Romney Is Now Crushing Obama On Wall Street

The financial industry abandoned President Barack Obama's reelection campaign in the third quarter of the year, according to data released by the Federal Election Commission, flocking to former Massachusetts Gov. Mitt Romney.

Candidate disclosure records compiled by the Center for Responsive Politics show Romney out-raising Obama with the financial services industry $3,561,783 to $1,643,149 so far this cycle. Obama, who is facing criticism for his role in passing the Dodd-Frank regulatory bill and his plans to increase taxes on the rich, raised over $15 million from the industry in the 2008 campaign.

Texas Gov. Rick Perry, who is barred from taking donations from many on Wall Street due to conflict of interest regulations, has raised $375,275 from the financial industry.

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Super-Secret Military Drones Are The Obama Administration's Favorite Weapon

The Drone Wars are the new black.

The once covert, highly-secretive and little talked about strategy of using unmanned aerial vehicles to target suspected terrorists in Pakistan and elsewhere has gone mainstream.

And now everyone is talking about it.

Even Leon Panetta, the former C.I.A. director, whose old agency doesn't officially admit that its drone program exists, is talking about it.

Twice in a matter of hours last week he joked about the C.I.A.'s penchant for deploying the ominously-named Predator drones.

“Obviously I have a hell of a lot more weapons available to me here than I had at the C.I.A.,” he said, referring to his new post as secretary of defense. “Although the Predators aren’t bad.”

Complete coverage: The Drone Wars [3]

Later that same day, on the tarmac of a naval air base, he said, coyly, that the use of Predators are “something I was very familiar with in my old job.” Soon after, a Predator armed with Hellfire missiles took flight from the runway, bound for Libya.

It might have been a joke, but he wasn't joking — Panetta oversaw a dramatic increase in the use of drones during his tenure as C.I.A. director. And its a trend that has continued. Drones are now operated by the C.I.A. and the U.S. military in Afghanistan, Pakistan, Iraq, Yemen, Libya and Somalia.

The Predator and Reaper drones are armed with both missiles and high-powered cameras, allowing a “pilot,” based tens of thousands of miles away, to analyze in detail his target, without ever having to go into battle himself.

They have become the favorite weapon of the administration of U.S. President Barack Obama. The U.S. government now operates two drone programs, to varying degrees of transparency, accountability and success. One is directed by the U.S. military, which is publicly acknowledged and operates in declared war zones, like Iraq, Afghanistan and Libya.

The military also operates drones in undeclared war zones in Somalia [4] and Yemen [5]. The other is directed by the C.I.A. and is not publicly acknowledged, operating primarily in Pakistan [6], although it has recently stepped up operations in Yemen as well. It was a C.I.A.-operated drone that killed U.S.-born Yemeni cleric, and Al Qaeda promoter, Anwar al-Awlaki last month.

Although the first strike by an armed drone took place in Pakistan in 2004 under then-president George W. Bush, it's Obama who fully embraced the technology. Under Obama's watch, in fact, the number of drone strikes has increased exponentially.

The Drone Wars: Is it legal? [7]

The U.S. government doesn't make public its own accounting of how many attacks have taken place, or how many people have been killed in those attacks. But in an analysis of press reports by GlobalPost, which is an estimate at best, there were more than 30 strikes on Pakistan during Obama's first year in office, up from a total of about 13 strikes in all the years between 2004 and 2007.

And the numbers continue to inflate from there. In 2009, there were about 54 attacks, all also in Pakistan. In 2010, the war expanded to include Yemen, and there were a total of 122 strikes. So far this year, there have been 81 strikes in Pakistan, Somalia and Yemen combined.

That doesn't include Afghanistan, Iraq or Libya, where the drones are being used in a declared conflict.

The rationale, U.S. officials say, is simple. The drones allow the United States to seek out its disparate enemies in parts of the world where its soldiers, and the soldiers of the host country, are unable or unwilling to reach. Pakistan's tribal areas, a haven for Al Qaeda and Taliban militants, are only nominally under the control of the Pakistani government and its own military is hardly able to operate there, let alone the U.S. military.

GlobalPost in North Waziristan: Obama's Hidden War [8]

The same goes for parts of Yemen and Somalia.

The drones can also hit very specific targets, minimizing civilian casualties. A U.S. official familiar with the government's counter-terrorism operations said that compared to the way the United States and others waged war in World War II or Vietnam, the drones are a major improvement. The official noted that the technology allows the military, or the C.I.A., to examine a single house for days, to be sure of its target and to destroy the house without damaging anything around it.

Few would deny that targeted drones are preferable to carpet bombing, but their accuracy is reliant on accurate intelligence. And more than once the United States has gotten it wrong — perhaps most tragically on Oct. 30, 2006, when an errant drone strike obliterated an Islamic boarding school in Chenagai, Pakistan, killing 82 people.

There was also the the killing in Yemen in 2010 of Jabr Al-Shabwani, a popular deputy governor, also by an errant drone strike.

Despite official claims that using real-time imaging allows operators of drones to know in detail both before and after an attack who, and how many, they have killed, the U.S. government has at times identified the wrong man.

The Drone Wars: The humans behind the technology [9]

U.S. and Pakistani officials announced on June 3, for instance, that Ilyas Kashmiri, Al Qaeda's operational commander in Pakistan, had been killed in a drone strike. Six others were killed in the same attack. It was the second time Kashimri was reported to be killed. He was also pronounced dead in a similar attack in 2009. Mohammad Omar, the leader of the Taliban, was also twice reported killed in a drone strike. And the list goes on.

Such confusion has led to speculation that more civilians are being killed in the strikes than is being reported by the United States. The Bureau of Investigative Journalism, a nonprofit organization based in London, has attempted an accounting of all the civilians killed [10] in Pakistan since the covert drone war began in 2004. Based on press accounts and local sources, the Bureau estimates that between 385 and 775 civilians have so far been killed in Pakistan alone, many of them children.

The killing of civilians and the disruption of life in regions targeted by drones has given rise to concerns that the strikes are driving a whole new generation of people, frustrated by the U.S. incursion on their lives, to the side of the militants. Indeed, some disturbing strategies are being used by the C.I.A. in Pakistan, including the targeting of funerals being held just hours after an initial attack. Large protests against the U.S. drone war in Pakistan, Somalia and Yemen have become a regular occurrence.

Still, the governments of all three countries have tacitly allowed the United States to continue the program, and the drones have met with success — a number of senior Al Qaeda and Taliban militants have been killed by drones, and they have become one of the most successful weapons in the war on terror.

If it’s a good policy to eliminate Al Qaeda, the U.S. official said, then you have to look at the best way to do that. And the drones are just one tool in the toolbox.

Links:
[1] http://www.globalpost.com/news/regions/asia-pacific/pakistan
[2] http://www.globalpost.com/bio/peter-gelling
[3] http://www.globalpost.com/special-reports/drone-wars
[4] http://www.globalpost.com/dispatch/news/regions/africa/111007/drone-wars-somalia-al-shabaab-cia
[5] http://www.globalpost.com/dispatch/news/regions/middle-east/111007/drone-wars-yemen-unrest-protests-aqap-al-qaeda
[6] http://www.globalpost.com/dispatch/news/regions/asia-pacific/pakistan/111007/drone-wars-pakistan-cia
[7] http://www.globalpost.com/dispatch/news/regions/asia-pacific/pakistan/110822/drone-wars-legal-law-pakistan-yemen-al-qaeda
[8] http://www.globalpost.com/dispatch/news/regions/asia-pacific/pakistan/110520/al-qaeda-osama-bin-laden-north-waziristan
[9] http://www.globalpost.com/dispatch/news/business-tech/technology-news/110824/drone-wars-technology-uavs-mit-surveillance
[10] http://www.thebureauinvestigates.com/category/projects/drones/
[11] http://www.globalpost.com/Drone-war-timeline
[12] http://www.globalpost.com/news/regions/asia-pacific/afghanistan
[13] http://www.globalpost.com/news/war/afghanistan-war
[14] http://www.globalpost.com/news/regions/africa
[15] http://www.globalpost.com/section/al-qaeda
[16] http://www.globalpost.com/section/libya
[17] http://www.globalpost.com/section/somalia
[18] http://www.globalpost.com/section/yemen
[19] http://www.globalpost.com/news/war/conflict-zones
[20] http://www.globalpost.com/news/regions/middle-east/iraq
[21] http://www.globalpost.com/news/war/military
[22] http://www.globalpost.com/news/war
[23] http://www.globalpost.com/news/regions/middle-east

This post originally appeared at GlobalPost.

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CAIN: Black Community Was 'Brainwashed' Into Voting For Obama

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Herman Cain, the upstart 2012 GOP candidate, said Wednesday that the black community has been "brainwashed" into voting Democrats into office.

In an interview with CNN tonight, the former Godfather's Pizza CEO, said that African Americans have been told not to consider conservative points of view.

"I have received some of that same vitriol simply because I am running for the nomination as a conservative," Cain said. "So it's just brainwashing and people not being open-minded, pure and simple."

Cain added that the notion that all African Americans will vote for President Obama in 2012 is "not necessarily true." He said he believes he could get a third of the black community to vote for him, conceding this assumption was "based on my own anecdotal feedback."

Cain, once considered a marginal candidate in the 2012 race, has been surging since his victory in the Florida Straw Poll last weekend. A Fox News poll released today has Cain in third place with 17%, behind former Massachusetts Gov. Mitt Romney and Texas Gov. Rick Perry.

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Now 62% Of Americans Think Obama Is Doing A Lousy Job On The Economy--And They Hate His Jobs Plan

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President Obama was dealt a horrible hand when he stepped into office in the middle of the worst recession since the Great Depression.

But when next year's election rolls around, there's no question who will be held responsible.

And the latest poll numbers from Bloomberg aren't looking good for the President.

President Obama's "job approval" rating is now down to 45%--a record low53% of "independents" disapprove of his performance62% of Americans disapprove of his handling of the economyOnly 36% of Americans approve of Obama's job-creation effortsOnly 30% approve of his response to the budget deficitOnly 39% approve of his approach to healthcareOnly 40% of Americans think Obama's new jobs package will work56% of "independents" think the jobs package will not work46% of "independents" say they definitely won't vote for ObamaOnly 21% say they will definitely vote for him (In 2008, Obama got 52% of the independent vote)

Since World War 2, no incumbent American president has won re-election with the unemployment rate above 7.2%. It's now 9.1%.

See more at Bloomberg >

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Obama On 10th Anniversary Of 9/11: "We Kept That Faith; We Took A Painful Blow, And Emerged Stronger"

Image: AP Photo/Charles Dharapak

In his first remarks on the 10th anniversary of attacks of September 11, 2001, President Barack Obama remembered was has changed since that fateful day, and celebrated was hasn't.

After reading Psalm 46 at the dedication of the 9/11 memorial in New York City, and visiting memorials at the Pentagon and the field in Shanksville, PA where United Flight 93 was brought down, Obama addressed a memorial service at the Kennedy Center to testify to the resilience of the American people.

"More than monuments, that will be the legacy of 9/11 – a legacy of firefighters who walked into fire and soldiers who signed up to serve; of workers who raised new towers, citizens who faced down fear, and children who realized the dreams of their parents," he said. "It will be said of us that we kept that faith; that we took a painful blow, and emerged stronger."

Read his remarks below:

The Bible tells us – “weeping may endure for a night, but joy cometh in the morning.” 

Ten years ago, America confronted one of our darkest nights. Mighty towers crumbled. Black smoke billowed up from the Pentagon. Airplane wreckage smoldered on a Pennsylvania field. Friends and neighbors; sisters and brothers; mothers and fathers; sons and daughters – they were taken from us with heartbreaking swiftness and cruelty. On September 12, 2001, we awoke to a world in which evil was closer at hand, and uncertainty clouded our future.

In the decade since, much has changed for Americans. We’ve known war and recession; passionate debates and political divides. We can never get back the lives we lost on that day, or the Americans who made the ultimate sacrifice in the wars that followed.

Yet today, it is worth remembering what has not changed. Our character as a nation has not changed. Our faith – in God and each other – that has not changed. Our belief in America, born of a timeless ideal that men and women should govern themselves; that all people are created equal, and deserve the same freedom to determine their own destiny – that belief, through test and trials, has only been strengthened.

These past ten years have shown that America does not give in to fear. The rescue workers who rushed to the scene; the firefighters who charged up the stairs; the passengers who stormed the cockpit – these patriots defined the very nature of courage. Over the years we have also seen a more quiet form of heroism – in the ladder company that lost so many men and still suits up to save lives every day; the businesses that have rebuilt; the burn victim who has bounced back; the families that press on.

Last spring, I received a letter from a woman named Suzanne Swaine. She had lost her husband and brother in the Twin Towers, and said that she had been robbed of, “so many would-be proud moments where a father watches their child graduate, or tend goal in a lacrosse game, or succeed academically.” But two of her daughters are in college, the other doing well in high school. “It has been ten years of raising these girls on my own,” Suzanne wrote. “I could not be prouder of their strength and resilience.” That spirit typifies the American family. And the hopeful future for those girls is the ultimate rebuke to the hateful killers who took the life of their father.

These past ten years have shown America’s resolve to defend its citizens, and our way of life. Diplomats serve in far off posts, and intelligence professionals work tirelessly without recognition. Two million Americans have gone to war since 9/11. They have demonstrated that those who do us harm cannot hide from the reach of justice, anywhere in the world. America has been defended not by conscripts, but by citizens who choose to serve – young people who signed up straight out of school; guardsmen and reservists; workers and business-people; immigrants and fourth-generation soldiers. They are men and women who left behind lives of comfort for two, three, four, or five tours of duty. Too many will never come home. Those that do carry dark memories from distant places, and the legacy of fallen friends. 

The sacrifices of these men and women, and of our military families, reminds us that the wages of war are great; that while their service to our nation is full of glory, war itself is never glorious. Our troops have been to lands unknown to many Americans a decade ago – to Kandahar and Kabul; to Mosul and Basra. But our strength is not measured in our ability to stay in these places; it comes from our commitment to leave those lands to free people and sovereign states, and our desire to move from a decade of war to a future of peace.

These ten years have shown that we hold fast to our freedoms. Yes, we are more vigilant against those who threaten us, and there are inconveniences that come with our common defense. Debates – about war and peace; about security and civil liberties – have often been fierce. But it is precisely the rigor of these debates, and our ability to resolve them in a way that honors our values, that is a measure of our strength. Meanwhile, our open markets still provide innovators with the chance to create, our citizens are still free to speak their minds, and our souls are still enriched in our churches and temples, our synagogues and mosques. 

These past ten years underscore the bonds between all Americans. We have not succumbed to suspicion and mistrust. After 9/11, President Bush made clear what we reaffirm today: the United States will never wage war against Islam or any religion. Immigrants come here from all parts of the globe. In the biggest cities and the smallest towns, in our schools and workplaces, you still see people of every conceivable race, religion and ethnicity – all of them pledging allegiance to one flag; all of them reaching for the same American dream – e pluribus unum, out of many, we are one.

These past ten years tell a story of resilience. The Pentagon is repaired, and filled with patriots working in common purpose. Shanksville is the scene of friendships forged between residents of that town, and families who lost loved ones there. New York remains a vibrant capital of the arts and industry, fashion and commerce. Where the World Trade Center once stood, the sun glistens off a new tower that reaches toward the sky. Our people still work in skyscrapers. Our stadiums are filled with fans, and our parks full of children playing ball. Our airports hum with travel, and our buses and subways take millions where they need to go. Families sit down to Sunday dinner, and students prepare for school. This land pulses with the optimism of those who set out for distant shores, and the courage of those who died for human freedom.

Decades from now, Americans will visit the memorials to those who were lost on 9/11.  They will run their fingers over the places where the names of those we loved are carved into marble and stone, and wonder at the lives they led. Standing before the white headstones in Arlington, and in peaceful cemeteries and small-town squares in every corner of our country, they will pay respects to those lost in Afghanistan and Iraq. They will see the names of the fallen on bridges and statues; at gardens and schools.

And they will know that nothing can break the will of a truly United States of America. They will remember that we have overcome slavery and Civil War; bread lines and fascism; recession and riots; Communism and, yes, terrorism. They will be reminded that we are not perfect, but our democracy is durable, and that democracy – reflecting, as it does, the imperfections of man – also gives us the opportunity to perfect our union. That is what we honor on days of national commemoration – those aspects of the American experience that are enduring, and the determination to move forward as one people.

More than monuments, that will be the legacy of 9/11 – a legacy of firefighters who walked into fire and soldiers who signed up to serve; of workers who raised new towers, citizens who faced down fear, and children who realized the dreams of their parents. It will be said of us that we kept that faith; that we took a painful blow, and emerged stronger.

“Weeping may endure for a night, but joy cometh in the morning.”

With a just God as our guide, let us honor those who have been lost; let us rededicate ourselves to the ideals that define our nation, and let us look to the future with hearts full of hope. May God bless the memory of those we lost, and may God Bless the United States of America.

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Maxine Waters Calls On Obama To Take On 'Gangsta' Banks

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Controversial congresswoman Maxine Waters is stirring it up again this week, this time by urging President Obama to use his "bully pulpit" to rein in "gangsta" banks.

"It's time for the bully pulpit of the White House to bring the gangsters in, put them around the table and let them know that if they don't come up with loan modifications and keep people in their homes that they've worked so hard for, we're going to tax them out of business," Waters said at a Congressional Black Caucus event in Los Angeles.

The comment comes just a week after the California congresswoman told the Tea Party to "go straight to hell." She also recently said that the Congressional Black Caucus is "getting tired" of covering for the President.

Waters currently faces a Congressional ethics investigation into allegations that she improperly helped secure bailout funds for a bank that was hit hard by its investments in Fannie Mae and Freddie Mac. Waters's husband owned stock in the bank.

Video below.

h/t The Hill

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Obama Administration Scales Back Economic Growth Projection, Remains More Optimistic Than Wall Street

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The White House Office of Management and Budget released its mid-session review (MSR) of the economy and the federal budget today — blaming volatility for a slower recovery.

Using data from June OMB predicted 3.3% GDP growth in 2012 and unemployment at 8.3 percent, but an "alternative" forecast that uses the latest data projects real GDP growth of 2.6% and the unemployment rate hovering at 9%. 

The numbers are roughly in-line with what the Congressional Budget Office projected last month — a forecast that was widely criticized as being too optimistic.

The projections far outpace those of Wall Street. Goldman Sachs is expecting just 2.1% GDP growth and 9.25% unemployment in 2012, while JP Morgan sees just 1.3% GDP growth and 9.5% unemployment.

Council of Economic Advisers Member Katharine Abraham said the alternative forecast, which includes the latest economic data, was included to reflect how the economic outlook has changed in the last month due to increased volatility in the markets.

Since Obama presented his budget in February, OMB says the debt ceiling bill and other legislation have saved $1.45 trillion from being added to the federal debt next year. But even with the additional $1.5 trillion to be cut by the "super committee" later this year, deficits over the next decade will rack up $5.76 trillion in debt — or $6.78 trillion if the Bush tax cuts on high income wage-earners are continued.

Office of Management and Budget Director Jacob Lew said, "The MSR largely confirms what we already knew — and what CBO already released — it underscores that we need to get back on a sustainable path, and that we need to invest in long-term economic growth and job creation."

Read the full Mid-Session Review here:

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Obama Requests Joint Session Of Congress To Present Jobs Plan; Same Night As GOP Debate

President Barack Obama sent a letter to Speaker of the House John Boehner and Senate Majority Leader Harry Reid requesting a Joint Session of Congress on September 7th at 8pm to present his economic growth plan to the nation.

Obama writes that it is his intention "to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work, and putting more money in the paychecks of the Middle Class and working Americans, while still reducing our deficit and getting our fiscal house in order."

Obama's announcement conflicts with a long-scheduled debate between the Republican presidential candidates at the Reagan Library sponsored by NBC and POLITICO.

Asked whether the White House chose the date to coincide with the GOP presidential debate, White House Press Secretary said "No, of course not."

Carney added that the primary focus of the speech will be "the immediate need for job creation," but added that Obama would also discuss deficit reduction and the growing federal debt.

House and Senate lawmakers must pass a "concurrent resolution" authorizing the joint session of Congress — a procedural formality.

Obama's letter:

Dear Mr. Speaker: (Dear Mr. Leader:)
Our Nation faces unprecedented economic challenges, and millions of hardworking Americans continue to look for jobs. As I have traveled across our country this summer and spoken with our fellow Americans, I have heard a consistent message: Washington needs to put aside politics and start making decisions based on what is best for our country and not what is best for each of our parties in order to grow the economy and create jobs. We must answer this call.

Therefore, I respectfully request the opportunity to address a Joint Session of Congress on September 7, 2011, at 8:00 p.m. It is my intention to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work, and putting more money in the paychecks of the Middle Class and working Americans, while still reducing our deficit and getting our fiscal house in order. It is our responsibility to find bipartisan solutions to help grow our economy, and if we are willing to put country before party, I am confident we can do just that.

Thank you for your consideration.

Sincerely,

Barack Obama

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New Obama Economist Alan Krueger Thinks We Don't Need Unions Anymore

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As Neil Munro points out, the cases where incoming Obama economist Alan Krueger agrees with Democratic orthodoxy–the cases the Republican National Committee is emphasizing–aren’t as intriguing as the instances where he’s disagreed.

My favorite so far is this 1992 paper on unionism, which reviews surveys of union and non-union workers and concludes that the decline in union membership between 1977 and 1991 resulted from a “decline in demand for unionization” especially a decline in the percentage of nonunion workers who “would vote for union representation.”

And why the decline in demand?

Our brief analysis suggests that nonunion workers are more likely to report being satisfied with their jobs in 1984 and 1992 than in 1977. … Another possibility is that … the services unions provide are no longer perceived as valuable by nonunion workers …. [E.A.]

Now I’m confused. 

Ezra Klein assured me it was all due to heavy-handed and illegal tactics by union-busting employers. … P.S.:  Since then, of course, much-publicized private-sector union organizing efforts have reversed this trend. You could probably write the same paper today. …

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Obama Seeks The Ultimate Free Lunch For Housing, And It's A Bank Bailout In Disguise

Mike "Mish" Shedlock Mish is an investment advisor at Sitka Pacific Capital. He writes the widely read Mish's Global Economic Trend Analysis.

President Obama is in Fantasyland or in some alternate universe. He wants to strengthen the housing market provided

The plan helps a broad swath of homeownerThe plan stimulates the economyThe plan costs next to nothing

So says the New York Times in U.S. May Back Refinance Plan for Mortgages

The Obama administration is considering further actions to strengthen the housing market, but the bar is high: plans must help a broad swath of homeowners, stimulate the economy and cost next to nothing.

One proposal would allow millions of homeowners with government-backed mortgages to refinance them at today’s lower interest rates, about 4 percent, according to two people briefed on the administration’s discussions who asked not to be identified because they were not allowed to talk about the information.

A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere. But such a sweeping change could face opposition from the regulator who oversees Fannie Mae and Freddie Mac, and from investors in government-backed mortgage bonds.

Investors may suspect a plan is in the works. Fannie and Freddie mortgage bonds had been trading well above their face value because so few people were refinancing, keeping returns on the bonds high. But those bond prices dropped sharply this week.

Uninspiring Nonsense

Frank E. Nothaft, the chief economist at Freddie Mac, said the federal action could instill confidence.

"It almost seems to me you want to have some type of announcement or policy, program or something from the federal government that provides that clear signal that we are here supporting the housing market and this is indeed a good time to really consider buying," Mr. Nothaft said.

Quite frankly that is idiotic as one of my readers noted in an email. That government needs to step in and artificially support housing prices is not inspirational.

Moreover, two tax credits that blew up just proved it.

The idea that you can do something at no cost to fix the housing market is pure lunacy. I am not sure which of the following terms applies best

Holy Grail of HousingFree LunchPerpetual Motion DeviceFountain of YouthPain with No Gain

I like number 1 best, but 1, 2, and 5 are solid choices.

The Keynesian clowns are of course very supportive of the general idea, led this time by Treasury Secretary Geithner and Christopher J. Mayer, an economist at the Columbia Business School.

Mayer says "This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing"

Mayer is obviously another believer in various free lunch ideas that cost nothing but will save housing.

Tom Lawler (on Calculated Risk's site) slammed some of these ideas back in July in Lawler: “Slam-Dunk” Stimulus? MS = Missing Something!!!!

The last few paragraphs of the article are rather interesting.

The government has already encouraged some refinancing through the Federal Housing Administration and through Fannie and Freddie, but participation is limited. For example, the Home Affordable Refinance Program excludes homeowners who owe more than 125 percent of the value of their house. To spur more refinancing, the government may decide to encourage Fannie and Freddie to lift such restrictions.

But government officials cautioned that Fannie and Freddie do not do the administration’s bidding, even though they are essentially owned by taxpayers.

A broader criticism of a refinancing expansion is that it would not do enough to address the two main drivers of foreclosures: homes worth less than their mortgages, and a sudden loss of income, like unemployment. American homeowners currently owe some $700 billion more than their homes are worth.

Got That?

Fannie and Freddie are owned by US taxpayers. The Obama administration wants to dump all of these proposals on the backs of taxpayers, perhaps without addressing the problem that "American homeowners currently owe some $700 billion more than their homes are worth."

Supposedly this can be done at "little to no cost".

Obama is either too dumb to see what's going on or he simply does not care what it costs to buy votes. I believe both.

Bank Bailout in Disguise

Depending on precisely how the proposal is implemented, the effect may be to take poor performing loans off the balance sheets of banks and hedge funds and dump the risks squarely on the backs of taxpayers via Fannie and Freddie.

It's no wonder Geithner supports it.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

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