Monday, April 27, 2009

Is This An Example Of "The New America?"

Is this an example of "The New America?"


The cavalier use of brute government force has become routine, but the emerging story of how Hank Paulson and Ben Bernanke forced CEO Ken Lewis to blow up Bank of America is still shocking.

In the name of containing "systemic risk," our regulators spread it. In order to keep Mr. Lewis quiet, they all but ordered him to deceive his own shareholders. And in the name of restoring financial confidence, they have so mistreated Bank of America that bank executives everywhere have concluded that neither Treasury nor the Federal Reserve can be trusted.

Mr. Lewis has told investigators for New York Attorney General Andrew Cuomo that in December Mr. Paulson threatened him not to cancel a deal to buy Merrill Lynch. BofA had discovered billions of dollars in undisclosed Merrill losses, and Mr. Lewis was considering invoking his rights under a material adverse condition clause to kill the merger. But Washington decided that America's financial system couldn't withstand a Merrill failure, and that BofA had to risk its own solvency to save it. So then-Treasury Secretary Paulson, who says he was acting at the direction of Federal Reserve Chairman Bernanke, told Mr. Lewis that the feds would fire him and his board if they didn't complete the deal.

Mr. Paulson told Mr. Lewis that the government would provide cash from the Troubled Asset Relief Program (TARP) to help BofA swallow Merrill. But since the government didn't want to reveal this new federal investment until after the merger closed, Messrs. Paulson and Bernanke rejected Mr. Lewis's request to get their commitment in writing.

"We do not want a disclosable event," Mr. Lewis says Mr. Paulson told him. "We do not want a public disclosure." Imagine what would happen to a CEO who said that.

After getting the approval of his board, Mr. Lewis executed the Paulson-Bernanke order without informing his shareholders of the material events taking place at Merrill. The merger closed on January 1. But investors and taxpayers had to wait weeks to learn that the government had invested another $20 billion plus loan portfolio insurance in BofA, and that Merrill had lost a staggering $15 billion in the last three months of 2008.

This was the second time in three months that Washington had forced Bank of America to take federal money. In his testimony to the New York AG's office, Mr. Lewis noted that an earlier TARP investment in his bank had a "dilutive effect" on existing shareholders and was not requested by BofA. "We had not sought any funds. We were taking 15 [billion dollars] at the request of Hank [Paulson] and others," Mr. Lewis testified.

But it is the Merrill deal that raises the most troubling questions. Evaluating the policy of Messrs. Bernanke and Paulson on their own terms, this transaction fundamentally increased systemic risk. In order to save a Wall Street brokerage, the feds spread the risk to one of the country's largest deposit-taking banks. If they were convinced that Merrill had to be saved, then they should have made the public case for it. And the first obligation of due diligence is to make sure that their Merrill "rescuer" of choice -- BofA -- had the capacity to bear the losses. Instead they transplanted the Merrill risk to BofA shareholders, the bank's depositors and the taxpayers who ensure those deposits. And then they had to bail out BofA too.

Messrs. Bernanke and Paulson also undermined the transparency that is a vital source of investor confidence. Disclosure is not a luxury to be enjoyed only when markets are rising. It is the foundation of the American regulatory system and a reason investors have long sought to keep their money within U.S. borders.

Mr. Paulson told Mr. Cuomo's investigators that he also kept former SEC Chairman Christopher Cox out of the loop while forcing BofA to rescue Merrill. Mr. Cox wasn't the only one. Mr. Paulson and Mr. Bernanke both sit on the Financial Stability Oversight Board, comprised of federal regulators who oversee TARP. Two days after Mr. Lewis told the dynamic duo that Merrill's losses were exploding and that he was looking for a way out, Mr. Bernanke chaired and Mr. Paulson attended a meeting of this board. Minutes of the meeting show no mention of BofA or Merrill.

At the next meeting on January 8, a week after the merger had closed, the minutes again make no mention of either regulator telling their colleagues that they had committed tens of billions of dollars.

Folks... the Wall Street Journal isn't making this stuff up.

Today is April 27, 2009 of the Age of Obama. The above excerpts are fact, not fiction. We as a nation and a people are in deep, deep trouble.

Tuesday, April 21, 2009

All The News That's Fit To Shudder At...

Yeah, yeah... I've been slacking off a bit on the postings here at Usually Right. No one particular reason; basically it's that the "news" as a whole continues to depress and disappoint me.


Once a week or so I get emails from "Cooler Heads Digest," a publication of the American Enterprise Institute, which alerts me to new research, news, and analysis regarding the "climate change." Here are a few snippets from the most recent Digest:

A video of Chris Horner, author of "The Politically Incorrect Guide to Global Warming" and "Red Hot Lies: How Global Warming Alarmists Use Threats, Lies, and Deception to Keep You Misinformed" outlining corporate welfare and other wasteful and counterproductive government policies as they relate to the Obama Administration's energy policies. Check it out... it's only 4:41 minutes long.

Then there's this Wall Street Journal op-ed written by Pete DuPont, titled "Sapping America's Energy," that if you take two minutes to read will surely give you the chills... all global "warming" aside.

By the way... as DuPont points out within his piece... According to the U.N. Intergovernmental Panel on Climate Change, the Earth's average rate of warming in the 30 years from 1977 to 2007 was just 0.32 degree Fahrenheit per decade, and the global surface temperature has remained virtually flat since 1998.

Yep. All the news that's fit to shudder at.

More? Sure! Here's Iain Murray's latest piece, "Upset Over Offsets".

Then we have the news and analysis that's depressing not in and of itself, but based on the fact that so few will be exposed to it. Per
fect example: Click Here!

Finally... to round out my digest of the latest... er... Digest... check this out.


And this post simply represents the highlights of one email from one of the various Think Tanks I receive emails from on a daily basis. Add to that my daily newspaper and general news browsing...


Again... this post provides a single topic example - in this case, regarding the issue of climate change - of the daily deluge of depressing data that comes with being aware of what the heck is going on nationwide and worldwide.


Oh, well... enough whining... 20 days between posts is far too long. Therefore...


Wednesday, April 1, 2009

Can He Really Be This Dumb...???

So... our President gave Queen Elizabeth... an iPod.

And WHERE do you suppose this "gift of state" from President Obama (our Chief of State) to Her Majesty The Queen (their Chief of State) was manufactured...???

Can you guess...???

Com'on... you can guess...

Com'on... first guess... bet you'll get it...


So much for the American worker, huh?

Seriously... folks... I couldn't make this stuff up if I tried!

Mona Charen's Most Recent Column

Giving credit where credit is due, allow me to offer Ms. Charen's most recent column, "The Ship Is Sinking; Quick, Add Water!" to Usually Right readers:

Let’s imagine that President Obama decides to go help out in Fargo, N.D., where they are experiencing floods. Mr. Obama enters the home of a flooded family. The water is already six inches high in the living room. The president produces a fire hose and begins to douse the room with even more water. “What are you doing?” cry the anguished homeowners. The president fixes them with one of his impatient looks, and explains “May I remind you that I inherited this flood?”

President Obama has reminded us countless times that he inherited a $1.3 trillion deficit. Even if he were about to propose the most responsible, prudent, visionary budget imaginable, that complaint would still be petulant and unseemly. But considering what Obama’s own spending will do to the deficit, it’s jaw-droppingly galling. He now proposes to increase that deficit to $7 trillion in ten years. And that $7 trillion is probably a low estimate (the Congressional Budget Office estimates that it will be $2.3 trillion higher [therefore rising to $9.3 trillion]). When the new spending for programs like Pell grants, education for handicapped children, and so forth comes up for renewal in a few years, Congress is not going to let it lapse. So, to review, it was terrible for President Bush and the Democratic Congress (the president neglects to mention the latter) to saddle him with all this debt. His answer is to triple it. That’s showing ‘em!

Some cynics insist that Democrats only decry spending they dislike (such as on the military) and Republicans only deprecate spending they dislike (such as on welfare). There’s a germ of truth in this — but only a germ. In the first place, a significant number of Republicans chastise other Republicans for failing to live up to their lean-government principles. And some Republicans are honest enough to criticize spending their party generally favors. John McCain, for example, has been a scourge of Pentagon contractors. It’s hard to think of a comparably positioned Democrat who has targeted waste, fraud, or abuse in social-service programs or education spending.

Even taking account of the Democrats’ traditional love of lavish government programs, the current gusher quite takes your breath away. In just the first two months of his term, President Obama has proposed the largest increase in federal spending since World War II. If his budget is enacted, the national debt will be close to 100 percent of GDP in nine years. The Obama/Pelosi/Reid triumvirate is massively increasing government debt at the same time that individuals are struggling to reduce their private debt. So Mr. and Mrs. Jones are cutting back on meals out at restaurants, new clothes, new cars, and fancy cell phones, while the government is going into deep debt on their behalf to pay for windmills, universal preschool, and lots of new transfer payments dressed up as “making work pay.” In other words, the state is taking decisions about how much debt Mr. and Mrs. Jones will incur out of their hands. The Joneses will have to pay back the debt some time (or their children will), but they will not be paying off their own purchases or their kids’ college educations. Instead they will be paying for the Democrats’ dream agenda. As the Wall Street Journal’s Steven Moore notes, “Most of the money that has been borrowed since September 2008 has been used to bail out irresponsible borrowers, failed financial institutions and car companies, and for expansions of welfare programs. . . . Any unbiased assessment of the return on investment . . . for these programs would find dismally low payoffs for taxpayers.”

The sheer size of this proposed debt is making even Europeans quake. German Chancellor Angela Merkel has three times declined the urging of Obama administration officials to mimic America’s debt spree. Some Europeans are even becoming role models for Republicans. As Veronique de Rugy reports in National Review Online, Sen. Judd Gregg (R., N.H.) introduced an amendment “to ensure that the budget of the Federal Government is put on a sustainable path by prohibiting consideration of a budget resolution that does not meet the minimum standard of budgetary discipline as defined by the Treaty on European Union (the Maastricht Treaty): a budget deficit no larger than 3% of GDP and government debt no larger than 60% of GDP.” The amendment was rejected.

Senator Gregg, nobody’s idea of a hysteric, is profoundly worried: “If you take all the debt of our country run up by all of our presidents from George Washington through George W. Bush, the total debt over all those 200-plus years since we started as a nation, it is President Obama’s plan to double that debt in just the first five years that he is in office.”

To quote the theme song of the TV show Monk, “If you paid attention you’d be worried too.”