September 28, 2008

Hank Paulson’s Blackmail? (Bernanke, Too?)

Filed under: Economy,Taxes & Government — Tom @ 1:11 pm

(Carried to the top, likely for the rest of the day)

Are the following events coincidences? I don’t think so.

More like 2 + 2 = 4.

As in, two ….

Bailout Failure ‘Will Cause US Crash‘”

The US stock market could suffer a devastating crash with shares losing a third of their value this week if Hank Paulson’s financial bailout plan fails, US Treasury officials have warned.

….. plus two …..

WaMu Bondholders are ‘Stranded’ in Thrift Seizure

“It seems that WaMu’s major debt holders have been stranded by regulatory intervention,” David Hendler, an analyst at bond research firm CreditSights in New York wrote in a report today. “The deal structure seems to be unprecedented in that it excludes bondholders at the holdco and bank levels from the major assets and liabilities of the operating bank.”

….. equals four:

Lawmakers Reach Tentative Bailout Deal

WASHINGTON — Top U.S. policymakers emerged from hours of tense negotiations with a clear message just after midnight on Sunday morning: A deal to bail out U.S. financial markets has been agreed on and all that remains to be done is to commit the legislation to paper.

My take: The way the WaMu bondholders are being treated is unprecedented (I also read that at another link), and is a major and again (sorry for the tired word) unprecedented threat to the markets’ confidence.

I think that Hank Paulson threatened to tank the markets himself if the bailout deal didn’t get done very quickly. Maybe Ben Bernanke, too.

If the government changes its position on the treatment of WaMu bondholders and makes them whole or almost whole, you will know that I was right. If the government treats future situations as it did pre-WaMu, you will know that I was right.

You have no idea how much I want to be wrong.

This is sickening.

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UPDATE: More on this from the UK Times Online (where is the US Press?) –

The broader debt markets were crippled by fears on Friday after the sale of WaMu. Unlike other recent bank deals, this one saw senior creditors wiped out alongside shareholders – an unexpected blow.

The wipeout of WaMu bonds is likely to make it much more difficult for any struggling US bank to raise new finance. If bondholders can be wiped out so easily, there is little point in extending debt to struggling firms. The added uncertainty is likely to make it harder for all companies to renew their debt facilities, and put a further squeeze on the price.

Chances are very great that the uncertainty will bleed into the equity markets, perhaps even giving Paulson & Co. the 1/3 meltdown “Treasury officials have warned of.”

I detect a whiff of financial sedition.

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UPDATE 2: Thanks to Michelle Malkin for linking to this post. Her entries today are here, here (with the bailout bill), and here.

UPDATE 3, Sept. 29: Related, from istockanalyst.com

Did FDIC Sabotage WaMu Management And Erode Investor Confidence?

FDIC Chairwoman Sheila C. Bair, together with JPMorgan Chase (JPM) CEO Jamie Dimon shared the spotlight for saving Washington Mutual (WM) depositors without costing the government a dime. The story is old by now; JPM got the good and the bad of the bank without the holding company’s ugly debt. (Think Clint Eastwood.)

After the glory fades, the reality will come out that the FDIC cannot be trusted. JPM and others were conducting real negotiations with the FDIC at the same time they were conducting fake negotiations with WaMu’s management.

….. (did) FDIC undercut WaMu’s management ….. before or after the fall of Lehman? WaMu started to face a bank run on September 15 – the day Lehman filed for Chapter 11.

The FDIC alone could be proud of its accomplishment, but in the overall context they further eroded investor confidence. Now the moral hazard has spread beyond equity holders to bond holders.

….. The Paulson/Bernanke team has not been very pragmatic in creating value in the form of investor confidence for their bailout money. Punishing or killing shareholders and now bond holders have proved very expensive to the government. With each new implementation of moral hazard, the government has to lay out more money to lift investor confidence

….. If the government lets another large financial or insurance institution fail, or severely punishes their shareholders, Paulson $700B slush fund would be the same as you know what in the wind.

Trillions Left on the Table

Filed under: Business Moves,Economy,Environment,Taxes & Government — Tom @ 12:45 pm

Note: This column went up at Pajamas Media on Friday. I have revised parts of it below to reflect the passage of time since I first submitted it.
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Uncle Sam’s Multi-Trillion Dollar Lockup

Maybe the Treasury bailout debate will force us to look at what we are losing by locking up our energy resources.

This past week’s two major news stories were that:

  1. The Treasury’s $700 billion-plus bailout of the financial industry is in jeopardy — at least the blank-check, right-now, no-accountability version Treasury Secretary Paulson and Fed Chairman Bernanke appear wedded to. (Update: As of Sunday, there was a tentative deal that may have been forced by financial blackmail.
  2. Harry Reid and Nancy Pelosi have apparently bowed to reality, and will not try to renew the annual ban on offshore drilling for oil and natural gas that has annually been enacted into law for over a quarter-century.

Assume for the moment that the bailout passes, and that the ultimate taxpayer loss runs into the hundreds of billions (in theory, it should be less than the amount Paulson and Bernanke want; but never underestimate the government’s ability to make a bad thing worse). Where is that money going to come from?

How about Item 2 above?
(more…)

Catch of the Weekend: Ryan David Jopek’s Mother Told Obama NOT To Wear Slain Son’s Bracelet

Keith Howington of Dehavelle.com is the source of this “Can You Top This?”shocker (HT Warner Todd Huston of NewsBusters).

The original audio interview involved is at Wisconsin Public Radio between Brian Jopek, father of slain soldier Ryan David Jopek, and “Route 51″ show host Glenn Moberg is here (scroll down to March 20, 2008 at link; go to about the 10:01 mark).

Here is the relevant portion of the transcript (this is beyond what Huston posted, as I believe it’s important for set-up), which begin after Mr. Jopek gives a bit of a defense of the mission:

Moberg: Let’s fast-forward to the present time. A few weeks ago, in the Wisconsin Primary election, there was a speech by presidential candidate Barack Obama, who was wearing Ryan’s, Ryan’s military bracelet, a bracelet that your wife Tracy and your daughter Jessica gave to him during an appearance in Green Bay.

Obama: We’re here, because of the mother that I met in Green Bay, Wisconsin, who gave me this bracelet that I’m wearing. Inscribed on it is the name of her son Ryan. He was 20 when he was killed by a roadside bomb in Iraq. And next to his name it says, “He gave …. All gave some, but he gave all.” We are here because it is time to ask ourselves as a nation if we are serving Ryan and his compatriots, and all our young brave men and women as well as they are serving us. They need us to end this war, and bring them home, and give them the care and the benefits that they deserve. They need change, Houston.

Houston? As in “Houston, we have a problem?” Seems a bit flip, considering the speech topic.

Here’s how Moberg picked it up after the speech excerpt (bolds are mine):

Moberg: For better or worse, Brian, your son’s sacrifice has now become part of the political campaign. Can you tell us why Tracy wanted to give him the bracelet to the extent that you can, because I know that you personally do not want to become, or at least I imagine you don’t want to become, part of the political conversation here.

Brian Jopek: I want to make clear that Tracy and I are no longer married. She’s my ex-wife. Basically Glenn, from what I understood, in some e-mail exchanges with Tracy and from reading some of the stories that came out at the time, she just wanted to put a name, y’know, Mr. Obama to know Ryan’s name. That’s all. It was just something that she had intended, uh, to just hand to him. She wasn’t looking to turn it into a big media event, which of course is what it ended up being. She just wanted it to be something between Barack Obama and herself. And actually, because of some of the negative feedback she’s gotten on the Internet, you know Internet blogs, you know people accusing her of… or accusing Obama of trying to get votes doing it… and that sort of thing.

Moberg: Yeah -

Jopek: She has turned down any subsequent interviews with the media because she just didn’t want it to get turned into something that it wasn’t. She had told me in an email that she had asked, actually asked Mr. Obama to not wear the bracelet any more at any of his public appearances. Which I don’t think he’s…

Moberg: It has been a while since he’s brought it up.

Jopek: Right. But, the other night I was watching the news and he was on, uh, speaking somewhere and he was still wearing it on his right wrist. I could see it on his right wrist. So, that’s his own choice. I mean that’s something Barack Obama, that’s a choice that he continues to wear it despite Tracy asking him not to… Because she is a Barack Obama supporter and she didn’t want to do anything to sabotage his campaign, so, if he’s still wearing the bracelet then, uh, that of course is entirely up to him.

Moberg: Maybe there’s a difference between wearing it and making a point to bring it up in your speeches?

If there ever was a “difference,” Glenn Moberg, that difference has vanished. You are such a tool.

I ask this question sparingly, because it’s overused, but it realy fits this situation — Who in the bleep does Barack Obama think he is?

If what Brian Jopek says about his ex-wife’s wishes is true (does anyone seriously doubt it?), add Tracy Jopek to the list of those Obama and his radical backers have stepped on, and over, on the way to achieving their blind ambition.

Expect a full-court Obama press to have Tracy Jopek come out and say “Oh, it’s OK. Don’t believe those e-mails I sent my ex.” Expect the press to then pronounce the controversy “contrived” and “over.”

Horse manure. Obama’s cold, craven opportunism has been exposed, and no after-the-fact cleanup operation will ever change that.

Why should anyone believe that Obama has any intention of giving soldiers and veterans “the care and the benefits that they deserve” when he won’t even honor the simple request of a slain soldier’s mother?

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UPDATE: Jason at Darke Blog — “Sick and shameful.”

UPDATE 2: The “after-the-fact cleanup operation” came in, but it changes nothing — “She DID ask him not to wear it.” The fact that she appreciated Obama’s debate mention is irrelevant. Again, who in the bleep does Obama think he is to deliberately go against a dead soldier’s mother’s stated request?

Positivity: Pope Benedict praises symposium on Pius XII for uncovering the historic truth

Filed under: Positivity — Tom @ 7:00 am

From Vatican City:

Sep 18, 2008

Pope Pius XII, has drawn the interest and scrutiny of many people over the last few decades, but as Pope Benedict XVI spoke to the Pave the Way Foundation at Castel Gandolfo today, he highlighted that previous investigation into the late Pope’s efforts to save Jews from the Nazis and fascists have been biased.

Around noon today at the Pope’s summer residence, he received Mr. Gary Krupp, the president of the Pave the Way Foundation and other members of the organization.

Mr. Krupp and his wife, who are Jewish, founded Pave the Way to fight against religious intolerance and prejudice through educational, cultural and technological means. As part of those efforts, Pave the Way organized a symposium to conduct an in-depth investigation into Pius XII’s life and his pastoral and humanitarian work.

Noting that 50 years have passed since the October 9, 1958 death of the Servant of God Pius XII, the Holy Father pointed out that although “so much has been written and said of him during these last five decades, … not all of the genuine facets of his diverse pastoral activity have been examined in a just light.”

The symposium aimed to address some of these deficiencies by “conducting a careful and documented examination of many of his interventions, especially those in favor of the Jews who in those years were being targeted all over Europe, in accordance with the criminal plan of those who wanted to eliminate them from the face of the earth,” the Pope said.

“When one draws close to this noble Pope,” observed Benedict XVI, “one can come to appreciate the human wisdom and pastoral intensity which guided him in his long years of ministry, especially in providing organized assistance to the Jewish people.”

Pope Benedict then went on to thank the foundation for “the vast quantity of documented material which you have gathered, supported by many authoritative testimonies,” because, as he explained “your symposium offers to the public forum the possibility of knowing more fully what Pius XII achieved for the Jews persecuted by the Nazi and fascist regimes.”

One of the many aspects of the symposium that Pope Benedict praised was how the foundation’s work “had drawn attention to Pope Pius’ many interventions, made secretly and silently, precisely because, given the concrete situation of that difficult historical moment, only in this way was it possible to avoid the worst and save the greatest number of Jews. This courageous and paternal dedication was recognized and appreciated during and after the terrible world conflict by Jewish communities and individuals who showed their gratitude for what the Pope had done for them.”

One special event that Benedict XVI recalled, “Pius XII’s meeting on the 29th of November 1945 with eighty delegates of German concentration camps who during a special Audience granted to them at the Vatican, wished to thank him personally for his generosity to them during the terrible period of Nazi-fascist persecution.” …..

Go here for the rest of the story.