Monday, July 20, 2009
Charles F. Huber II: 12/30/1929--7/12/2009
Charles F. Huber, II, of Bloomfield, CT, born in West Hartford on December 30, 1929, son of Thomas C. and Dorothy (Yost) Huber and a descendant of Mayflower colonists and Revolutionary War and Civil War officers. Charlie's valiant heart stopped on July 12, 2009 after a year and a half courageous battle with cancer. The term sui generis has never been more aptly applied than to Charlie, who lived a life filled with laughter and enthusiasm, a perennial 20-year-old undergraduate reluctantly inhabiting a progressively aging body. An acknowledged expert on early jazz, Charlie was an intimate of Jazz greats such as Louis Armstrong, Eddie Condon and their contemporaries. He attended the Kingswood Country Day School, Choate and the scene of his happiest days--Princeton University, from which he graduated in 1951. He attended University of Pennsylvania Law School and NYU Graduate School of Business. His army service was spent in the National Security Agency and he was a member of the Association Of Former Intelligence Officers. Following military service he embarked on a life in corporate finance, eventually becoming a managing director of William D. Witter and Associates and a principal in numerous leveraged buy-outs. He became a long-time resident of Greenwich, where his riotous parties with music provided by prominent Jazz musicians became legendary. He was Chairman of the Board of Transnational Industries (now Evans and Sutherland Computer Corporation) and Merrimac Industries. His conservative political views found respectful attention in GOPAC of which he was an active member and associate of some of today's most prominent political figures. He was a prodigious writer for various conservative publications. 1992-1995, he traveled throughout Russia with Krieble Associates, lecturing to large, appreciative audiences on entrepreneurship and capitalism. An avid traveler, he joined numerous Princeton Alumni groups journeying through Europe. Until his illness prevented him, he never missed a Princeton reunion or football game. He was a member of numerous social and political organizations including Greenwich's Belle Haven Club, Hartford Golf Club, The Princeton Club (N.Y.) and GOPAC. He leaves his only sibling and beloved sister, Susan Northrup Huber (Mrs. Howard) Gross of West Hartford; his nieces, Melinda Ottmann and Wendy Wassell and grandniece, Jennifer Ottmann all of Farmington; his stepchildren, Thomas Demas (Charlotte, NC), Daphne Ghriskey (Pound Ridge, NY) and George Demas (NYC). Charlie's family wishes to acknowledge with gratitude the effective care given to him by Drs William Lehmann, Paul Guardino and Mary King; the staff at Caleb Hitchcock Rehab Center and his tireless caregiver, Rosemary Anane. Most of all, words cannot express the gratitude our family feels toward his most devoted caregiver and the person Charlie relied upon more than anyone during his last year and a half: Frances "Kim" Hayden (and her wonderful family). Charlie loved and appreciated beyond description, Kim's warmth, humor, compassion, and care. There will be no calling hours. Burial at West Hartford's Fairview Cemetery will be private. In lieu of flowers, donations may be made to a charity of the donor's choice. Taylor and Modeen Funeral Home, West Hartford, CT has care of arrangements.
Monday, November 3, 2008
Apres Moi Le Deluge
The pitter pat of “happy feet” grows louder; Barack Obama nears the White House. His mentor, the communist poet Frank Wilson, smiles. Sol Alinsky taught the Ivy League graduate the marvels of socialism and introduced him to money. Bill Ayers and his wife Bernardine Dohrn, both terrorist founders of the “Weathermen” with bombings to prove it, controlled millions.
Walter Annenberg left part of his great wealth in the hands of the far left. Ayers was the man. Ayers brought a new first to education—eliminating math, English and history. He introduced a radical view of education by stroking a socially oppressed student body. No administrative skills required. Competition was undemocratic. Violence used when necessary for political aims. Barack Obama can carry this message.
South side Chicago was restive. The elder Mayor Daley’s successor created a euphemism—“Chicago Style Politics.” Obama was a community organizer who David Axelrod, a master at manufacturing proletariat support for politicians, recognized as a power base leader to be elected ‘Chicago style’. This required the disqualification of all of his democratic opponents by pre-registration infractions. Obama WON the senate seat, UNOPPOSED!
The issue for Obama became visibility and wealth. Rezko, the jail bound real estate developer, financed his election to the Illinois Senate. Obama voted present 132 times, avoiding all major issues. Rezko found the Obamas a mansion.
Obama also needed a platform. Reverend Wright and Pfleger were the religious teachers. Not political idealists, they were respected couriers of a religious populism which South Chicago accepted and clerics praised. Christ was black and when resurrected, will right the wrongs that white society has visited on its black brothers.
The political mantra was housing for the poor, the poorer, the better. Control Fannie Mae and Freddie Mac and control the banking system. Get Countrywide Mortgage CEO Angelo Mozilo and you control marketing. But where is the money?
Enter Barney Frank (D-MA), Chris Dodd (D-CT), Dick Durbin (D-IL), Harry Reid (D-NV), John Kerry (D-MA), Chuck Schumer (D-NY), Bernie Sanders (D-VT), and Nancy Pelosi (D-CA). The church was filling. ‘Juice’ was required. Engel and Hoffman at Fannie Mae and Freddie Mac wrote mortgages without collateral or income verification. They made millions for themselves. Hedge funds losing equity capital welcomed a new product. Swaps were not contracts and could be regulated. Wall Street took off. Credit swaps!
A close relative was making $250,000 a year and looking down his nose. “I never heard of a derivative or credit swap—please explain.” Three hours later, I know nothing! I was forced to ask, “How much money do your customers make?” Silence! “What is the take of the syndicators?” More silence! “What do your principals earn?” Silence, once again. He left for Fisher’s Island. Wall Street was in the tank.
Under Perry Hall of Morgan Stanley, Gus Levy of Goldman, Bill Salomon of Salomon Brothers, other firms Kuhn-Loeb, Kidder-Peabody, Loeb-Rhodes, Lehman, Dean Witter all were partnerships. Partnership capital is at risk. They were intrinsically conservative and risk averse.
Then Merrill Lynch cut out the profit for partners by allowing negotiated commission rates. Partners cashed out. Under the euphemism of public ownership, public money replaced partnership equity and Harvard Business School grads—with no skin (money) in the game took over. Fast money replaced investment and housing was the vehicle.
Obama’s men prospered. Yet when the bubble burst, they stood unscathed. Stock commissions now down 80% to 90% were replaced by product nobody understood.
The collapse was near. Neophytes sang with the voice of Enrico Caruso and nobody understood.
Bush’s preppy band had disarmed the Iraqi army. Al-Qaida created a civil war. Tommy Franks’s brilliant victory was forgotten. Vietnam was not. War was again the issue. Obama, an underdog to Hillary, found the internet. Money and organization flowed. Values nearly caught on with McCain/Palin but were drowned out by Obama money. Kalide emerged. Obama was raised a Muslim. Kalide was a pal of Farrakhan. Does anybody care?
To Republicans, Romney looked like a banker, Guiliani a cop, Huckabee a hillbilly, and John McCain a relic. The Denver Coliseum with Obama’s pillars signaled a change. McCain found Palin.
Not political, she epitomized Middle America. Her assets: honesty, patriotism, the resurgence of the soccer mom, and her loyalty to John McCain. Then came the credit crisis. Obama would raise taxes and McCain would cut them off. Seventy years ago, my grandfather predicted that the only way out of a credit crisis was a capital levy. Everyone gives 25% to 50% of what they own to the government. The credit crunch called for a ‘bail out’—private money to repay the government debt. Joe-the-plumber saw what was happening. McCain/Palin got a new breath.
Are we at the point where the ‘have nots’ eat the ‘haves’? Anyone owning assets must run to McCain. Obama, Pelosi, Reid and Frank have announced they want your money. Even the 40% non-taxpaying voter realizes that his Social Security check, Major Medical, state and local taxes, are all bearing down on him. How will he vote?
Obama’s speeches are reminiscent of Hitler’s Mein Kampf. Artfully said so that no one understands him.
This black proponent of socialism, mesmerizing through his words, makes us think of Huey Long and Hitler. Remember their fate.
Walter Annenberg left part of his great wealth in the hands of the far left. Ayers was the man. Ayers brought a new first to education—eliminating math, English and history. He introduced a radical view of education by stroking a socially oppressed student body. No administrative skills required. Competition was undemocratic. Violence used when necessary for political aims. Barack Obama can carry this message.
South side Chicago was restive. The elder Mayor Daley’s successor created a euphemism—“Chicago Style Politics.” Obama was a community organizer who David Axelrod, a master at manufacturing proletariat support for politicians, recognized as a power base leader to be elected ‘Chicago style’. This required the disqualification of all of his democratic opponents by pre-registration infractions. Obama WON the senate seat, UNOPPOSED!
The issue for Obama became visibility and wealth. Rezko, the jail bound real estate developer, financed his election to the Illinois Senate. Obama voted present 132 times, avoiding all major issues. Rezko found the Obamas a mansion.
Obama also needed a platform. Reverend Wright and Pfleger were the religious teachers. Not political idealists, they were respected couriers of a religious populism which South Chicago accepted and clerics praised. Christ was black and when resurrected, will right the wrongs that white society has visited on its black brothers.
The political mantra was housing for the poor, the poorer, the better. Control Fannie Mae and Freddie Mac and control the banking system. Get Countrywide Mortgage CEO Angelo Mozilo and you control marketing. But where is the money?
Enter Barney Frank (D-MA), Chris Dodd (D-CT), Dick Durbin (D-IL), Harry Reid (D-NV), John Kerry (D-MA), Chuck Schumer (D-NY), Bernie Sanders (D-VT), and Nancy Pelosi (D-CA). The church was filling. ‘Juice’ was required. Engel and Hoffman at Fannie Mae and Freddie Mac wrote mortgages without collateral or income verification. They made millions for themselves. Hedge funds losing equity capital welcomed a new product. Swaps were not contracts and could be regulated. Wall Street took off. Credit swaps!
A close relative was making $250,000 a year and looking down his nose. “I never heard of a derivative or credit swap—please explain.” Three hours later, I know nothing! I was forced to ask, “How much money do your customers make?” Silence! “What is the take of the syndicators?” More silence! “What do your principals earn?” Silence, once again. He left for Fisher’s Island. Wall Street was in the tank.
Under Perry Hall of Morgan Stanley, Gus Levy of Goldman, Bill Salomon of Salomon Brothers, other firms Kuhn-Loeb, Kidder-Peabody, Loeb-Rhodes, Lehman, Dean Witter all were partnerships. Partnership capital is at risk. They were intrinsically conservative and risk averse.
Then Merrill Lynch cut out the profit for partners by allowing negotiated commission rates. Partners cashed out. Under the euphemism of public ownership, public money replaced partnership equity and Harvard Business School grads—with no skin (money) in the game took over. Fast money replaced investment and housing was the vehicle.
Obama’s men prospered. Yet when the bubble burst, they stood unscathed. Stock commissions now down 80% to 90% were replaced by product nobody understood.
The collapse was near. Neophytes sang with the voice of Enrico Caruso and nobody understood.
Bush’s preppy band had disarmed the Iraqi army. Al-Qaida created a civil war. Tommy Franks’s brilliant victory was forgotten. Vietnam was not. War was again the issue. Obama, an underdog to Hillary, found the internet. Money and organization flowed. Values nearly caught on with McCain/Palin but were drowned out by Obama money. Kalide emerged. Obama was raised a Muslim. Kalide was a pal of Farrakhan. Does anybody care?
To Republicans, Romney looked like a banker, Guiliani a cop, Huckabee a hillbilly, and John McCain a relic. The Denver Coliseum with Obama’s pillars signaled a change. McCain found Palin.
Not political, she epitomized Middle America. Her assets: honesty, patriotism, the resurgence of the soccer mom, and her loyalty to John McCain. Then came the credit crisis. Obama would raise taxes and McCain would cut them off. Seventy years ago, my grandfather predicted that the only way out of a credit crisis was a capital levy. Everyone gives 25% to 50% of what they own to the government. The credit crunch called for a ‘bail out’—private money to repay the government debt. Joe-the-plumber saw what was happening. McCain/Palin got a new breath.
Are we at the point where the ‘have nots’ eat the ‘haves’? Anyone owning assets must run to McCain. Obama, Pelosi, Reid and Frank have announced they want your money. Even the 40% non-taxpaying voter realizes that his Social Security check, Major Medical, state and local taxes, are all bearing down on him. How will he vote?
Obama’s speeches are reminiscent of Hitler’s Mein Kampf. Artfully said so that no one understands him.
This black proponent of socialism, mesmerizing through his words, makes us think of Huey Long and Hitler. Remember their fate.
Tuesday, September 30, 2008
Mark to Market Torpedoes Paulson
Paulson uses Sarbanes-Oxley to grab power for Goldman-Sachs’ Wall Street at the expense of Main Street. The key is mark to market. Rising assets, marked to market, cause euphoria. Falling assets, marked to market, cause panic. Paulson uses this panic to enrich himself. Main Street voted NO. Let banks determine fair market value based on proven accounting methods.
Reinstate up-tick rules and stop hedge funds from bludgeoning stocks by false rumors. Government cannot legislate common sense or morality. These qualities spring from Main Street, not K Street in Washington.
Bush stuck with Defense Secretary Rumsfeld for too long and paid the price. He must fire Paulson and find another Petraeus. Go back to fundamentals.
Reinstate up-tick rules and stop hedge funds from bludgeoning stocks by false rumors. Government cannot legislate common sense or morality. These qualities spring from Main Street, not K Street in Washington.
Bush stuck with Defense Secretary Rumsfeld for too long and paid the price. He must fire Paulson and find another Petraeus. Go back to fundamentals.
The Democrats' Dilemma/McCain's Opportunity
Eyewitnesses say Thursday’s meeting at the White House featured Obama speaking for the Democrats while McCain was silent. Phones rang off their hooks with both Republican and Democrat all opposing the Paulson bill. McCain deputized Boehner and Blount to block the bill and protect taxpayers. Paulson would protect financial institutions.
Pelosi, with all the votes necessary for passage, did not want to be held accountable for a $700 billion bail-out.
Congressmen of both parties answered their phones. Almost ten-to-one of the callers cried foul—urging a vote of NO.
No one mentioned Mozillo of Countrywide, who bought and paid for Raines and Hoffman who ran Fannie Mae and Freddie Mac. Nor were Chris Dodd and Barney Frank mentioned. Both were elbow-deep in payoffs. All were chin-deep in ego. All were champions of sub-prime lending.
Chris Cox does not understand accounting. Sarbanes-Oxley required posting mark to market. The rating agencies blessed the original false ratings. The Wall Street firms and banks gained from this prolifigacy. They are now punished by the downturn.
The blame lies with the politicians--Obama, Frank, and Cox—and their cohorts who got rich through Fannie Mae and Freddie Mac, along with Tom Reid, Nancy Pelosi, Dick Durbin, Charles Schumer, and the Chicago gang. They bankrolled Obama. The Ivy League which looks down on the man in the street, a President preoccupied with Iraq, and the bit players obscured the real villains—who cashed in on free money from government-based mortgage lenders. Now they will pay!
Pelosi, with all the votes necessary for passage, did not want to be held accountable for a $700 billion bail-out.
Congressmen of both parties answered their phones. Almost ten-to-one of the callers cried foul—urging a vote of NO.
No one mentioned Mozillo of Countrywide, who bought and paid for Raines and Hoffman who ran Fannie Mae and Freddie Mac. Nor were Chris Dodd and Barney Frank mentioned. Both were elbow-deep in payoffs. All were chin-deep in ego. All were champions of sub-prime lending.
Chris Cox does not understand accounting. Sarbanes-Oxley required posting mark to market. The rating agencies blessed the original false ratings. The Wall Street firms and banks gained from this prolifigacy. They are now punished by the downturn.
The blame lies with the politicians--Obama, Frank, and Cox—and their cohorts who got rich through Fannie Mae and Freddie Mac, along with Tom Reid, Nancy Pelosi, Dick Durbin, Charles Schumer, and the Chicago gang. They bankrolled Obama. The Ivy League which looks down on the man in the street, a President preoccupied with Iraq, and the bit players obscured the real villains—who cashed in on free money from government-based mortgage lenders. Now they will pay!
Friday, September 26, 2008
The Ivy League Gets Trumped!
Paulson, Bernanke, and Bush hatched a brilliant plan. It was not a bailout. It did not hook taxpayers. It would have worked. It has the backing of Frank, Schumer, Dodd, Reid, Pelosi, Rangel, Johnson, and Raines, former head of Freddie Mac and Ginnie--all the Democrats who caused this mess! Badly communicated by back door dealing, it was misunderstood by the public, who saw the guilty getting off the hook. It did not address the core problem. Sarbanes Oxley, a complicit SEC, rating agencies, a foolish mark to market rule and others.
With mail running 500-plus to one against Republicans, house members revolted. Senators Shelby and DeMint saw the writing on the wall.
Senator McCain responded. He kept his powder dry at the White House. Now he will get a bill which blows Frank and Dodd (along with their fellow travelers), out of the water. McCain will be our next President.
With mail running 500-plus to one against Republicans, house members revolted. Senators Shelby and DeMint saw the writing on the wall.
Senator McCain responded. He kept his powder dry at the White House. Now he will get a bill which blows Frank and Dodd (along with their fellow travelers), out of the water. McCain will be our next President.
Why We Must Vote for McCain
The Paulson plan is not a bailout. Bailouts get criminals out of jail prior to trial. Neither is it a grab of taxpayer money to rescue Wall Street moguls. Rather, it is a means to reverse the perverse accounting rules which caused the originators of bad loans and face immediate bankruptcy by enticing entrepreneurs to participate in a restructuring of the credit behind these loans. A $700 billion cost to taxpayers is ridiculous.
A simple example: Bank A grants a $100,000 dollar mortgage to client B who has no capital and little income. Bank A books the mortgage as an asset on his balance sheet at fair market value held to maturity. Anticipating interest payments, this asset may be posted at more than $100,000. Suddenly, payments stop. The house stands. Accounting rules change. Bank A must mark this asset to market. There is no market. If the bank forecloses, The fair market value disappears. The value of houses in the neighborhood declines. Bank A’s credit rating is compromised. It is now in violation of equity rules.
Paulson intervenes. The government buys the house for $25,000, close to the fire sale price and sells it for $40,000 to an entrepreneur—establishing a new fair market value. Bank A now has $25,000 where it had nothing. Its balance sheet is marginally repaired. Entrepreneur B sells the house to new owner C for $60,000, who posts collateral and shows income capable of repaying the mortgage.
The government gets its money back. A new mortgagor has made a sound investment. Bank A has survived the credit crunch. The only losers may be the displaced borrowers who do not participate in the refinancing. These former residents must rent or become part of that small group of homeless. Society survives.
How did all this happen?
Wall Street in 1956 was ruled by Perry Hall at Morgan Stanley, Gus Levey at Goldman, and Bill Solomon at Solomon Brothers, who ran very tight ships. Their capital was private. They, with partners, took all the risks. By controlling this risk, they enjoyed handsome incomes.
Research boutiques and specialty underwriters invaded their turf. Merrill Lynch, envious and losing market share, inveighed negotiated commission rates.
Commissions paid by burgeoning mutual funds and asset management groups fell from 1% or more per transactions to one-tenth of a percent. The old partners retired and pulled their capital. Many firms failed. DuPont, Goodbody, Reynolds, Dean Witter, Glore Forgan merged. They were replaced by new publicly financed firms.
These firms raised capital from the newly popular mutual funds and investment advisors plus willing individual investors enjoying the rising markets of the seventies.
The old regulations worked when the few partnership owners feared loss of their capital. The new managers had no such capital at risk—they enjoyed free participation from public investors intoxicated by the rising value of the bull market.
A new political class—egalitarian, environmental, espousing private rights—abetted by courts legislating circumvention of the Constitution.
Rights were assured from abortion to home ownership. The more rights granted, the richer were the politicians. Earmarks for votes. Well intentioned Barney Frank, Dick Durbin, Nancy Pelosi, Boxer, Sanders, Kennedy, and Carey—the list goes on—all wanted goodies for their constituents. These excesses created deficits. Social Security was stuffed with IOUs. Government teetered. When excesses threatened home ownership, the economy hit the fan.
Mortgages are contracts. They generally require an up-front deposit, a stream of payments and evidence of collateral and income. These requirements eventually caught the attention of politicians. What could they do? Fannie Mae and Freddie Mac came to the rescue. The implied or explicit guarantee of government mortgages was granted. Everyone was entitled to a home, regardless of income or capital.
How to sell these mortgages became the art form of a new breed on Wall Street—the hedge funds, the syndicators, the bundlers. Bunching thousands of mortgages into debt packages and then splitting these packages into disparate parts—income, principal, front and back end and selling these parts worldwide, opacity was created sufficient to dumbfound the public, avoid the regulators and confuse the rating agencies. The Dutch tulip mania was reborn.
The public woke up as the ceiling fell in. Paulson and Bernanke got the job of clean-up.
The 2008 election pits the opponents of leveraging versus the advocates of cheap money. Here McCain and Obama are a perfect match.
For McCain, five and a half years tortured and imprisoned in the Hanoi Hilton may have broken his body but strengthened his spirit. He emerged not a politician, but a statesman—perhaps analogous to Winston Churchill who was anything but a popular conservative in the 1930s.
Native intelligence and sense of smell enabled him to see through the miasma of Washington. Home loans to those with little income to repay seemed improper—Barney Frank, Chris Dodd, Fannie Mae and Freddie Mac notwithstanding.
Loans of taxpayer money syndicated to make it impossible to trace ownership were unreal. Syndication meant obfuscation.
Add to this a media 10-to-1 supporting his opposition candidate using the modern internet to tag funds from the least informed of the populace while supported by the brightest of Ivy League intellectuals we realize what a long shot McCain became.
Read Don Luskin’s Trend Macrolytics, LLC from June 2088 to present and discover the lies the Obama machine propagates. We are not in recession or headed for depression! Unemployment is not threatening. Productivity is rising. Business has readjusted to globalism. Protectionism is a fear, not a solution.
Obama on the other hand, with an Ivy League education, is enticed to Chicago by Saul Alinsky, a far left reformer. There he allied with Bill Ayers, founder of the Weathermen and the avowed terrorists of the 1960s, and financed by the Annenberg Foundation. As chairman, he renounced private education, even public, favoring instead courses in social activism and revolt in place of math, English, and science. He recently stated he would save workers but not shareholders! What a disaster for 401K holders. As chairman of the CAC, he claimed education must stoke resistance to the American system!
Obama, the Pericles of the left, is not mid-stream. He’s on the left bank.
McCain will make a lot of mistakes. He was wrong about short selling. He was wrong about drilling for oil. He was wrong about Chris Cox. He should praise George Bush for winning in Iraq and thank Paulson for saving the economy. The list goes on. But, his selection of Sarah Palin trumps all of his mistakes.
Palin captures the soul of America at its best. Love of family. Faith in church. Patriotism without exception. Truth in law rather than ACLU relativism. Belief in the men on the street, not the mob of the street. Absence of coalitions of gender, race or nationality.
If McCain/Palin sometimes fails on specifics, they bond on integrity and common sense. Against the smug self-righteousness of Yale, Harvard, Princeton intellectualism, comes the straight-from-the-shoulder, no nonsense pragmatism of the Teddy Roosevelt era.
McCain/Palin stand for change not to a new and more sophisticated socialism, but back to the democracy of our forebearers.
Let the commentators be damned. Obama is the Huey Long of twenty-first century politics. John McCain is the George Washington.
A simple example: Bank A grants a $100,000 dollar mortgage to client B who has no capital and little income. Bank A books the mortgage as an asset on his balance sheet at fair market value held to maturity. Anticipating interest payments, this asset may be posted at more than $100,000. Suddenly, payments stop. The house stands. Accounting rules change. Bank A must mark this asset to market. There is no market. If the bank forecloses, The fair market value disappears. The value of houses in the neighborhood declines. Bank A’s credit rating is compromised. It is now in violation of equity rules.
Paulson intervenes. The government buys the house for $25,000, close to the fire sale price and sells it for $40,000 to an entrepreneur—establishing a new fair market value. Bank A now has $25,000 where it had nothing. Its balance sheet is marginally repaired. Entrepreneur B sells the house to new owner C for $60,000, who posts collateral and shows income capable of repaying the mortgage.
The government gets its money back. A new mortgagor has made a sound investment. Bank A has survived the credit crunch. The only losers may be the displaced borrowers who do not participate in the refinancing. These former residents must rent or become part of that small group of homeless. Society survives.
How did all this happen?
Wall Street in 1956 was ruled by Perry Hall at Morgan Stanley, Gus Levey at Goldman, and Bill Solomon at Solomon Brothers, who ran very tight ships. Their capital was private. They, with partners, took all the risks. By controlling this risk, they enjoyed handsome incomes.
Research boutiques and specialty underwriters invaded their turf. Merrill Lynch, envious and losing market share, inveighed negotiated commission rates.
Commissions paid by burgeoning mutual funds and asset management groups fell from 1% or more per transactions to one-tenth of a percent. The old partners retired and pulled their capital. Many firms failed. DuPont, Goodbody, Reynolds, Dean Witter, Glore Forgan merged. They were replaced by new publicly financed firms.
These firms raised capital from the newly popular mutual funds and investment advisors plus willing individual investors enjoying the rising markets of the seventies.
The old regulations worked when the few partnership owners feared loss of their capital. The new managers had no such capital at risk—they enjoyed free participation from public investors intoxicated by the rising value of the bull market.
A new political class—egalitarian, environmental, espousing private rights—abetted by courts legislating circumvention of the Constitution.
Rights were assured from abortion to home ownership. The more rights granted, the richer were the politicians. Earmarks for votes. Well intentioned Barney Frank, Dick Durbin, Nancy Pelosi, Boxer, Sanders, Kennedy, and Carey—the list goes on—all wanted goodies for their constituents. These excesses created deficits. Social Security was stuffed with IOUs. Government teetered. When excesses threatened home ownership, the economy hit the fan.
Mortgages are contracts. They generally require an up-front deposit, a stream of payments and evidence of collateral and income. These requirements eventually caught the attention of politicians. What could they do? Fannie Mae and Freddie Mac came to the rescue. The implied or explicit guarantee of government mortgages was granted. Everyone was entitled to a home, regardless of income or capital.
How to sell these mortgages became the art form of a new breed on Wall Street—the hedge funds, the syndicators, the bundlers. Bunching thousands of mortgages into debt packages and then splitting these packages into disparate parts—income, principal, front and back end and selling these parts worldwide, opacity was created sufficient to dumbfound the public, avoid the regulators and confuse the rating agencies. The Dutch tulip mania was reborn.
The public woke up as the ceiling fell in. Paulson and Bernanke got the job of clean-up.
The 2008 election pits the opponents of leveraging versus the advocates of cheap money. Here McCain and Obama are a perfect match.
For McCain, five and a half years tortured and imprisoned in the Hanoi Hilton may have broken his body but strengthened his spirit. He emerged not a politician, but a statesman—perhaps analogous to Winston Churchill who was anything but a popular conservative in the 1930s.
Native intelligence and sense of smell enabled him to see through the miasma of Washington. Home loans to those with little income to repay seemed improper—Barney Frank, Chris Dodd, Fannie Mae and Freddie Mac notwithstanding.
Loans of taxpayer money syndicated to make it impossible to trace ownership were unreal. Syndication meant obfuscation.
Add to this a media 10-to-1 supporting his opposition candidate using the modern internet to tag funds from the least informed of the populace while supported by the brightest of Ivy League intellectuals we realize what a long shot McCain became.
Read Don Luskin’s Trend Macrolytics, LLC from June 2088 to present and discover the lies the Obama machine propagates. We are not in recession or headed for depression! Unemployment is not threatening. Productivity is rising. Business has readjusted to globalism. Protectionism is a fear, not a solution.
Obama on the other hand, with an Ivy League education, is enticed to Chicago by Saul Alinsky, a far left reformer. There he allied with Bill Ayers, founder of the Weathermen and the avowed terrorists of the 1960s, and financed by the Annenberg Foundation. As chairman, he renounced private education, even public, favoring instead courses in social activism and revolt in place of math, English, and science. He recently stated he would save workers but not shareholders! What a disaster for 401K holders. As chairman of the CAC, he claimed education must stoke resistance to the American system!
Obama, the Pericles of the left, is not mid-stream. He’s on the left bank.
McCain will make a lot of mistakes. He was wrong about short selling. He was wrong about drilling for oil. He was wrong about Chris Cox. He should praise George Bush for winning in Iraq and thank Paulson for saving the economy. The list goes on. But, his selection of Sarah Palin trumps all of his mistakes.
Palin captures the soul of America at its best. Love of family. Faith in church. Patriotism without exception. Truth in law rather than ACLU relativism. Belief in the men on the street, not the mob of the street. Absence of coalitions of gender, race or nationality.
If McCain/Palin sometimes fails on specifics, they bond on integrity and common sense. Against the smug self-righteousness of Yale, Harvard, Princeton intellectualism, comes the straight-from-the-shoulder, no nonsense pragmatism of the Teddy Roosevelt era.
McCain/Palin stand for change not to a new and more sophisticated socialism, but back to the democracy of our forebearers.
Let the commentators be damned. Obama is the Huey Long of twenty-first century politics. John McCain is the George Washington.
Monday, September 15, 2008
Oil, Obama & McCain
Obama would commit forces to Afghanistan and Pakistan. The Russians learned that Afghanistan cannot be tamed. Poppies are the cash crop, bought and processed worldwide by various mafia organizations. We should outbid the competition for poppies, and process them to create pain killers for our elderly. No battlefield casualties. If the Pakistani army cannot control its northern provinces, military intervention by the United States is wishful thinking. Would we bomb localities controlled by terrorists? Are we willing to accept the political risk?
Obama likes oil substitutes. Will he open the doors to Brazilian gasahol? The middle east has cheap oil which they sell to intermediaries. The United States should grant offshore drilling rights, claiming ownership of the oil. That ownership is then sold to the drillers and marketers.
Our oil industry grew by generous depletion allowances. Our cattle industry grew by generous depreciation allowances. These tax breaks from a friendly government drew in the capital necessary for these industries to grow.
What is the point of clean energy in the United States when Russia, China, India, and the rest of the world burn oil? To control the price of oil we must be the world's largest source. Ban ethanol--embrace Brazilian gasahol. Let free markets work. Substitutes must compete on a price basis.
Obama, like Stalin who nationalized agriculture, can only create shortages. Free markets will work if the environmentalists can be tamed!
McCain/Palin affirm reality. They deny the dreams and claims of neophytes who ask for our votes so they can speculate on solutions they cannot define. McCain/Palin know that only cheap oil can draw entrepreneurial capital for substitutes. That is the reality--a reality the media cannot accept.
Obama likes oil substitutes. Will he open the doors to Brazilian gasahol? The middle east has cheap oil which they sell to intermediaries. The United States should grant offshore drilling rights, claiming ownership of the oil. That ownership is then sold to the drillers and marketers.
Our oil industry grew by generous depletion allowances. Our cattle industry grew by generous depreciation allowances. These tax breaks from a friendly government drew in the capital necessary for these industries to grow.
What is the point of clean energy in the United States when Russia, China, India, and the rest of the world burn oil? To control the price of oil we must be the world's largest source. Ban ethanol--embrace Brazilian gasahol. Let free markets work. Substitutes must compete on a price basis.
Obama, like Stalin who nationalized agriculture, can only create shortages. Free markets will work if the environmentalists can be tamed!
McCain/Palin affirm reality. They deny the dreams and claims of neophytes who ask for our votes so they can speculate on solutions they cannot define. McCain/Palin know that only cheap oil can draw entrepreneurial capital for substitutes. That is the reality--a reality the media cannot accept.
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