“May God Continue to Bless Us With People Who Choose to Be Twice as Good…”
By Sherman Ragland | November 5, 2008
Maybe it is because I was actually born on the 4th of July.
Or, maybe it is becuase I grew up in Washington, DC, but I have always been an election junkie.
As I got older, however, I realized how powerful it is to study political campaigns as case studies for great marketing ideas.
Campaigns have a start, a flow and a definite end. And at the end there is no such thing as “coming in second”.
So, what did we learn from Obama’s historic win last night?
There will be much analysis and pundentry over the coming days and weeks, but I do believe that we can already see a few things that are “Self-evident”:
First, regardless of one’s political stripes, it is hard not to be awe struck by the manner in which the Obama Campaign was run, specifically as a 21st Century campaign. Robo Calls were replaced with text messaging. Text messaging that seemed to be written just for the recipient, knowing where they lived, how much money they had contributed and what they were concerned about at that moment in time. A campaign in which the Internet and a website were able to raise more money ($725 million) than ever conceived possible in the form of an average contribution of $80.00.
Second, Barack Obama has a vision that goes beyond simply “Winning”. It is clear to both his (early) supporters and (early) detractors that Obama’s vision for his presidency is not simply of “getting there”, but much deeper. It is in many ways a vision that was similar to the vision of Ronald Reagan. A unique appreciation for what the President of the United States is suppose to be, the unique role that this office represents and a commitment to never stain the office. It is said that Ronald Reagan never entered the Oval Office in the White House without wearing a suit and tie, becuase of the deep appreciation and respect he held for the Office of the Presidency. I believe that the reason Obama was able to win over the support of people like Colin Powell, Peggy Noonan, Ken Duberstein and many other “hard core” Reagan Republicans crossed party lines in their high profile endorsement of Obama is because they saw this specific quality; Obama’s clear recognition that the President of The United States is not just another political office that is awarded. It is a position on the World’s stage in which the person who holds it is “always on duty”, must always represent “All the People” of the United States, and must demonstate to the world what is right and best about America.
Which brings me to my last point…
There are many who say: “I want a President just like me, a regular guy”. Good for them, I hope they never get their way. Personally, I want a President who is a “rock star” (without the drugs and groupies of course).
Like most other Americans, I want a president who says to the world: “I represent the only country on the planet that has the capacity to singularly change it for the better, or the worse, that is still a shining beacon on a hill, and has the humility to understand that it holds this place because it is a blessed nation, and as President, I am this country’s senior Ambassador.”
A guy who is steady, self-assured, and can think on his feet, and is smart as can be, but decides to surround himself with people who are even smarter on the topics that a President needs to be smart about.
In short, I want a guy who was “TWICE AS GOOD” as the guy who came in second.
… and on November 4th, 2008, the People of the United States recognized that Barack Obama was TWICE AS GOOD as the guy who came in second.
Like many Americans, God has blessed me. When I tuck my youngest son, David, into bed tonight I can share with him a modified version of what my mom use to say to me: “You live in the United States of America, you can be anything you want to be, if you are willing to work hard and be twice as good.”
And once again, God has blessed America with a person who has the capacity to make smart decisions that are grounded in faith and coupled with very a deep respect for what it means to be President of the United States.
May God bless and keep President (elect) Barack Obama in the coming days months and years ahead.
p/s – See what Don Peebles, The Peebles Corp. CEO, Jack Welch, former GE CEO and Dick Armey, FreedomWorks co-chairman have to say about Obama being “Twice as Good…”
http://www.cnbc.com/id/15840232?video=919675866
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“Mr. Ragland, We Are Watching You…”
By Sherman Ragland | October 29, 2008
I understand that folks in the White House have been reading my blog…
… and they are not happy with my past couple of posts, but they are in agreement that giving money away to banks, rather than buying up toxic mortgages, is really starting to look like a very bad idea.
So yesterda White House Press Secretary Dana Perino BORROWED a pair of Boots from Secretary of State Rice and Started KICKING SOME BUTT…
White House tells banks getting federal aid to quit hoarding money and start lending it
Tuesday October 28, 4:11 pm ET
WASHINGTON (AP) — An impatient White House served notice Tuesday on banks and other financial companies receiving billions of dollars in federal help to quit hoarding the money and start making more loans.
“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” White House press secretary Dana Perino said.
Though there are limits on how much Washington can pressure banks, she noted that banks are regulated by the federal government.
“They will be watching very closely, and they’re working with the banks,” she said.
Anthony Ryan, Treasury’s acting undersecretary for domestic finance, made the same point in a speech in New York before financial executives.
“As these banks and institutions are reinforced and supported with taxpayer funds, they must meet their responsibility to lend, and support the American people and the U.S. economy,” Ryan told the annual meeting of the Securities Industry and Financial Markets Association. “It is in a strengthened institution’s best financial interest to increase lending once it has received government funding.”
Said Perino: “The way that banks make money is by lending money. And so, they have every incentive to move forward and start using this money.”
There has been some evidence of easier lending, Perino said. But it’s not enough to calm stock markets or help small businesses that depend on a free flow of credit, not just to expand but to maintain operations through making payroll or financing inventories.
The government is making efforts on several fronts to thaw the frozen credit markets and combat the worst financial crisis to hit the country since the 1930s. But so far, the efforts have shown little in the way of results. Libor, the London Interbank Offered Rate, a key goalpost for international lending, edged down only marginally on Monday and still remains at elevated levels.
The Federal Reserve began a program Monday to purchase the short-term debt of businesses, known as commercial paper. This market has been frozen since the collapse of Lehman Brothers spooked credit markets last month.
Under the authority of the $700 billion financial bailout plan approved by Congress and signed by President Bush earlier this month, the administration also plans to dole out $250 billion to banks in return for partial ownership. The Treasury Department, which is overseeing the massive capital injection program along with the rest of the bailout, will pour $125 billion into nine of the country’s largest banks this week. Another $125 billion will go to other banks.
Treasury Secretary Henry Paulson has said the money was aimed at rebuilding banks’ reserves so that they would resume more normal lending practices. But reports then surfaced that bankers might instead use the money to buy other banks. Indeed, the government approved PNC Financial Services Group Inc. to receive $7.7 billion in return for company stock and, at the same time, PNC said it was acquiring National City Corp. for $5.58 billion.
Officials have said that there are few strings attached to the capital-infusion program because too many rules would discourage financial institutions from participating.
p/s/ If you plan on attending the “BY INVITATION ONLY” event coming up in three weeks, you better get your name on the list this week. You can get on the list and get a great bargain by going to this special website now: CLICK HERE NOW ->GOLD MEMBER SPECIAL
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“The RETURN of President ‘Doofus’…”
By Sherman Ragland | October 24, 2008
According to the website UrbanDictionary.com, the word DOOFUS means: “Someone who hasn’t got a clue!
… As a Realinvestor(tm) chances are that you too have been watching closely the rapid rise in mortgage rates for US mortgages over the past several weeks, and have asked yourself the question, “HEY WHAT GIVES?”
If you are like me you are probably wondering what happened to the CENTRAL PROMISE of the “PAULSON PLAN”??!
You Know, when Secretary of the Treasury Hank Paulson orchestrated a secret closed door session with the leadership of CONGRESS along with Fed Chairman Benanke and SEC Chairman Cox, and shared with the senior elected officials of our country that the MELTDOWN in the Mortgage markets was now FULLY IMPACTING credit in other areas, and that if CONGRESS DID NOT FORK OVER $700 Billion within 72 hours, the entire US Economy would grind to a screeching halt.
… and what was the $700 Billion suppose to do?
As EXPLAINED by Secretary Paulson in a brief 3-page memo, known as the “PAULSON PLAN”, the $700 Billion was SPECIFICALLY Being approved by Congress to be used to ACQUIRE the Toxic, Sub-prime Mortgages held by banks and other financial insitutions for “pennies on the dollar”. Then the Treasury Department would work with the recipients of the mortgage money (home owners) to restructure these loans, which would then be sold for something “north of Pennies on the Dollar” thus assuring the following:
#1 – Toxic Mortgages that were (and still are) the cause of the Credit Crises would be removed from the system;
#2 – Banks and Lending Institutions would have the opportunity to OFF LOAD these toxic mortgages for some level of profit, since most had already written the value of these mortgages down to zero;
#3 – Home owners in trouble would finally be getting some relief because the Government would have the power to negotiate more favorable terms;
#4 – Sophisticated investment groups, such as Carlyle Group and Blackstone Group, had already announced that they would stand ready to buy these “recast” mortgage pools in a way that would guarantee that the Federal Government would earn a profit on this exchange, thus assuring the American Taxpayer that even though $700 Billion was a “BIG NUMBER” the amount of money earned would be somewhere above the taxpayer commitment and therefore in the end, the TRUE COST to the Government would be ZERO…
…. again, a very simple plan. So simple, that Paulson ACTUALLY Did deliver his written plan to the Leadership of Congress within 72 Hours of that Secret Meeting in a 3-page memo.
And for a Brief Shining Moment it Really looked like George “W” Bush had finally seen the light and had gotten it together on what needed to be done. With a simple 3-page initiative “W” was ready to finally BE the “COMMANDER AND CHIEF” of the Economy and with a BOLD PLAN that he successfully pushed through with his Treasury Secretary Henry ‘Hank’ Paulson, and his Federal Reserve Chairman, “W” was goint to get the TOXIC MORTGAGES Out of the System, restore order to the credit markets, fix the housing problem and head off a recession (or worse). Bold Steps – Presidential – Visionary…
…So here we are exactly 4 weeks after the President signed the $700 Billion Bail Out Bill (Actually it was increased to $850 Billion to provide for an additional $150 Billion in “sweetners” to get members of the House Congressional Republican Caucus to come along and pass the thing) the question is now being asked:
“HOW MANY TOXIC MORTGAGES HAS THE GOVERNMENT ACQUIRED SO FAR??”
The answer: NONE!
So, you may be thinking, “Come on Sherman, that’s a little harsh! Everyone knows the Government needs more than 30 days to get up and running, particularly when it comes to spending $700 Billion”.
That might be true EXCEPT for one thing… The Government has been spending down the $700 Billion. As of last week the Treasury Department has “invested” $197 Billion and is about to allocate (SPEND) another $200 Billion. In buying BAD (TOXIC) Mortgages, as was outlined in the Original “PAULSON PLAN”…? NO!
It seems that there really was NO PAULSON PLAN… it was just an “IDEA”.
Once Congress RUSHED to allocate the Money, and the President RUSHED to sign the legislation, the Secretary of the Treasury came up with a Better Plan, Excuse me a “BETTER IDEA”.
Take the money and simply GIVE IT TO THE BANKS, in exchange for some watered down thing that supposidly functions like stock. In other words, Nationalize US BANKS by having the Federal Government own shares in the banks in exchange for a Government CHECK.
And EXACTLY HOW MUCH OF THE GOVERNMENT’S MONEY HAS GONE INTO ORIGINATING NEW MORTGAGE LOANS FOR PEOPLE IN TROUBLE, as was originally promised in the original “PAULSON [PLAN] IDEA”?
NONE!
Which is exactly why Mortgage Rates in the US have seen a sharp spike UPWARD since President Bush Signed the $700 Billion Bailout Bill, which was suppose to help “restore stability to the mortgage markets”.
Please see the following chart that outlines what the President (through his Treasury Secretary) has done since announcing the need for a $700 Billion bail out program to get the Toxic Mortgages out of the Financial System:
This chart shows the rapid changes in US Home Mortgages during this period of time when the Federal Government took over Fannie Mae and Freddie Mac, Proposed a $700 Billion Bail Out Bill (supposidly to buy up toxic mortgages), The President’s Signarture on the Bill, and the President then Changing His Mind and deciding to make direct investments in US Banks, instead of using the Money for what Congress Approved.
Bottom Line: Institutional Investors, who were standing by to get back in the mortgage market, have now pulled out of the mortgage market, because the US Treasury is not going to take the Toxic loans out of the system. More so, they have also decided that it is MUCH better to now own the shares of Stock of US Banks, since the Federal Government is giving away money, RATHER Than to invest in the Mortgages Originated from These Banks, and as a result, Mortgage loans Hit a 3 month high yesterday, and are probably headed even higher. NOT GOOD NEWS for anyone in the homebuilding or related industries, because it means the cost of 30 year mortgages just got more expensive – way more expensive.
Which brings me back to where I started today’s blog:
According to the website UrbanDictionary.com, the word DOOFUS means: “Someone who hasn’t got a clue!
Therefore, I think it fair game that when it comes to the economy, we can all agree that “W” really doesn’t have a clue!, and here is why…
There is a very famous finance professor at the Wharton School of the University of Pennsylvania (one of many) whose name is Peter Linneman. And Dr. Linneman broke it down very simply a few years ago at a conference I attended in Philadelphia for the supporters of the Wharton Real Estate Center, when discussing the trade relationship between the US and China.
He said: “… the relationship between the US and China is actually very symbiotic and very simple: We go to Walmart and buy lots of stuff made in China, the money goes to China and creates a trade deficit for the US and a trade surplus for China, if the story ended there it would be very bad, but it doesn’t. China sends a great deal of this money back to us by buying US home mortgages, and as long as they continue to do so, American’s can have an abundance of mortgage money at cheap rates which helps them to get more home equity loans when they need them, so they can go back to Walmart to buy more stuff…”
It sounds very simplistic, and yet it is very accurate. While it is true that somewhere around 35% of all US (adult) residents own a piece of the stock market, either through direct investment or through mutual funds, over 60% of all Americans own a home. And it is through their home ownership that they create “wealth”, or at least believe their wealth originates.
We do know that “W” did get in and did graduate from the Harvard Business School (HBS) and no one can fault him, or the Dean of Admissions (at either Harvard, who let him in, or Wharton who didn’t), but it is now becoming very clear that while at HBS, “W” never actually attended any classes on Economics, because if he had, he would know that: “You Screw Around with the US Housing Market at Your Own Peril”. Housing is the backbone of the creation of Wealth in America for the vast majority of Americans – not the stock market. As Realinvestors(tm) we know that there are special and significant tax breaks for home ownership that do not exist for stock ownership. That even with the changes in the underwriting of mortgages, that you can still get a home loan (or at least in normal times) for 80% of the purchase price of the home, where as it would be impossible to get an 80% loan to buy stocks or mutual funds. And as many of us are discovering the hard way, a “drop in housing values” can mean a paper loss by as much as 20-25%, but a DROP in the STOCK Market, can mean very real losses in excess of 50%, in some cases just in one week!
Somehwere along the way “W” either never got the lesson (or more likely was absent from the discussion) when his ECON professor told the HBS students: “If ever get to be President of the United States, Remember just one thing: ‘Don’t Screw Around with Housing’ – You Mess Up Housing, You Mess Up The Economy.”
So here we are now after allocating $700 Billion to implement a plan, that never really existed in the first place, and we discover that “W” HAS NO PLAN TO FIX THE HOUSING MARKET… and the longer the US Housing market flounders, the worse the US ECONOMY is going to get.
The HUGE Drops in the Dow Industrial Average (Stock Market) are telling us all that a really bad recession is coming (at least for those people who live outside of Washington, DC. Every time the US Economy goes into recession, the Greater Washington, DC economy GROWS – Gee Imagine that).
So, while we know that “W” went to Harvard, there is clear evidence that he did not learn a blasted thing when it comes to money, housing and the economy, or to be more specific, the impact that each has on the other.
In otherwords, when it comes to Economics and the importance of a vibrant and stable US Housing Market, “W DOES NOT HAVE A CLUE…”
and according to the dictionary: DOOFUS MEANS: “Not having a clue!”
What is MOST disturbing about this Recent Spike in Mortgage Rates, and the Corresponsing Acknowledgement that there really NEVER WAS a PAULSON PLAN, is the fact that “W” and “Hank” Knew this was Coming!
For Well Over a Year Now ANYONE WHO DOES HAVE A CLUE has paid attention and watched in horror as the US Housing Market has come to a screeching halt, and we ALL know why: No Mortgage Money, No Sales…
The fact that it Took “W” and Hank Over a year to Come up with a Solution (ANY SOLUTION) to the credit and housing crises, was an Incredibly Dissapointing thing, at least to most people who do pay attention.
The fact that After Getting the US Congress to FORK OVER $700 Billion in the same manner thart Bush Got Congress To approve a Declaration of War (for Iraq) and then Discovering that THERE REALLY IS NO PLAN (As in: Hey Guys the Day After we Get Approval we do ‘X, Y then Z’) is Just Plain DISGUSTING.
So, the Moral of This Story: “HE WHO SITS IN THE WHITE HOUSE AND WHO THEY SELECT TO BE THEIR TREASURY SECRETARY, MATTERS… At least that is as it relates to the Economy.”
So for those who say, “Why Does Sherman Really Care About This, And Why Does He Not Get Back to Talking About Real Estate Investing…?” We only get one chance every four years to protect our interests. If you really are a REALINVESTOR, you will make the time to listen to what the politicians are saying about their plans for the economy. THEN YOU WILL GET OFF YOUR BUTT AND GET OUT THERE AND WORK TO GET THE ONE WHO HAS THE BEST PLAN FOR YOU ELECTED. The alternative is to sit around in being miserable for four, or eight more years.
It is true that as Realinvestors(tm) we can make money in any market, but why intentionally put another “BONE HEAD” in the COMMANDER AND CHIEF’s CHAIR By Design. If we knew then what we know now, many folks would have worked hard (or harder) to keep us all out of the situation we face now. And even if it is still good for you, how long do you really want to live in a country where you are rich, and everyone else is suffering – they call these types of places: “THIRD WORLD NATIONS”.
As real estate investors, our ability to get rich (or at least richer) is highly dependent upon OTHER PEOPLE who have GOOD JOBS and who choose to GET UP AT O’Dark Thirty EVERY MORNING to Go To THEIR JOBS to PAY OUR RENTS.
No Jobs = No Rents.
For those of us who want to make “Quick Cash” selling houses, we need buyers to buy houses…. and those buyers need loans. Not Sub-prime or “Alt-A”, but just good, reasonable loans. The kind you get when the mortgage market is functioning “normally”. The mortgage market has not functioned “normally” since just before August 10th of 2007. The $700 Billion EMERGENCY BAILOUT BILL was suppose to fix this. Would it have really worked – we’ll never know, because President “DOES NOT HAVE A CLUE” changed his mind, and did something else with the money.
or, so far is doing something else with the money.
This insanity has to end, and thank goodness it will, in about another 2-3 months.
But where we go from here for another 4, or 8 years is squarely in your hands, and contrary to what some folks say, “IT MATTERS.”
p/s – for Christmas, someone please send a copy of http://www.AfterTheMeltdown.com to 1600 Pennsylvania Ave, NW Washington, DC 20001 Att: “W” and maybe, just maybe he may leave office in January of 2009, with a clue.
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“Fannie Mae – The New Kryptonite…??”
By Sherman Ragland | September 30, 2008
As we get closer to the November election, it is clear that Republicans have decided to use ties to Fannie Mae as the new “Kryptonite”. As an example, this is the headline from a NATIONAL PUBLICATION for LOAN OFFICERS:
“Kagen returned Fannie Mae’s donation
Sep 28, 2008 – McClatchy Tribune Business News
Author(s): Diana Marrero
Sep. 28–WASHINGTON — As mortgage giant Fannie Mae continues to make headlines, Wisconsin Republicans are attempting to link Rep. Steve Kagen to the troubled lending company, accusing him of covering up a campaign contribution from the firm’s political action committee.
But Kagen’s campaign says it immediately returned the $1,000 contribution, eliminating the need to report the donation. Candidates don’t have to report contributions if they immediately return them, according to the Federal Election Commission. “It was an unsolicited donation,” spokesman Jake Rubin said in response to questions about why Kagen returned the money. Kagen is in a re-election fight with Republican John Gard, whom he defeated in 2006. Fannie Mae’s donation came on the same day the House gave final approval to a major housing bill that helped mortgage lenders Fannie Mae and Freddie Mac.
While it makes for very interesting POLITICS, the two questions I have to ask are:
A) is it True – Is Fannie Mae to Blame for the Mortgage Meltdown, and
B) Is it SMART to make Fannie Mae, the New “Willie Horton”?
Is it True – Is Fannie Mae to BLAME for the current Mortgage Mess and the $700 Billion Bail Out Packge – NO WAY! Anyone who takes the time to build the timelines knows this. But it is a long held belief in politics that if you say something long enough, everyone will ultimately believe it to be true – especially when it isn’t.
The facts don’t favor this approach to making Fannie the “Bad Guy” in all this. Why? Fannie Mae and Freddie Mac were never “hot and heavy” into Sub-prime, and SUB-PRIME is the real culprit. SUB-PRIME is the unique creation of WALL Street and specifically the Wall Street Firms who have already cost the Federal Government $150+ Billion, even before you add in the new $700 Billion being discussed. Bear Sterns, Lehman Brothers, UBS and Merrill Lynch are the Proud Parents of Sub-Prime, not Fannie, or Freddie. Fannie and Freddie did not even start touching anything close to sub-prime until recently when Congress began to put pressure on them to do more in the area of affordable housing.
Now granted, Fannie and Freddie have had more than there share of accounting problems and questionable transactions. So no one, including me, is saying Fannie and Freddie are “squeekie clean”. BUT creating SUB-PRIME Toxins currently invading and wreaking havoc on the global financial system – NO this is not thie legacy of Fannie and Freddie. Or at least it should not be, but again, you tell a lie long enough – you rewrite history, in real time.
So, if it is not true, then is it smart to hoist all the blame on Fannie and Freddie and anyone who helped enable them before the Feds took them over?
I don’t think so, but then again, what do I know…
I don’t think it is smart for one party to make it a campaign issue becuase Fannie and Freddie were quite happy to throw money at both the Democrats and the Republicans in order to “BUY INFLUENCE” on Capitol Hill. So why are the Republicans pushing this issue so hard? Seems that Senator Obama is a big recipient of money from, NOT Fannie and Freddie (as in through lobbiest, etc) but from Fannie employees. HUH? Obama does not take money from Federal contractors, lobbiests, or PACs (political action committees exist to simply collect money that comes from a company but is first laundered through an entity in order to either hide where the money is coming from, or get around campaign contribution laws). But the employees of Fannie Mae did decided to chip in $25 to $150 bucks each and they raised over $150,000 for Obama. So now, the Republicans “smell blood in the water”
So, if you actually track this stuff ( I know it is a sick hobby) you will see that the Republicans began to SPIN Fannie as their #1 campaign issue on September 15th, when the FEDS took over BOTH Fannie and Freddie after it became clear that Freddie Mac was insolvent and the takeover would cost the US taxpayers as much as $300 Billion – Again, the $700 Billion currently being discussed has nothing to do with Fannie or Freddie, but has EVERYTHING to do with the actions of Bear Sterns, Lehman Brothers, UBS and Merrill Lynch. The $700 Billion is ALL about getting Sub-prime loans “off the street”.
So, why do I care so much – I see the HUGE disconnect in attempting to tie Fannie to the $700 Billion Bail out, or say that Fannie and Freddie brought down the financial markets – it simply isn’t true – and the folks who are spinnig this know it. And quite frankly, it ticks me off that what is a known lie can so quickly be spun as the truth because of the relatively low level of financial intelligence on main street and the mass media which is allowing this to happen. We are watching history being re-written – In real time.
BUT – even if the folks behind this re-writing of American Financial History Win, they just might Lose.
Why? Becuase setting up Fannie as the “TAR BABY” creates some very unique problems for the Republicans.
While I have to admit even I want some one or some thing to blame for all this. And I have to admit that Fannie as the “Whipping Boy” makes for some very powerful headlines and themes for local elections, the Republicans have a BIG problem with Fannie as the “Great Satan” bringing down America because of Fannie’s close ties to …. John McCain.
It is well documented that McCain over the years has benefited from Fannie Lobbying money and both his Campaign Manager and Chief Strategist were paid lobbiest for BOTH Fannie and Freddie. His Chief Strategist’s firm still getting $15,000 a month up until 30 days ago, it seems as reported in the New York Times.
So, while the truth is Fannie and Freddie are not to blame for the current mess, many Republicans, it appears, have decided to use this as their #1 weapon in the November Election…
… Problem is they now have to say “Fannie is THE problem with America, but disregard the fact that the guy at the top of our ticket has benefitted for years from their PAC and lobbying money” …Makes for a very strange political statement, and strategy, indeed.
But then again, its politics and this is a political season – any (strange) thing can happen.
p/s Can anyone say, “KEATING FIVE?”
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President of BB&T “Goes Political…”
By Sherman Ragland | September 26, 2008
Today BB&T CEO John Allison issued the following statement:
“…A significant and immediate tax credit for financial institutions to purchase homes would be a more effective solution for the financial crisis than the proposed $700 billion federal bailout. The federal government should also buy homes, and not securities backed by mortgages, he wrote in a Sept. 23 letter to the U.S. Congress.
…This is a housing value crisis, and it does not make economic sense to purchase credit card loans, automobile loans, etc. The government should directly purchase housing assets, not real estate bonds…
…Overpaying will harm taxpayers, while underpaying will hurt real estate markets. He also believes allowing homeowners to use the bankruptcy to restructure their loans will “force losses on banks. The primary beneficiaries of the proposed rescue are Goldman Sachs Group Inc. and Morgan Stanley..
…The U.S. Treasury, he says, is “totally dominated by Wall Street investment bankers,” and “cannot be relied on to objectively assess all the implications of government policy on all financial intermediaries… it is inappropriate that the debate is largely being shaped by the financial institutions who made very poor decisions.”
Allison then goes on to pin the responsibility for the crisis on Freddie Mac and Fannie Mae.
THERE IS ONLY ONE PROBLEM – > IT IS A LIE AND ALLISON KNOWS IT!
Allison is among a growing group of Influential REPUBLICANS who are attempting to re-write History on this topic (in real time) and PIN the Blame for the financial MELTDOWN ON Fannie Mae and Freddie Mac in an attempt to SMEAR Both House Democrats and In particular Barack Obama.
How??
#1 – By Deflecting the blame from the REAL CULPRITS, the investment banking firms (Bear Sterns, Merrill Lynch, Lehman Brothers and UBS) who Dreamed Up and Then Pushed Exotic Mortgages down the throats of American Home Owners Using Their Conduits: Indy Mac, WAMU, Countrywide and other Mortgage (Broker) Originators dealing in the (now known to be HIGHLY TOXIC) world of Sub-prime loans, etc.
AND
#2 – A Bush Administration that Emphasized a 100% Home Ownership Policy through the US Department of Housing & Urban Development Despite the Objections of the Career People at HUD who for over Seven Years Warned About the Dangers of attempting to move the Needle past the historic home ownership levels in this country of 52%-54%. While at the same time had an SEC (Securities Exchange Commission) with oversight over Wall Street Firms who were not only creating these highly dangerous mortgages, but were instituting the SEC’s Program Pioneered in 2004 Called “SELF OVERSIGHT”
The TRUTH of the Matter is that Fannie Mae and Freddie Mac had little to do with the creation and development of the SUB-PRIME Type of Mortgages that are the Main Poison Infecting the Entire Mortgage Market.
WORSE: People like Allison KNOW THIS!
It is true that Fannie and Freddie have had their problems, but being “MARKET MAKERS” in Sub-Prime is NOT one of them.
So why would the President of BB&T KNOWINGLY Publish a LIE??
Because Blaming The NEED for a $700 Billion Bailout on FANNIE AND FREDDIE takes the focus off who is really to Blame:
a FORMER SENATOR NAMED…. Phil Graham who was the chief advocate of a Bill that sailed through Congress during the final days of the Clinton Administration when BOTH Houses of Congress were CONTROLLED by the REPUBLICANS and Graham was able to get through a piece of legislation called: The Graham-Leach-Bliley Act which DEREGULATED The Prior Separation Between WALL STREET and COMMERICAL BANKING In 1999, and is the primary reason why Wall Street Took on Riskier and Riskier Practices, which lead to the creation of things like Sub-prime loans.
Without The Graham-Leach-Bliley Act Wall Street could not have created SUB-PRIME LOANS and the other creative (TOXIC) loan products now clogging up the system.
The TRUTH IS it is The Graham-Leach-Bliley Act which forced Wall Street to create more and more creative loan products combined with the Bush Administrations’ Housing Policy and “hands-off” oversight of Wall Street. That Created This MESS, NOT FANNIE AND FREDDIE.
OBAMA HAS BEEN “SWIFT BOATED” BY What is now becoming the Republican SPIN on the ECONOMY and the GREAT LIE That Fannie and Freddie Brought On this Mess, and Allison, Pat Buchanan and other folks getting prime-time coverage KNOW IT!
The Question is: Does Barack Obama know What Just Hit Him, and Will he Hit Back?
Excuse me, but did anyone say: “KEATING FIVE….?”
P.S. IF YOU ARE STILL CONFUSED ABOUT ALL THIS – > DON’T BE: http://www.AfterTheMeltdown.com
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Why Congress is Telling Bush/Paulson “NO!”
By Sherman Ragland | September 24, 2008
A week ago Thursday evening, US Treasury Secretary Hank Paulson in a closed door session with the leadership of Congress finally disclosed that the mortgage meltdown that started in August of 2007, now threatened to shut down the entire US Economy. Further Paulson told the members of Congress in this closed door session that if Congress did not act within days, the damage would be “of a permanent nature, with long lasting repercussions”.
Paulson then told Congress that he would have a proposal to them within days. This weekend Paulson, Fed Charman Bernanke and SEC Commision Chair Christopher Cox met with Congress and presented their plan to salvage the US Financial Markets. It was a three page <- you read this correctly THREE PAGES, that asked for Congress to APPROVE a $700 Billion Bail Out and included language that stated that the “DECISION OF THE TREASURY SECRETARY WOULD NOT BE SUBJECT TO ANY REVERSAL BY THE COURTS OR OTHER BRANCH OF GOVERNMENT…”
In other words, the Treasury Secretary asked for a $700 Billion “Blank Check” with No strings attached.
Congress immediately “PUSHED BACK” and said “NO!”
Ultimately this bill will get passed and we will be having a SPECIAL LIVE SESSION of This Week’s REALINVESTORS’ TALK RADIO in which we will cover the hearings currently taking place on Capitol Hill.
However, I thought it important to share WHY CONGRESS IS TELLING PAULSON “NO!” on Rubber Stamping his plan “AS-IS”.
The following information will be published tomorrow in the Baltimore Business Journal Tomorrow on the Executive Compensation received this year by the heads of those firms that have been BAILED OUT by the Federal Government under the guidance of Henry Paulson and Ben Bernanke:
From the Baltimore Business Journal – by Mike Sunnucks and Chris Casacchia Contributors
“What CEOs involved in financial meltdown made…”
As Congress considers a $700 billion bailout for Wall Street and the banking sector, there are calls to restrict the pay and severance packages for CEOs at investment houses, banks and mortgage lenders poised to be benefit from the plan put forward by U.S. Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke.
Executives from some of the major investment and commercial banks involved in the financial upheaval and bailout earned hefty paychecks last year, according to proxy statements outlining their salaries, bonuses and stock options:
Lehman Brothers Chairman and CEO Richard Fuld Jr. made $34 million in 2007. Lehman (OTC: LEHMQ) filed for Chapter 11 bankruptcy protection earlier this month.
Goldman Sachs (NYSE: GS), which Sunday gained Federal Reserve Bank approval to become a bank holding company, paid its chairman and CEO, Lloyd Blankfein, $70 million last year. Co-Chief Operating Officers Gary Cohn and Jon Winkereid were paid $72.5 million and $71 million, respectively.
American International Group’s chief executive, Martin Sullivan, got a $14 million compensation package in 2007. He was ousted in June. The insurance giant (NYSE:AIG) is on the receiving end of an $85 billion federal bailout. Edward Liddy took over as AIG’s chief executive earlier this month.
Morgan Stanley Chairman John Mack earned $1.6 million. Chief Financial Officer Colin Kelleher got a $21 million paycheck in 2007. Morgan Stanley (NYSE: MS) also received approval to become a banking holding company, a shift that allows Morgan and Goldman to bring in bank deposit assets which offer more-solid financial footing.
Merrill Lynch CEO John Thain was paid $17 million in salary, bonuses and stock options in 2007. Merrill (NYSE: MER) is being acquired by Bank of America Corp. (NYSE: BAC). BofA CEO Kenneth Lewis earned $25 million in 2007.
JP Morgan Chase & Co. Chairman and CEO James Dimon earned $28 million in 2007. Chase (NYSE: JPM) acquired troubled investment house Bear Stearns earlier this year with the federal government promising to take on as much as $30 billion in Bear assets to help get the deal done.
Fannie Mae CEO Daniel Mudd received $11.6 million in 2007. His counterpart at Freddie Mac, Richard Syron, brought in $18 million. The federal government announced earlier this month it was taking over the mortgage backers with Herbert Allison to serve as Fannie CEO and David Moffett the new CEO at Freddie.
Wachovia Corp. Chairman and CEO G. Kennedy Thompson received $21 million in 2007. He was succeeded by Robert Steel as CEO in July. Steel is slated to get a $1 million salary with an opportunity for a $12 million bonus, according to CEO Watch. Wachovia (NYSE: WB) is one of the banks that could be sold in the midst of the financial crisis.
Seattle-based Washington Mutual (NYSE: WAMU) will pay its new CEO, Alan Fishman, a salary and incentive package worth more than $20 million through 2009 for taking the helm of the battered bank, according to the Puget Sound Business Journal.
CEOs of large U.S. corporations averaged $10.8 million in total compensation in 2006, more than 364 times the pay of the average U.S. worker, according to the latest survey by United for a Fair Economy. In 2007, the CEO of a Standard & Poor’s 500 company received, on average, $14.2 million in total compensation, according to The Corporate Library, a corporate governance research firm. The median compensation package received was $8.8 million.
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“Suze Orman IS FLAT OUT Not Telling the Truth!”
By Sherman Ragland | September 18, 2008
This evening on the Larry King Show, Leading Financial Expert Suze Orman said, “… if you had asked ANYONE last year if they believed that the stock market would crash, and the US Financial Market would be as Bad as it is right now, NO ONE would have said ‘YES’!”
SUZE is not telling the truth, BECAUSE LAST YEAR This is EXACTLY What I said.
I said it in Public,
and ….
It’s on Video Tape/DVD.
More Important than the Stock Market Crash and Mortgage Meltdown is Learning What Comes Next.
Learn and Profit From What Comes Next…
After The Meltdown DVD -> Click Here
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“Federal Agents Seize Control of Fannie Mae AND Freddie Mac – Senior Execs FIRED!”
By Sherman Ragland | September 8, 2008
It seems as though I have been bashing the Bush Administration over the inept handling of the mortgage crises, which has lead to a further erosion of the housing market, which has torpedoed the US Economy for over a year now…
… and for my last ’so-called blog fan’ who called me a “POLITICAL HACK”, understand that I am talking about POLICY, NOT POLITICS.
Bottom line: whatever the world’s beef is with George Bush and the Bush Machine, I am only focused on his performance as the Commander in Chief of the single most important thing that a President is entrusted with – THE ECONOMY STUPID!
…and in this regard Bush has failed all of us over the past year, in my opinion, when he refused to recognize that a deterioration in the mortgage market would lead to a collapse of the housing market, and a collapse of the housing market would lead us all into recession.
I said it loud and clear on my blog (http://www.TheRealinvestor.com) I have shouted it on my radioshow (http://www.RealinvestorsTalkRadio.com) and I gave a major (Standing room only) presentation on it last year to my real estate investor group (http//www.DCREIA.com), which was turned into a video that sells like “hotcakes” at http://www.AfterTheMeltdown.com
See Also my blog post from October 2007 – “My Kingdom for a Clue…Why George W. Doesn’t Get It!”
… and I reject the notion that I am some type of partisan “political hack”, whose only purpose is to promote a political position as though I was too stupid to know anything about real estate investing or creating wealth.
SO, today it appears that George and I are going to kiss and make up – but do not look for one of those pictures of me hugging up to Bush like someone else we all know…
Because today, George W finally came to HIS SENSES and is now saying the same thing I have been saying for over a year:
“Take care of the residential mortgage market, and you will take care of the housing market in the US. Take care of the housing market in the US, and you MAY be able to avert a recession, but let the housing market tank, and you have a 100% GUARANTEE that the US Economy will tank”.
… no crystal ball on my part, just a basic understanding by talking to my economist friends, that if you actually LOOK at the data, you will NEVER see any period of time in American History that the US Economy DID NOT tank, when the housing market was in a crisis. The two things are joined at the hip, and always will be.
So, why am I making nice with GW?
Becuase yesterday for the very first time EVER, his Treasury Secretary Hank Paulson started talking like he was an avid reader of my blog, and acting like dealing with the mortgage meltdown in America – MATTERS.
Specifically, Secretary Paulson acted on the authority given to him through emergency legislation last month and initiated a FEDERAL TAKEOVER of Freddie Mac and Fannie Mae.
[NOTE: If you do not know what these two agencies do, or how important they are to us as real estate investors, then by all means, PLEASE GET YOUR HANDS ON MY DVD – AFTER THE MELTDOWN! http://www.AfterTheMeltdown.com.
With this FEDERAL TAKEOVER comes an EXPLICIT Commitment by the US Taxpayers to give Fannie and Freddie ALL of the resources they need to not only survive, but to get the US Mortgage Markets moving again, and with that will come stability in the housing markets, and with that an opportunity to come out of the US Economic Recession sooner.
It took a year to get these guys “on board”, and a lot of good people got whacked by their employers and a lot of good companies went down the toilet while Paulson and Bush stood around in denial…
…but what is most important is – We Got There.
For more on this topic, please tune in to Realinvestors Talk Radio at http://www.RealinvestorsTalkRadio.com
Now that we have the Administration on Board (at least until they leave town in January ‘09) I will take the same time and energy I exhausted bashing BUSH on his refusal to take action, and start to discuss in great detail what the FEDERAL TAKEOVER of Fannie and Freddie means to real estate investors, and more importantly to REALINVESTORS who want to make some money this year.
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“…YOU Be the Judge”
By Sherman Ragland | August 29, 2008
http://www.youtube.com/watch?v=GEtZlR3zp4c
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“What a Whimp…”
By Sherman Ragland | July 30, 2008
With no Fanfare, and BURIED deep on the official Whitehouse website (http://www.Whitehouse.gov), you will find a page which acknowledges that President Bush did in fact sign the Housing and Economic Recovery Act of 2008, but it is hidden deep on the website and embedded in an announcement about a “BOATING BILL…??”
This law now gives hope to the beginning of recovery in the housing financial/capital markets by specifically auhtorizing the Department of the Treasury to purchase obligations of housing Government Sponsored Enterprises (GSEs) a/k/a Fannie Mae and Freddie Mac.
This law also provides reform of the Federal Housing Administration (FHA) which works in tandem with Gennie Mae to also underwrite mortgages.
Most importantly, it provides homeownership assistance to mitigate recent increases in foreclosures; and contains housing-related tax incentives and other tax provisions.
In short, It MARKS THE BEGINNING OF THE END OF THE HOUSING CREDIT CRUNCH!
What is ABSOLUTELY AMAZING is that Bush Seems to want NO ONE to know that he signed this law.
Probably because BOTH PARTIES in BOTH HOUSES of Congress told him to sign it.
… I really do not get this guy??!! Did he really mean it when he said he wanted to increase the numbers of home owners in America, earlier in his presidency, or was this just some Gimmick to get more fees to his Wall Street buddies to create Billions in Dollars in loans for low income homeowners, knowing they could not make the payments.
If he were really serious about increasing home ownership, then he should be equally interested in seeing folks keep the houses he wanted them to buy.
Not hiding the fact, buried deep on the White House website in an official announcement that burries this fact behind a “Boating Bill…!”
I am not making this stuff up…. jeez, what a whimp!
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