Wednesday, November 18, 2009

Show a Little Backbone America

The same party that is pushing for military tribunals to try and convict Khalid Sheik Mohamed rather than try him in Federal Courts in NYC are the same party that are now not confident to allow the military justice system enough time to investigate, try and convict Maj Hasan, the shooter that went on a rampage at Ft. Hood Texas.

The same party that breathlessly speaks of endless wars and the courage of our country is now trying to stoke fear in the minds of Americans when talk of housing Guantanamo detainees in a Supermax facility in Illinois comes up.


It's time for Democratic leaders to stand up to this petty fear mongering and let the American population know we won't cower to the fear terrorists hope to bestow upon us.

It appears President Obama and AG Eric Holder have done just that in an article by the Associated Press this morning.

In the article, Obama stated "I think this notion that we have to be fearful that these terrorists possess some special powers that prevent us from presenting evidence against them, locking them up and exacting swift justice, I think that has been a fundamental mistake." In the same article President Obama declared 'those offended by the legal privileges being given to Mohammed by trying him in a civilian court ultimately won’t find it "offensive at all when he’s convicted and when the death penalty is applied to him."

Eric Holder echoed this sentiment when he said “We need not cower in the face of this enemy...Our institutions are strong, our infrastructure is sturdy, our resolve is firm, and our people are ready.”

That's what I'm talking about.

Cleaning out this legal mess left by the previous administration is going to be a cumbersome process since many of the detainees were treated in ways that violated both the Geneva Convention and The United Nations Convention Against Torture signed and championed by Ronald Reagan. I don't think many realize the legal minefield Cheney set. It could take decades to unwind this mess.

Trying and convicting these criminals is all part of it and every American should find the courage in them to stand behind the laws and courts of this country and have faith in our justice system to either put these cowards behind bars indefinitely or execute them.

Tuesday, November 17, 2009

Nixon Bows to Mao

What a Socialist, Communist, Marxist appeaser Nixon was!

Sunday, November 1, 2009

When Did The Housing Bubble Start?

There has been plenty of blame to go around lately as to who is responsible for the burst. Conservatives seem quick to try and lay blame on a combination of obscure statements Barney Frank made while in the minority and had no control over which legislation came to vote in the committee and the Community Reinvestment Act of 1977 which encouraged lending agencies to lend to low to medium income individuals. Some even like to jump to the conclusion that Fannie and Freddie were primarily responsible when it's clearly reported they played a minimal role in the collapse.

One of the more accurate accurate depictions I've run across of exactly what happened to cause the final burst is this Jonathan Jarvis video, The Crisis of Credit. It explains how the large investment firms perpetuated the massive bubble by encouraging lending to just about anyone to keep the revenue momentum flowing.

There were some players that profited greatly off of the downturn as noted by Michael Lewis, the author of Liars Poker, who discussed the scandals of 1980's Wall Street bond market. Michael Lewis recently chronicled how Goldman Sachs and Deutche Bank worked to short housing markets overwhelmingly invested in by Merryl, Lehman and UBS in his Nov. 11, 1009 article in, entitled The End.

On Nov. 1, 2009, McClatchy has reported that Goldman Sachs peddled more than 40 billion (that's 40 with nine of these 0). GS has been at the forefront of this crisis.

Just to wrap up these last two paragraphs. Goldman Sachs basically assisted in perpetuating the bubble then profited greatly on the crashing bubble. You've got to give it to them. They came out ahead of just about everyone. It's a shame they couldn't have given their ex-CEO Henry Paulson, head of the SEC during the crash, a heads up.

Maybe this fiasco could have been prevented.

Maybe they all really didn't realize just how much global exposure there was to CDO's and the AAA bonds they created that were being invested into from banks to individuals to firms managing retirement funds. But I doubt it. But this is not why I wrote this article. I wrote it because I wanted to get to the bottom of when did the housing bubble start.

At around the time of the crash, I got curious as to when this housing bubble began. I ran across this chart. It's clear the bubble began around 1997. I then used the trustworthy Google to see if there was any significant tax code passed or financial laws passed that may have accounted for this.

I ran across a law that fit my requirements to a T. A law that no doubt helped millions of Americans to sell their homes and upgrade to even larger ones at savings never seen in modern times. A law that changed the behavior of home owners from one of buying a home to live in to buying a home as a future investment, only to be sold years later at record profits. This was repeated over and over by millions of people across the United States. The law was the part of the Taxpayer Relief Act of 1997. A certain provision of this law allowed for profits of home sales to be tax free at levels of 250k for individuals and 500k to couples.

I am not the first person to suggest this. After doing some research it appears others have come to this conclusion. Vernon Smith, a Nobel Laureate in Economics and Professor at George Mason University. Mr. Smith wrote an article for the WSJ calling this the Clinton housing bubble.

Now, I'm not saying I won't benefit greatly from this tax code in the event I choose to sell nor that this tax has undoubtedly benefited millions of Americans across the U.S. What I am saying in this. This tax code, unbeknownst to those signing off on it, created one of the largest bubbles in our economy in modern times that ended up turning into a crash so large it almost took the worlds financial systems with it when the bubble burst.

Crisis averted for now. Question is, will someone be watching for the next bubble?