in Bushmerica.
Pass the gin, dryfly.
I won't be needing the tonic.
largest loss estimate yet ?
July 2 (Bloomberg) -- Fannie Mae and Freddie Mac, the
largest sources of money for U.S. home loans, may lose as much as
$6.6 billion should defaults in subprime mortgages force write
downs on securities rated below AAA, said Karen Shaw Petrou,
managing partner at Federal Financial Analytics Inc.
Investments in such mortgage bonds totaled $12 billion at
Washington-based Fannie Mae and $10 billion at McLean, Virginia-
based Freddie Mac in May, according to Petrou. Subprime mortgage
defaults may require a write down of these assets of 15 percent
to 30 percent, she said.
Mortgage investors have been reeling this year as the worst
housing decline since the 1930s threatens the $6 trillion U.S.
mortgage bond market. Petrou's estimate challenges the view of
investors who predict Fannie Mae and Freddie Mac will weather a
rise in mortgage delinquencies because the firms primarily limit
themselves to investments in only the highest rated securities.
The government-chartered companies have significant risk
and the AAA alone don't protect them from it,'' said Petrou,
whose clients include FM Policy Focus, a lobbying group seeking
tougher federal oversight for the firms. Subprime-related losses
of $3.6 billion at Fannie Mae and $3 billion at Freddie Mac would
erode most of their reserves mandated by the Office of Federal
Housing Enterprise Oversight, she said.
Freddie Mac spokeswoman Sharon McHale called the loss
estimatesabsurd.''
Fannie Mae's private label holdings as of March 31 that were
rated below AAA were all in manufactured housing securities, on
which impairments have been taken, spokeswoman Janis Smith said.
The rest was in municipal bonds that weren't backed by subprime
mortgages. Almost all of the mortgage revenue bonds were AA rated
securities, Smith said.
``We do not own the asset types, collateralized debt
obligations, that were the basis of the liquidity pressure at the
institutions referenced in the report,'' Smith said.
Fannie Mae's surplus capital from Dec. 31 to the end of the
first quarter fell and is now 10.2 percent above the Ofheo-
required minimum, down from 10.9 percent. Freddie
Freddie Mac's surplus
is 5.9 percent above the requirement, down from 7.7 percent,
Ofheo said on June 28. Fannie Mae's surplus as of March 31 was
$3.9 billion, while Freddie Mac's was $2 billion.
Among Freddie Mac's holdings in non-AAA securities, $5
billion are mortgage revenue bonds that are rated AA and help the company fulfill its federal mission to promote homeownership
among low- and moderate-income homebuyers, McHale said. These are very mission-rich holdings for us,'' she said.
About $1 billion of the securities are related to
manufactured housing, with 97 percent of these holdings insured
to a level comparable to AAA, she said.
While declining to identify the remainder of the non-AAA
securities, McHale saidwe mark those holdings to market and we
have not seen any deterioration in credit.''
Defaults in subprime mortgages forced Bear Stearns last
month to provide $1.6 billion in credit lines to rescue one of
its hedge funds. Cambridge Place Investment Management LLP said
last week that it will close Caliber Global Investment Ltd., a
hedge fund that had $908 million of assets in March.
Fannie Mae and Freddie Mac, created by Congress to increase
financing for homebuyers, own or guarantee about 40 percent of
the nation's $10.9 trillion residential mortgage market. The
companies channel money into the mortgage market by buying home
loans from lenders. They profit by holding mortgages and mortgage
bonds as investments and by charging a fee to guarantee and
package loans as securities.
Petrou declined to estimate the impact on Fannie Mae and
Freddie Mac from a writedown of subprime mortgage bonds, noting
that the U.S. Treasury has authority to buy $2.25 billion each of
their securities in the event of default.
It's unclear how much ``their implicit guarantee insulates
them to the market reaction'' to subprime losses, she said.
Congress, because of partisan disagreements, has failed to pass legislation creating a stronger regulator for Fannie Mae and
Freddie Mac since 2003, when the firms began to disclose a total
of $11.3 billion in accounting errors.
Various commentators I've read have repeatedly made the point that Dubya has lived, died, and governed by narrow-base politics. I think this was aimed at his base and conservative talk radio listeners. They've been clamoring for him to do this and he needs a boost from the immigration debacle.
Andrew - I think there is a lot more to it than that. From the comments (from 'joe') over at Angry Bear:
Anyone who really believes the Bushies are as dumb as Bush plays out to be ought to have their own intelligence challenged. JMHO.
Yeah, but dryfly, why couldn't congress immunize his testimony at this point and then compel it? What is there to lose, if Bush has already commuted his sentence?
said Petrou, whose clients include FM Policy Focus, a lobbying group seeking tougher federal oversight for the firms.
fivewood - who are these guys and why do they care? Everyone has an angle, what's theirs?
Secondly - if you look at what would happen to Freddy & Fanny should AAA vaporize... what would happen to the 'private markets'... to credit in general? If Freddy and Fanny get burned, private markets get incinerated.
Mark Thoma at Economist's View has several major newspaper comments on the Libby commutation and the full text of Bush's written statement if anyone's curious.
Economist's View: Libby's Sentence Commuted
And dc, I don't care what your politics are, you don't play beltway games with covert operatives or the cover organizations they use (and they blew the cover of a big front company I understand). That sort of stupidity gets people killed. The Administration had plenty of other ways to counter Joe Wilson's OpEd piece.
If you owe the bank $1,000,000, the bank own you. If you owe the bank $1,000,000,000,000, you own the bank.
Could this apply to the hedge funds' CDO mess. The bank/ administration would then take the natural path of covering it until they can't. The Enron cover up was almost sucessful, only to fail at the very last moment, just before the upsurge in energy price during the Iraqi war.
Is The Pumping Paulson:
a) Supporting the dollar as it challenges 80 on the dollar index?
b) Supporting the homebuilders as they challenge a double bottom
c) Supporting CDO valuations
d) Just wanting to get on TV because his grandkids are coming over this weekend
e) all of the above
Yeah, but dryfly, why couldn't congress immunize his testimony at this point and then compel it? What is there to lose, if Bush has already commuted his sentence?
I thought the same thing but the only stick congress will hold over him now is contempt... and Bush can pardon that too, later, if Bush (Cheney) so decide. Again commutation now with promise of future pardon later if he behaves 'ices' him completely.
And having the $250K fines over his head (with implied promises of future speaking engagements to 'friendly audiences' again if he behaves) makes that 'potential punishment' less so, no?
The only way Libby sings is if he wants to sing - so far he hasn't had even the remotest intention of doing so.
These guys are NOT dummies. Anyone who suggests they are is kidding themselves.
No dryfly, I don't think the Bushies are stupid. Not by a long shot. Particularly when it comes to partisan infighting.
From the interviews I've seen, Dubya himself is a very intelligent man, but he believes in the rightness of his course of action, zealously so.
The link to the FM Policy Focus Group... a collection of competitors of Freddy & Fanny. I wonder what their collective loss would be if AAA goes POOF?
http://chevallier.turgot.org/a626-Irrationality_of_the_markets.html
This guy says that Americans are increasng their actual savings in the bank. Is that true?
He predicts that M2 - M1 is increasing at such a rate to indicate a 0% 2nd Quarter GDP growth.
Still thinking whether his thesis is correct. He is right on the 1st Quarter GDP though.
Candyman, the Enron cover up was not almost successful - not by a long shot. It was a potemkin village from very early days and it was only a matter of time before the math of their business caught up with them. If it hadn't been November 2001, it would have been within a few months.
As we are seeing with Bear Stearns and others in subprime, you may be able to put off the inevitable for a quarter or two, but the facts own you at the end of the day.
perhaps he knows that they will be cutting interest rates?
BTW - Tanta, if I were the Dems, I'd do exactly as you suggest... subpoena Libby, force him to testify to congress under oath and make Bush pardon him sooner rather than later. Force the issue.
That is the ultimate of dirty politics - both ways - but at least the people get to see it for what it is. No naked emperors that way...
I can imagine what the Dem '08 candidates will say about this (off with his head)... What I'm dying to hear is what the GOP Class of '08 have to say, will they run from Bush & if so how far? Like Andrew said above, they got constituencies to worry about.
Wow. I might have to pow-wow with my ex federal prosecutor sister pretty soon.
Regardless, I think we can all assume sub-prime & hedgie news has been blown off the front page for a while.
Hot Paulson is stepping right on time. I want to have his baby.
confession time begins-
United Capital's Devaney Halts Redemptions on Funds (Update1) - Bloomberg.com
Interesting commentary. The Bush crowd may not be stupid, but they haven't done real well for some reason. I guess lots of madmen are tactical geniuses...
Paulson sounds like a Realtor that got his license in 2005.
It can often be the case Dan. A prime example is the Carthaginian General Hannibal. He was a tactical genius and won most of the battles against Rome, but lost the war. Not sure on the mad part though, tragic is the more likely.
Dryfly, thanks for the insights tonight, you and Tanta are wonderfully devious and untrusting of human nature. I need to hang around you guys more often, it's an education. However, also remind me not to sit down to a friendly game of poker with you.
dry:
hard to say who is saying what since people often talk about real estate with me.
i kow i've had clients get outbid many times this year. i know they finally 'won' by paying 10% over asking.
i know there is tons of inventory in lots of places and not so much in some places.
the data for june comes out on the 10th or so.
i know i truly am busier than ever, however.
For fee development of a charter school building, architecture work, and leasing.
Lease, design, and build for a fitness center.
Design and build a new residential project in downtown DC.
Design a new bar/club downtown.
Sell condo units
Design/Build residential additions.
Develop and lease urban retail.
And so forth.
the buidling industry as a whole in DC is still in boom time.
I am so sick and tired of the BS lies, kool aid sucking up BS spin taking the populace as a bunch of blind, naive ignorant sheep. Paulson, Bernanke, Rove, Cheney, the whole god dam gov't. Libby Pardon is just another spit in the face and telling us to go like it and shut up. We tell you what to think. Don't challenge us, we're not accountable, we're above the law. What's it going to take to get honesty, integrity and somebody for once and for all to start telling the straight goods and not BS taking the population's intelligence for granted. Impeach Bush, fire Paulson, send Cheney to jail, charge so many with fraud there'll be hardly anybody left. Just sickening.
Just sickening.
I couldn't have said that better myself Stuart.
It is sickening But if you really want to be sick look at the list of criminals that Clinton set free.
USDOJ: Office of the Pardon Attorney - Pardons Granted by President Clinton
So Bush released a crony for political reasons. Not good, but nothing new.
as for Paulson's comments...
Yet again, another false bottom is declared.
I have no complaints about people being wrong. Such errors increase the opportunity for gains.
So Bush released a crony for political reasons. Not good, but nothing new.
First of all does Clinton set Bush's standards? Is he Bush's roll model? If so Bush should have alerted us to that in the elections.
Secondly, I'm no Clinton fan... however did any of those 'cronies' Clinton pardon or commute blow the whistle on a CIA operative? Any of the folks Clinton let skate have close ties INSIDE his administration? Close like Libby was close (i.e. inner circle)?
Bush has set a new low. So many of them it is hard to keep count.
I've said ever since 2001 that the best thing that ever happened to Bill Clinton is that he was sandwiched between Bushes. It was the only thing that made him look statesmanlike.
Clinton's best asset is his unmatched ability to lie.
Clinton's best asset is his unmatched ability to lie.
Again is Big Dog what Bush aspires to be? What Bush lacks in ability he makes up in quantity.
zephyr- "So Bush released a crony for political reasons. Not good, but nothing new."
Clinton, Bush, Democrats, Republicans. Same pants, different pockets.
Clinton, Bush, Democrats, Republicans. Same pants, different pockets.
Exactly. Except in my estimation Bush is the worst of the lot - worst in my lifetime & that is saying a lot after Carter (nice guy, very bad president).
Remember to ask me that question again in 2-3 years I reserve the right to change my mind.
you know, i was reading this thread to see what people had to say about paulson.
and then i encountered zephyr, to whom i can only say: the sheer silliness of claiming that clinton's biggest strength was his ability to lie is only matched by the sheer stupidity of claiming that clinton's pardons have anything to do with this decision by bush, which constitutes prima facie evidence of obstruction of justice.
right-wing sickos who live on clinton hatred should at least have the decency to spread their crap all over right-wing blogs, not here at the intelligent gathering that calculated risk and tanta have put together.
I don't like Bush or Clinton. But not liking Clinton makes me a right wing sicko in Howard's coloring book...
So here I am, someone who has given thousands of dollars to Democratic candidates for house, senate and president, but because I dared to speak ill (but accurately) of Clinton (in the context of criticism of Bush) I become a right wing sicko...
Howard, Zephyr, be good or you'll have to sit in the corner for fifteen minutes.
I thought the same thing but the only stick congress will hold over him now is contempt... and Bush can pardon that too, later, if Bush (Cheney) so decide. Again commutation now with promise of future pardon later if he behaves 'ices' him completely.
That won't work. If Bush pardons Libby immediately, the Dems subpoena him again, cite him for contempt again, forcing Bush to pardon him again. This matter is a loser for Bush commuting the sentence once he might get away with. Pardoning a guy solely to keep him from testifying before Congress is a losing game. Really, they'll just claim executive privilege, and tie that up in the courts for a couple of years. That doesn't require a commutation instead of a pardon. This really was Bush trying to split hairs.
There's a consistent pattern that Democrats pardon people for money, while Republicans pardon themselves. I find the latter to be more corrosive of the system.
Dryfly however did any of those 'cronies' Clinton pardon or commute blow the whistle on a CIA operative?
It wasn't Libby. It was Richard Armitage. Libby was convicted of lying to the FBI and the grand jury. MSNBC article. I stopped following the whole thing once I found that out, so otherwise I don't have an opinion.
Back to the interesting question of why Paulson is spouting this stuff. On the one hand, it's pretty close to what the Fed has been saying. On the other hand, I wonder if he believes the Fed? I doubt it. I don't think even the Fed believes it any more. So he's probably just stepping up to the plate and taking the cheerleader role.
Is the May 2007 number of housing starts an annualised number based on the first five months?
CME housing futures for May08 10-City Composite is down on settlement versus the April Case-Shiller Index 3.2%.... is that where the contract should be give the pending sales data?
About the only thing that makes Paulson's cheerleading interesting to me is that the consistent demotion (and eventual exclusion) of players like Paulson and his predecessors who were promised a seat at the policy table as part of the inducement to serve is that it provides further evidence (if such were needed) of the Bush/Cheney/Rove team's unwillingness or inability to accept new thinking or alteration of their world view.
It is like seeing an onion peeled back, layer by layer, the players fall away as the center hardens: Some, perhaps like our friend zephyr, claim all onions are alike and they were something other than onion skin anyway (which makes us wonder why our nose itches when they speak); others proudly proclaim their onion-ness but deny they came from THAT poor excuse for an onion over there; still others remain loyal to their root stock even as it shrivels.
But increasingly now we suspect there might actually not be a center at all, that when the last layer peels away, there will be nothing.
Such metaphoric excess aside (if marsupial mammals can be abused I see no reason to spare vegetables), not all political issues, or politicians for that matter, are equivalent; mere matters of opinion or personality. Some clearly give better service than others, improving the lot of the majority while avoiding oppression of a minority in the process. Frankly anyone who judges Bill Clinton and Dubya Bush equivalent based upon a capacity for mendacity or any other factor irrelevant to that essential service frankly doesn't know the difference between an onion and a rutabaga.
Dryfly, you are prescient my friend.. Mark Thoma over at Economist's view posted an LA times OpEd restating your rational for Bush keeping Libby on the leash with a commutation and not a full pardon. Yeesh.
Economist's View: Why Bush Commuted Libby's Sentence, But Did Not Pardon Him
...
"There was dispute, however, over the distinct purpose of what the defense called the "secret mission" Libby undertook at the behest of the President and Vice President. Libby and his defense team contended that it was to leak Miller portions of the October 2002 National Intelligence Estimate (NIE) on Iraqi WMD to bolster the administration's case. And Libby categorically denied to the grand jury that the meeting had anything to do with Plame and her CIA identity.
However, the trial (and pretrial wrangling) revealed two problems with the defense's depiction of Libby's "NIE secret mission.". First, the prosecution showed at trial, principally through Judith Miller's testimony about the July 8 meeting backed up by her contemporaneous notes of it, that Libby did indeed disclose Plame's CIA identity to her. It was also demonstrated that Cheney himself was focused on the idea that Wilson's wife had sent him on his mission for the CIA at that very moment.
Second, it turns out that Libby was leaking portions of the NIE to other reporters, and doing so without the secrecy that surrounded his meeting with Miller..."
"Together, those revelations undercut the notion that the NIE leak was the distinctive purpose of Libby's secret mission, and instead make clear that at least part of the distinctive purpose was to leak Plame's CIA identity to Miller in an effort to get the Times to publish that information.
That in turn raises troubling questions about Cheney and Bush's role in sending Libby on his secret mission. Cheney's hand-written notes on Wilson's op-ed from two days earlier showed that he was focused on Wilson's wife's alleged role in her husband's mission. Libby was acting at Cheney's direction. How likely is it that Cheney did not direct Libby to disclose information about Plame to Miller?
And what was the substance of Cheney and Bush's discussion shortly before Libby went on his secret mission to disclose previously-classified information to the press with the President's permission? Published reports have indicated that Bush told Cheney something to the effect of "Get it out," or "Let's get this out," referring to information that would damage the case Joe Wilson was making against the administration. Libby himself testified before the grand jury that Cheney told him something strikingly similar. That means that if Bush and Cheney discussed Wilson's wife before the direction was given, the President was effectively authorizing his subordinate to disclose Plame's CIA identity to the press.
It is precisely out of the desire to avoid such uncomfortable questions for himself and his vice president that Preside
It is precisely out of the desire to avoid such uncomfortable questions for himself and his vice president that President Bush is likely not to pardon Libby but to commute his sentence, or otherwise keep him out of prison without fully clearing him. That would enable Libby to remain free while he seeks legal vindication through the appeals process. But more importantly, it would enable Bush and Cheney to continue the strategy they have successfully pursued in deterring journalists seeking their explanations with claims that they shouldn't comment on an ongoing legal proceeding. If Bush were to pardon Libby, he and Cheney would no longer have such a rationale for evading the press' questions - nor would Libby be able to claim the right against self-incrimination to resist testifying before Congress about the role that Cheney and Bush played in directing his conduct."
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