After spending hundreds of billions to bail them out, the federal government is now turning on the big banks it once protected. Earlier this month, the Federal Housing Finance Agency launched a broad legal assault on 17 major banks, claiming the banks misled Fannie Mae and Freddie Mac in misrepresenting the quality of mortgage-backed securities. The FHFA’s lawsuit is a new attempt on the part of the federal government to recoup from big banks some of the taxpayer money lost during the financial crisis. Banks named in the action include Bank of America, J.P. Morgan Chase, Goldman Sachs, Morgan Stanley, Citigroup, and Deutsche Bank.
In a separate action, the feds went on a second offensive against Goldman Sachs, with the Federal Reserve — newly empowered as a financial regulatory and enforcement body, besides being a central bank — initiating legal action against the investment bank, claiming Goldman had exhibited “a pattern of misconduct and negligence” in its issuing of mortgage-backed loans.
Did you listen to Barack Obama’s speech to a joint session of Congress on September 8? Remember? It had to be squeezed in after the Republican debate but before the start of the professional football season.
What, you decided to skip it? You weren’t alone. While I haven’t seen any stats from the various survey companies, I suspect Obama’s speech was one of the least-viewed presidential addresses. When it comes to presidential promises to revive the economy, I suspect the public mood has gone from “let’s hear what he’ll do” to “I don’t believe a word of it.”
The very first sentence in the lead story in the Wall Street Journal the next day referred to Obama’s peroration as “what might be the White House’s last chance to change its political fortunes before the 2012 campaign kicks into high gear.”
What a bunch of hooey. The President’s speech didn’t presage a campaign stump speech; it was a campaign stump speech. In fact, it was little more than a 50-minute infomercial — except without the attractive models or clever graphics.
If the European Union begins to disintegrate, what signs would portend its spiral into disunion? One would be a member nation utterly ignoring the financial rules intended to support the EU by providing false and misleading information about its economy — actions already undertaken by both Greece and Portugal. Another indication of impending EU disintegration would be a member state simply printing its own euros — after only technically meeting the requirement of notification — as did Ireland a few months ago.
Or the European Union might dissolve as European society itself is breaking down with the rise of both radical Islam and secular humanism. Many Muslim settlements in the continent have become “no go” zones for police and fire services, and the disdain by the elites in Europe for historic Christian values is now deeply entrenched in the culture.
Furthermore, representative government is no longer working in some of the EU nations.
Even as the dollar is crashing and inflation in the United States is rampant, Federal Reserve officials have announced plans to flow dollars into banks in the European Union. The European Central Bank, which is to receive the largest amount, will in turn will extend the money to other major banks in EU member states, which are finding it increasingly difficult to raise funds from investors deeply concerned by the massive regional government's unstable economic climate.
Meanwhile, the planned participation of central banks across the globe in the scheme is now prompting some to ponder how these efforts will impact the drive for gold, as well as the future of the European economy. The Washington Post reports:
The initiative, which entails temporarily swapping dollars for foreign currencies, also involves the central banks of Britain, Switzerland and Japan, underlining the extent of international concern about Europe’s deteriorating financial system. By tapping the Fed for dollars, the other central banks are taking advantage of long-standing arrangements, first put in place four years ago at the outset of the global financial crisis to prevent bank lending from freezing up.
Dr. Mark Perry, economics professor at the University of Michigan and blogger at Carpe Diem joyously announced that the closing of Borders’ last bookstore on Sunday, September 18th “is a glorious, beautiful thing.” He said:
In the rearrangement of resources to serve customers we see the beautiful actions of the market economy reconfiguring the world to provide goods and services that are most wanted and needed in the most effective way.
It was those customers who built Borders into the world’s second largest bookseller from its first location — a humble second-floor used-book shop in Ann Arbor in 1971 — into a world-wide operation with over 1,000 stores. It was those same customers who, 40 years later, humbled Borders into bankruptcy and liquidation.
President Obama declared to an impassioned crowd of students at North Carolina State University Wednesday, "If you love me, you got to help me pass this bill!" In an auditorium holding more than 9,000 people, the President rehashed the supposed economic benefits of his new $447 billion American Jobs Act, as he pleaded with the audience to help him win congressional support. But do the merits of the President’s latest legislative attempt at reviving the U.S. economy have any relation to the American citizenry’s emotional feelings for their country’s political "leadership?"
Using a copy of the bill as a stage prop, Obama ordered students: "For those of you who did skip class today, I’ve got a homework assignment for you.... Tell your Congressperson that the time for partisanship and politics is over.... The time for action is now.... Yes, we can," Obama clamored, evoking loud cheers from the crowd.
To the list of mega-corporations bailed out by the United States government, we now must add — Europe. In an announcement that rocked financial markets worldwide, the European Central Bank announced today a concerted effort in combination with four other major central banks — the Bank of England, the Bank of Japan, the Bank of Switzerland, and yes, the United States Federal Reserve — to use dollars rather than euros in an attempt to paper over the European Union’s economic woes.
Starting in October, the Federal Reserve and other major central banks will begin auctioning allotments of dollars to the European Central Bank, which will then use the new money to shore up shaky European megabanks. The allotments, which will have three-month maturities and will be structured like typical repurchase operations (“repos”), will be issued against euro-denominated collateral and repaid, with interest, in dollars. That, at least, is the theory.
Currency swaps involving the Federal Reserve and other central banks are nothing new, and have been a focal concern of Fed opponents like Congressman Ron Paul, who has long suggested that much of the Fed’s financial chicanery has been carried out in the form of such currency deals with foreign central banks, in total secrecy.
A U.S. House committee reported that President Obama’s aides pressed White House budget officials to review a $535 million federal loan guarantee to Solyndra, a failed solar-maker manufacturer that recently filed for bankruptcy protection. Republicans on a House Energy subcommittee released internal administration documents Wednesday revealing an attempt to expedite completion of the loan package so that Vice President Joe Biden could publicly announce the plan at a company event two years ago.
The report, which included findings of a seven-month investigation, was released before two administration officials were grilled about White House support to risk hundreds of millions of dollars of taxpayers’ money for a speculative investment in energy technology. The Department of Energy and the Office of Management and Budget (OMB) "did not take adequate steps to protect taxpayer dollars," read the report. "This was a half-billion-dollar mistake," asserted Rep. Brian Bilbray (R-Calif.).
Shortly after Solyndra shut down its operations, which resulted in 1,100 immediate layoffs, the FBI raided the company’s headquarters, because of allegations that executives knowingly misled the government to swindle more than $500 million in federal loan guarantees.
New regulations from the Environmental Protection Agency (EPA) have many people up in arms, including some unions. Aware that the regulations will be job-killers, the unions and small government advocate have actually discovered some common ground.
The Blaze reports:
A Texas company is suing to block new EPA “cross-state air pollution” rules. If the regulations are not changed, Luminant Energy claims it will be forced to close two plants and fire 500 people. Texas was not initially included in the new EPA rules that target sulphur-dioxin emissions with a mandate requiring a 64% reduction from 2010 levels, but in July the Lone Star state was added to the list.
According to the Titus County Chamber of Commerce Director Faustine Curry, the regulations would have a detrimental impact on the Texas economy.
“This would be devastating to the Northeast Texas economy — not just Titus County. In Titus County, we have the power plant, the mines,” Curry explained.
On September 13, 2011, Ron Paul chaired a hearing entitled "Road Map to Sound Money."