Friday, September 30, 2011

Barker's Newsbites: Friday, September 30, 2011


Beer:30

(Happy Friday!)
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5 comments:

William R. Barker said...

* TWO-PARTER... (Part 1 of 2)

http://online.wsj.com/article/SB10001424053111903703604576587103028334580.html?mod=WSJ_Opinion_AboveLEFTTop

When critics warned about rising defaults on government-backed student loans two years ago, the question was how quickly taxpayers would feel the pain. The U.S. Department of Education provided part of the answer this month when it reported that the default rate for fiscal 2009 surged to 8.8%, up from 7% in 2008.

(*PURSED LIPS*)

This rising default rate doesn't even tell the whole story. The government allows various "income contingent" and "income-based" repayment options, so the statistics don't count kids who were given permission to pay less than they owed.

(*SNORT*)

Taxpayers shouldn't expect relief any time soon. Thanks to policy changes in recent years and fraudulent government accounting, the pain could be excruciating.

(*NOD*)

Readers who followed the Congressional birth of ObamaCare in 2010 may recall that student lending was the other industry takeover that came along for the legislative ride.

* UM-HMM!

Private lenders used to originate federally guaranteed loans, but the new law required all such loans to come directly from the feds.

* NAH... NO SOCIALISM THERE! (*SNICKER*)

Combined with earlier changes that discouraged private loans sold without a federal guarantee, the result is a market dominated by Washington.

* FANNIE AND FREDDIE MAC, ANYONE...? (*SMIRK*)

The 2010 changes did not happen simply because President Obama and legislators like Rep. George Miller and Sen. Tom Harkin distrust profit-making enterprises. The student-loan takeover also advanced the mirage that ObamaCare would save money.

* FOLKS... READ (AND IF NECESSARY RE-READ) THE FOLLOWING CAREFULLY. IT SUMS UP HOW DISHONEST OBAMA IS!

Thanks to only-in-Washington accounting, making the Department of Education the principal banker to America's college students created a "savings" of $68 billion over 11 years, certified by the Congressional Budget Office. Even CBO Director Douglas Elmendorf admitted that this estimate was bogus because CBO was forced to use federal rules that ignored the true cost of defaults. But Mr. Miller had earlier laid the groundwork for this fraud by killing amendments in the House that would have required honest accounting and an audit.

* READ ON...

Armed in 2010 with their CBO-certified "savings," Democrats decided they could finance a portion of ObamaCare, as well as an expansion of Pell grants. But as Bernie Madoff could have told them, frauds break down when enough people show up asking for their money. That's happening already, judging by recent action in the Senate Appropriations Committee, where lawmakers apparently realize that the federal takeover isn't going to deliver the promised riches.

(*SIGH*)

* To be continued...

September 30, 2011 at 12:13 PM
William R. Barker said...

* CONCLUDING... (Part 2 of 2)

To preserve Team Obama's priority of maintaining a maximum Pell grant of $5,550 per year and doubling the total annual funding to $36 billion since President Obama took office, Democrats recently decided to make student-loan borrowers pay interest on their loans for their first six months out of college. Washington used to give the youngsters an interest-free grace period. Taxpayers might cheer this change if the money wasn't simply being transferred to another form of education subsidy. But it seems almost certain to raise default rates as it puts recent grads under increased financial pressure.

* YEP...!!!

None of these programs has anything to do with making it easier to afford college. Universities have been efficient in pocketing the subsidies by increasing tuition after every expansion of federal support. That's why education is a rare industry where prices have risen even faster than health-care costs. This is also the rare market where the recent trend of de-leveraging doesn't apply. An August report from the Federal Reserve Bank of New York found that Americans cut their household debt from a peak of $12.5 trillion in the third quarter of 2008 to a recent $11.4 trillion. Consumers have reduced their debt on houses, cars, credit cards and nearly everything except student loans, where debt has increased 25% in the three years.

* ...STUDENT DEBT HAS INCREASED 25% OVER THE PAST THREE YEARS ALONE!

[M]ost federal student loans are made without regard to income, assets or credit history.

* CONTEMPLATING DRINKING A BOTTLE OF DRANO*)

Much like the federal obsession to finance a home for every American regardless of ability to pay, the obsession to finance higher education for every high school student ignores inconvenient facts. These include the certainty that [most] of these kids will take jobs that don't [in any real as opposed to artificial sense] require college degrees and may not support timely repayment.

* INSANITY, FOLKS... INSANITY...!!!

For this school year, even the loans that pay on time aren't necessarily winners for the taxpayer. That's because of a 2007 law that Mr. Miller and Nancy Pelosi pushed through Congress - and George W. Bush signed - that cut interest rates on many federally backed student loans. Stafford loans, the most common type, have been available since July at a fixed rate of 3.4%, barely above the historically low rates at which the Treasury is currently borrowing for the long term.

* BUT, WAIT! THERE'S MORE!

The student loan rates are scheduled to rise back to 6.8% next year. But if our spendthrift government ends up borrowing money above 7% and lending it to kids at 6.8%, taxpayers will suffer even before the youngsters go delinquent.

(*BANGING MY HEAD AGAINST THE DESK*) (*AGAIN... AND AGAIN... AND AGAIN*)

Efforts to clean up this debacle are stirring on Capitol Hill, with House Republicans moving to limit Pell grants to students who have a high school diploma or GED. Oklahoma Sen. Tom Coburn would go further and have government leave the business of subsidizing the education industry via student loans and let private lenders finance college. That may be too radical at the moment, but it won't be if taxpayers ever figure out how much subsidized loans will cost them.

September 30, 2011 at 12:13 PM
William R. Barker said...

http://online.wsj.com/article/SB10001424053111904332804576538363789127084.html?mod=WSJ_Opinion_LEADTop

In past decades, tense political disputes over actual or projected fiscal deficits induced sharp increases in interest rates - particularly on long-term bonds.

* IN OTHER WORDS, BACK WHEN THE FEDERAL GOVERNMENT ALLOWED THE FREE MARKET MECHANISM TO WORK!

[A]fter the passage of ObamaCare in March 2010, long-term bond rates remained virtually unchanged at around 3%. This was despite great doubt about the law's revenue-raising provisions, and the financial press bemoaning open-ended Medicare deficits and the mandated huge expansion in the number of unfunded Medicaid recipients. Even with great financial disorder in the stock and commodity markets since late July 2011, today's 10-year Treasury bond rate has plunged below 2%.

* BECAUSE THE FED IS TOTALLY POLITICIZED AND ARTIFICIALLY HOLDS DOWN INTEREST RATES. (BTW - THIS GOES BACK TO THE BUSH YEARS, FOLKS; OBAMA AND GEITHNER HAVE SIMPLY EXCELERATED AND WORSENED THE TREND AND ITS DISASTEROUS OUTCOME.)

[T]he federal government faces no immediate market discipline for balancing its runaway fiscal deficits. Indeed, after President Obama finally received congressional approval to raise the debt ceiling on Aug. 2, followed by Standard & Poor's downgrade of Treasury bonds from AAA to AA+ on Aug. 5, the interest rate on 10-year Treasurys declined even further.

* FOLKS... UNDERSTAND... IN A VERY SENSE WE HAVE A FASCIST ECONOMY WHERE WHILE THE GOVERNMENT DOESN'T OWN THE MEANS OF PRODUCTION NOR DOES IT DIRECTLY DIRECT ALL BUSINESS DECISIONS, IT CERTAINLY EXERCISES VETO POWER AS WELL AS PROACTIVE "INFLUENCE" OVER EVERY FACET OF OUR NATION'S MODERN ECONOMY. THEY DO THIS NOT JUST BY REGULATION, BUT BY MANIPULATION OF INTEREST RATES, MONEY SUPPLY, AND LOAN DIRECTION. (*SHRUG*)

Since Alexander Hamilton established the market for U.S. Treasury bonds in 1790, they have been the fulcrum for the bond market as a whole. Risk premia on other classes of bonds are all measured as so many basis points above Treasurys at all terms to maturity. If their yields are artificially depressed, so too are those on private bonds. The more interest rates are compressed toward zero, the less useful the market becomes in reflecting risk and allocating private capital, as well as in disciplining the government.

* YEP!

* FOLKS... I KNOW THAT FOR SOME OF YOU THIS NEWSBITE IS A BIT... er... "TECHNICAL"... BUT BELIEVE ME... THESE GOVERNMENTAL POLICIES (AND NEVER BUY THE PROPAGANDA THAT THE FEDERAL RESERVE IS "INDEPENDENT") ARE DELIBERATELY DISTORTING MARKETS AND DELIBERATELY ACTING SO AS TO INTERFERE WITH REALITY-BASED ECONOMIC DECISION-MAKING AS OPPOSED TO POLITICALLY-INFLUENCE ECONOMIC DECISION-MAKING.

* FOLKS... READ THE FULL ARTICLE. IT'S SIMPLY TO LONG AND COMPLEX TO PROPERLY "BARKERIZE." IF THE LINK PROVIDED DOESN'T GET YOU PAST THE PAY WALL, TRY GOOGLING "RONALD MCKINNON" PLUS "WHERE ARE THE BOND VIGILANTES?"

September 30, 2011 at 12:56 PM
William R. Barker said...

http://hosted.ap.org/dynamic/stories/U/US_CLERIC_KILLED_RON_PAUL?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-09-30-10-34-45

Republican presidential candidate Ron Paul is condemning the Obama administration for killing an American born al-Qaida operative without a trial.

Paul, a Texas congressman known for libertarian views, says the killing of Anwar al-Awlaki on Yemeni soil amounts to an "assassination." Paul warned the American people not to casually accept such violence against U.S. citizens, even those with strong ties to terrorism.

Anwar al-Awlaki was considered one of the most influential al-Qaida operatives wanted by the United States. U.S. and Yemen officials say he was killed in a U.S. air strike targeting his convoy Friday morning.

Paul made the comments to reporters after a campaign stop Friday at Saint Anselm College in New Hampshire. He said America's leaders must think hard about "assassinating American citizens without charges."

* RON PAUL IS ABSOLUTELY RIGHT; IF EVER THERE WAS A SLIPPERY SLOPE... THIS IS IT.

September 30, 2011 at 1:49 PM
William R. Barker said...

http://www.washingtonpost.com/politics/chu-takes-responsibility-for-a-loan-deal-that-put-more-taxpayer-money-at-risk-in-solyndra/2011/09/29/gIQArdYQ8K_story.html?hpid=z1

Energy Secretary Steven Chu acknowledged Thursday making the final decision to allow a "struggling" solar company to continue receiving taxpayer money after it had technically defaulted on a $535 million federal loan guaranteed by his agency.

* "TECHNICALLY DEFAULTED." CUTE.

Chu spokesman Damien La­Vera said in a statement that the secretary approved the restructuring agreement for Solyndra because it gave the company “the best possible chance to succeed in a very competitive marketplace and put the company in a better position to repay the loan.”

* IT SEEMS TO ME THAT STEVEN CHU OWES THE AMERICAN PEOPLE $535 MILLION!

In April 2010, the company’s auditors raised doubts about whether the company could continue as a “going concern” because of cash-flow problems.

The following month, Obama visited the company to praise it as an “engine of growth.”

* THE... FOLLOWING... MONTH...

* FOLKS... YA CAN'T MAKE THIS SHIT UP!

In late autumn of 2010, company executives "confided" to the Energy Department that they were running out of cash and could not make a required payment to a cash-reserve account. The company was supposed to begin making the first of $5 million payments to create a $30 million cash reserve on Dec. 1. Solyndra officially defaulted on its loan that day.

* OR... SIMPLY TAKE OUT THE ADDED WORD "OFFICIALLY" AND REPORT IT STRAIGHT AS "SOLYNDRA DEFAULTED ON ITS LOAN THAT DAY."

* AGAIN, FOLKS... THE MSM... THEY'LL DO EVERYTHING IN THEIR POWER TO SKEW THEIR REPORTING THE DEMOCRAT'S WAY!

Chu approved a "softening" of the loan requirements so that the company could continue receiving loan installments.

* WELL WHY NOT?! I MEAN... IT'S NOT LIKE IT WAS HIS MONEY! IT'S NOT LIKE PISSING AWAY $535 MILLION IN TAXPAYER MONEY TO BENEFIT A POLITICALLY WELL-CONNECTED DEMOCRAT/OBAMA ALLY IS THE KIND OF THING THAT MIGHT GET AN OBAMA APPOINTEE IN HOT WATER... (*SMIRK*)

On Capitol Hill, Republicans continued to complain Thursday that the Obama administration and Chu had not protected taxpayers. “Why was the leadership at DOE so stubborn, ignoring every warning sign that Solyndra was a bad bet, continuing to throw good money after bad right up until Solyndra’s fate was sealed and taxpayers were left holding the bag on DOE’s $535 million bust?” said Rep. Cliff Stearns (R-FL), chairman of the House Energy and Commerce oversight and investigations subcommittee.

Some Democrats also have questioned Chu’s decision, including Rep. Henry A. Waxman (CA) the ranking Democrat on the Energy and Commerce Committee. Rep. Gene Green (D-TX) said Thursday that he wants to know why Chu restructured Solyndra’s loan to put taxpayers behind a group of private investors to be repaid if the company went bankrupt. (Two investors, including an equity fund tied to Kaiser, provided an additional $75 million to keep the company afloat.)

* GOOD FRIGG'N QUESTION, HUH...?!?!

“I guess I’m surprised that Secretary Chu made the decision earlier this year to give the private sector priority over the federal commitment, because [his] fiduciary duty is to the taxpayer, and not to an applicant.

* YA THINK...?!?!

* FOLKS... UNDERSTAND... THE OBAMA ADMINISTRATION IS USING THE FEDERAL TREASURY AS ITS OWN PRIVATE PIGGY BANK THIS ADMINISTRATION PLAYS BY CHICAGO RULES - HELP YOUR FRIENDS... HURT THE TAXPAYER.

September 30, 2011 at 2:12 PM

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