Financial Meltdown

Bailout Backlash blasts feckless CT freshman

Ads on the politics of bailing out Wall Street are starting to hit airwaves across America. This ad just went up today in CT criticising Financial Services Committee member Chris Murphy (D- CT)

This may draw blood for a variety of local reasons. First, Murphy's 2006 campaign to unseat 24-year Republican Nancy Johnson was relentless in attacking Johnson for allegedly raising too much money from special interests.

Of course, as soon as Murphy got in office he went to work shaking down the exact same people to build his own multimillion dollar warchest.

He actually winks at the hypocrisy---he told radio hosts Chaz & AJ on 99.1 WPLR that the would "pander to any special interest groups besides Yankee fans"

This maniacal money chase reached the absurd this week as Murphy decided to make common cause with former Republican Governor John Rowland to host a local fundraising event. This would have been a masterstroke for Murphy but for the small problem Rowland resigned his office over a corruption investigation.,0,7408215.story   Evidently, Murphy's alleged 2006 ethical purity did not survive contact with Congress.

The Cappiello ad also subtly points out that  Murphy has been financed by many of the same firms who have had his political mentor, Senator Chris Dodd, on retainer all these many years. Readers of this blog know what a train wreck this is going to be for Dodd. This week, the Hartford Courant started reporting how the wheels left the track,0,1341992.story

This Courant cartoon states the obvious. The financial meltdown is now the only issue in CT and here at least, some Dems have had to buy into it, big time.



Now Chris Murphy is neck deep in all this. I sure hope Nancy Johnson right about now has a nice glass of wine in her hand and a smirk on her face. 


The best Senate Banking Chairman money can buy

Front Page from CT largest's paper, the Hartford Courant

Senate Banking Committee Chairman Chris Dodd., D-Conn., right...

 Crumbling Financial Giants Gave Generously To Dodd

When a Democratic takeover of Congress put Christopher Dodd in charge of the powerful Senate Banking Committee, Connecticut's senior senator eagerly met with reporters, outlining his generally pro-industry positions, but pledging to put consumers — and the long-term health of the economy — first.

"At the end of my tenure on this committee," Dodd said in early 2007, "I want it to be said that the safety and soundness of our financial institutions was not weakened on my watch."

A year and a half later, Dodd acknowledges that the nation's finances are in an "economic maelstrom." And while Washington engages in an urgent search for after-the-fact fixes, there is also plenty of finger-pointing, and there are enduring questions about whether campaign cash — millions and millions in campaign cash — blinded Dodd and other overseers to the excesses of industry........

But now, some of Dodd's heartiest patrons have become the poster companies for the Wall Street implosion: AIG Insurance, Lehman Brothers, Merrill Lynch and Bear Stearns. And although Dodd has emerged in recent weeks as a key player in efforts to stabilize the economy, the five-term senator is also facing criticism that he and others in Washington did too little, too late to rein in those generous companies before the crash...........

I'm proud of my chairmanship," Dodd said in an interview Friday. He said he considered himself a pro-consumer lawmaker and said campaign cash plays no role in his thinking.

"It's an ugly system, and I hate it," Dodd said of the campaign-finance game. But he added, "I never have — nor would I ever — let a campaign contribution affect what I care about, what I champion, how I vote, how I hold hearings. Ever."


But although supporters see that as leadership, opponents call it opportunism.

They note, for example, that although Dodd amassed a strong rhetorical record on the housing crisis, it was not until 10 months ago that he introduced legislation aimed squarely at the industry, ....

But by then, the fatal damage was done. Bear Stearns had collapsed six months earlier, and in a matter of weeks after the bill became law, Lehman Brothers limped into bankruptcy court, and the federal government was compelled to bail out insurance firm AIG International and seize mortgage giants Fannie Mae and Freddie Mac.

All of those companies had put substantial money behind Dodd: more than $200,000 from PACs and employees of AIG in the past six years. Another $200,000 from Bear Stearns. And six-figure donations from Lehman and other companies now struggling under bad mortgage debt.

Of course, Dodd defends this record as consistent with his general philosophy

I'm not allergic to business. I'm not hostile at all," Dodd said at a December 2006 press conference as he took control of the Banking Committee.,0,3321771.story?page=1

Depends what business, Senator. You certaintly were very hostile to the telecommunications industry. Even shutting down the U.S. Senate to filibuster a bill to provide them immunity from lawsuits Connect the dots , my friends. The Telecoms only donated $22,000 to Dodd last cycle.   If you don't ante up, powerful Senators can be very  allergic to your business; especially if plantiff's trial lawyers have put a better bid on the table.

Take a good look at Senator Dodd. These are the people likely to be given carte blanche over our nation's economy in the immediate future---career politicians who are corporate socialists.

 I can only hope then we will be left with a few coins of change after they are done. 



Dissembling Dodd's Subprime Sob Story

The CT press was trying to make sense of the utter collapse of confidence in our financial markets this weekend.

So they went seeking the story from Senate Banking Committee Chairman Chris Dodd, who proceeded to make no sense at all.

Now Chris has a rather difficult task, since as I was told long ago being honest is easier than being deceitful, since it's hard to keep track of all your prior false statements.

Let's start with this one. 

   At the end of my tenure on this committee, I want it to be said that the safety and soundness of our financial institutions was not weakened on my watch," Dodd said.

Chris Dodd, February 15, 2007

Well, to his credit, he's not trying to claim that anymore, being objectively the least effective Banking Committee chairman since South Dakota's Peter Norbeck in 1929-1930.

Now on to today's whoppers

"I have supported reform of Fannie and Freddie for years,” Dodd said in the e-mail

The truth is Dodd and his allies engaged in a a concerted behind the scenes effort to gut reform efforts and then render the proposed reform bill too useless to pass. The words of Nixon's Attorney General, John Mitchell ring true here "watch what we do, not what we say",0,5673162.story

"In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill, and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation."

Conclusion: Falsehood #1


"comprehensive GSE reform only passed when Senator Richard Shelby and I worked together along with our counterparts in the House. This bill passed despite repeated veto threats from the White House and six filibusters by some recalcitrant Senate Republicans "

First, perhaps those "recalcitrant Senate Republicans" opposed socializing the risk of failed subprime lenders like Countrywide Financial. The Dodd theory of "GSE reform" was to make the taxpayer the world's largest subprime lender by adding $400 billion of bad debt to the leaky balance sheets of Fannie Mae and Freddie Mac, who were swamped before  this program was even implemented.{70633668-7A43-4F1C-9947-F45C323DC2F2}&dist=hplatest, or perhaps the $8 Billion ACORN slush fund was a wee bit problematic.

The real GSE reform came solely at the urging of Treasury Secretary Henry Paulson, who whaetver his flaws, seems like the only responsible adult grasping the gravity of this problem, starting in the fall of 2007 .{7B1D547E-4338-4E98-AA9F-F125C4FCAF07}&dist=hplatest when Dodd was busy campaigning for President in Iowa.

In fact. Dodd's original "housing rescue" (aka Countrywide Bailout bill) didn't even include GSE reform until Secretary Paulson made clear that was a nonnegotiable demand to get the President's signature. Of course, at the same time Paulson was trying to protect the financial markets, Dodd was running around pretending the protection was unnecessary .

 In a conference call with reporters this afternoon, Senate Banking Committee chairman Christopher Dodd (D-Conn.) said both GSEs are “very sound and strong,” noting the $3 billion of short-term debt that Freddie Mac sold earlier today. Mr. Dodd said the Treasury proposals should be added to the current housing legislation for expediency’s sake and noted that he may add provisions to the Treasury’s plan

Conclusion: Falsehood #2


I'm angry because, candidly, (for) 17 months ... I spent 65 hearings, most of which were done on this subject matter, pushing for the administration and others to work on work-outs for mortgages,” Dodd said Monday, between meetings on his revisions of Paulson's bailout provision. “That's the heart of the problem, and of course, the problem's only grown worse over 17 months, to the point where we are where we are today with this economic crisis

OK, Senator, you mouthed off a whole lot. But what did you do?

here's what the NY Times reported on March 23, 2007

Here's what happened after these hearings:

"But even as lawmakers expressed outrage at the problems being encountered by low-income homeowners, they signaled that they would not rush to impose new legislation on the industry.

Senator Christopher J. Dodd, Democrat of Connecticut and the chairman of the banking committee, said he did not know if new legislation was necessary, saying regulators could addresses most excesses under existing laws. "

Evidently the presence of Countrywide Financial's COO at the hearing calmed the ardor for a legislative response, eh?

Conclusion: Falsehood # 3 Yer Out!

Maybe we shouldn't be so hard on Dodd, between campaigning in Iowa and visiting his vacation home in Ireland,0,7481730.column  he just hasn't been able to keep up with the fiscal fiasco on Wall Street and in Washington.

It's been much easier to tell people there really isn't a problem.

Note : Kindly square these statements with today's revisionist claims that he was aware of the impending disaster prior to when it occurred. Not 

Thankfully, I am optimistic that the voters of CT will finally put an end to Chris Dodd's reign of error as lackey boy for any special interest throwing cash in his lap.  I think this is the sentiment in these parts these days. 

 "It wasn't a secret that this was going on, and had Congress done something to regulate this, it is not unreasonable to think we wouldn't have had the kind of collapse that we have had," Surrusco said.

You can't spin your way out of this one, Chrissie! We're onto you now!  Check the recent polling in CT

46% rated Dodd’s job performance as fair or poor, while 43% said he was doing an excellent or good job.,0,4404922.story

Time to "spend more time with my family"  mon frere


I'd like to answer Senator Dodd's question

 "Just tell me what your side wants," he said. "I can't negotiate with myself."

Well, having you quit the chairmanship of the Banking Committee would be a start

Newt Gingrich has the same reaction to this debacle as I have

Letting Chris Dodd try and fix the financial markets is like taking nutrition advice from Michael Moore 

Should Obama have agreed to postpone last night's debate

Now this is serious Saturday morning quarterbacking, but would Obama have been better off if he had  agreed with McCain to postpone the debate?

Since the market meltdown took hold a week or so ago, Obama's number have gone up or improved, while McCain's have slipped. No more irrational exuberance about NY or NJ being "in play" now.

Why? Because the narrative was about something McCain had substantially gotten past--discussing the shortcomings of the Bush administration. On this front, Obama had only to keep the story going to force McCain off message. And the story needed no input from Obama to keep going.

McCain's campaign suspension and return to DC was an acknowledgement that this problem was was not going to be maneuvered around, and dealing head on with the Bush/Paulson plan was the one viable approach to take. And once he was in DC, he needed to show a committment to spending time and effort on crisis resolution. 

So, given this, why wouldn't a debate delay have kept a good narrative for Obama alive a few more days.

Plus, with public sentiment running strongly against delaying the debate Obama could have made McCain pay a price here, begrudgingly acceding to the delay while casting McCain as the party "not ready to stand before the voters and defend his agenda". (So much for those town halls which were never scheduled). "It is unfortunate the disarray in the Republican party has now reached such a level that we can't even have debates, since they need Senator McCain to try and bail out the President on this issue". 

Mac could have been cast as the impediment here, in the "no good deeds go unpunished" department.

By the time the debate happened Obama would have enjoyed more good news cycles as the young man in a hurry, while casting McCain the janitor trying to clean up Bush's mess. And "Bush's mess" is the sole saleable rationale for swing voters to pick an inexperienced liberal Democrat.

Now the debate is the narrative, and whatever the punditocracy's assessment, it cannot be better for Obama than the narrative he had last week,

As an old real estate lawyer, I can tell you that you need to grasp in that business when the other side has accidently or unavoidably made a concession they are going to regret and say yes before they change their mind. But this is a skill set one does not need to write for the Harvard Law Review.



Brendan Loy, meet "Blackhedd"

Brendan Loy became a cultural icon by being the blogger who foresaw the unmitigated disaster that Hurricane Katrina was going to wreak on New Orleans, while city leaders kept Bourbon Street bars open and left buses in low lying parking lots to get flooded.

"Blackhedd" at RedState has been the play-by-play announcer for the Wall Street meltdown. He's called virtually every pothole days before they were hit.  And he seems very worried about the next 48 hours

I hope this is not the Katrina he fears, but what if it?

I would suggest that if Reid and Pelosi send Congress home with no deal and there's a stock market crash, the public may well decide what Bush had behind Door #1 was a hell of lot better than what we are facing.

McCain's surprise campaign suspension might prove prescient in that event.

Incumbents who were off the "target list" may suddenly find underfunded challengers viable vehicles of voter rage. 

Long term, the Democrats have clearly abandoned Robert Rubin economics, which was deried as "Eisenhower economics" (what was wrong with that?) There is no effort at all to control spending growth, and we will inevitablity be baking in the cake the conditions for stagflation---high commodity inflation and high long term interest rates, with dollar depreciation thrown in for good measure.

If we needed to have a Democrat in the White House, repealing the 22nd Amendment to bring back Bubba would be preferable to electing any numbskull in the Democratic senate caucus today. 

The Bargain for the Bailout

The bottom line is it may be impossible for 150 Republicans in the House and 40 in the senate to vote "No" on this bizarre bailout bill.

Evidently Harry Reid and Nancy Pelosi are making clear: No bipartisan cover, no bailout.

As we learned from the 1995 government shutdown, the press can and will blame Republicans for bad consequences, and provide no credit at all for showing any principles. (indeed, a lack of principles is how a Republican tends to get good press).

It's still a miserable deal, since we can be damm sure the Democrats will hang this on any Republican "aye" vote for years, while their people skulk away. and why not--no one on their side took any responsibility for the mess

So, my suggestions is we ask for our own cover.

Some prominent Democrats must demonstrate a level of responsibility for this disaster before Republicans allow themselves to be roped into looking like die hard Dubya loyalists.

The quid: The chairman of the Senate and House Banking Committees---Chris Dodd and Barney Frank--must relinquish their chairmanships as a condition for Republican yes votes on the bailouts.    

And there's a completely nonpartisan reason for demanding this. In 2009 we will have a new President and a new Secretary of the Treasury. The executive branch will have fresh blood who did not create this debacle (perhaps they ignored it, but...whatever) 

The people who are hopelessly compromised by their roles in Congress must step aside as well to demonstrate to America that people on Capitol Hill get the same message 

Everyone---both parties---both branches of government---is going out the door who "managed" the banking system.

For equity's sake, we can have the ranking Republicans on each committee quit too.

America needs a fresh set of folks who will have the responsiblity for getting ourselves out of this mess. It can;t be the same people who created the mess. They now have zero credibility.

And America deserves both parties accepting a share of the blame for what went wrong.

Are the egos of Chris Dodd and Barney Frank more important than our economy's future?

As Spike Lee said, Do the Right Thing

Time Magazine's Glass House

Time magazine's cover story is "How Wall Street ripped off America"

OK. There's a case to be made.

I'm not sure Time and its parent company are the most credible messenger, though

Since they've lost 80% of their share value since 1999, it's not like they've been rewarding their investors, now have they?;range=my;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

The clear economic vision of Senator Chris Dodd

A huge hat tip to CT blogger Councilman Tim White, who uncovered political double talk from Senator Chris Dodd that establishes a new zenith in prevarication

Dodd on the Bear Stearns Bailout


Dodd is chairing a hearing later this morning to examine the events surrounding the Bear Stearns bailout. "I think they made the right decision," Dodd said in a television interview. (WSJs Market Watch, by Greg Robb) - Senator Chris Dodd on April 3, 2008

Dodd said he opposed the government's decision to guarantee the sale of Bear Stearns to JPMorgan Chase in March. (Courant, by Eric Gershon) - Senator Chris Dodd on Sept 16, 2008


Well, Senator, I'm glad we can depend on your clear vision on how to set our economy right, now can;t we?

Senator Kerry is now looking for royalties, Chris, since you are stealing his act


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