Sunday, July 30, 2017

Dodd Frank: "The Ultimate Middle Class Killer"

Sometimes the cure is worst than the affliction!

Former Connecticut Senator, Christopher Dodd and Massachusetts Congressman, Barney Frank, the authors of Dodd-Frank, described it as "the needed remedy for a financial system gone haywire." Former Clinton Treasury Secretary, Robert Rubin and Federal Reserve Chairwoman and Obama appointee, Janet Yellen still contend that it was "necessary regulation."

For small business and Middle Class Americans," it was the "wettest of wet blankets."

The blame is purely bi-partisan! Former Texas Governor and current Energy Secretary, Rick Perry was one of the first to point out the true causes of the 2008, financial meltdown. A Republican Congress worked with President Bill Clinton to repeal the Glass-Steagall Act.

Glass-Steagall prevented traditional banks from doing the riskier work of investment banking, stock market speculation, hedge funds, etc..It was repealed in 1999 under the "Financial Services Modernization Act." For nearly 70 years Glass-Steagall had separated commercial from investment banking.

There continue to be those who remain in denial. They are mostly big bank boosters and Wall Street analysts who still can't believe that that the Act's repeal had anything to do with the Panic of 2008. Yet evidence clearly suggests that it did.

The origin of Glass-Steagall and the motivations behind it's repeal are separate subjects for a different post. But it is important to note the players and how they used the Panic of 2008 to craft legislation that hurt Community Banks, Credit Unions, small business and essentially, the American Middle Class.

Wasn't it Yellen and Rubin's friend, Rahm Emmanuel, who said "don't let a crisis go to waste?" This crisis lined the pockets of the few, to the detriment of the many. That's how wealth transfers work.

Could it have been by design? I have never been big on conspiracy theories. But,"Dodd Frank" introduced the "Volker Rule" which prevented Banks from "propriety trading." In other words, banks could not use their own money for speculative investing.

Sounds slightly Orwellian!

I never was a Paul Volker fan! He will always be remembered as Jimmy Carter's Federal Reserve Chairman. Volker, Rahm Emanuel, Robert Rubin and Janet Yellen have three things in common: The are card carrying members of the "Council of Foreign Relations." They are globalists. They are Democrats.

To stay in denial is easier than admitting the truth. If you continue to repeat a falsehood, people might eventually believe it. To admit mistakes at this level can bring about catastrophic, career ending possibilities. The "safe route" was to "create a smokes screen" that pinned the blame on "the help."

Dodd-Frank wouldn't have happened without the Panic of 2008; and the subsequent Republican meltdown. Until Senator Edward Kennedy's death and Scott Brown's surprising Senate victory, the Democrats held sixty Senate seats. Sadly, Brown's Massachusetts orientation would not allow him to vote against Dodd-Frank.

It sounded marginally creditable, thanks to the endorsement of Wall Street "gurus," ironically responsible for the catastrophe! Especially to those who didn't understand the intricacies of banking and most particularly, mortgage lending. Those who experienced Dodd-Frank first hand, described it as a "regulatory nightmare."

Just imagine...You are attempting to refinance your home. You know that the loan that you took out in 2007 still has twenty years to go before being paid off. Your rate is 6%. Not too bad, but you learn you're eligible for a 3.25% loan that would shortened your term by five years, while reducing payments!

You learn, that the less desirable house across the street just sold for double what you paid for your house in 2007. You assume that you have sufficient equity to, not only pay off $20,000 in credit card debt, but replace your roof.

This is "grassroots American entrepreneurship" at it's best! The homeowner is "taking earned equity to retire non-tax qualified debt, in favor of tax qualified debt, coupled with both home improvement and long term interest savings."

Prior to Dodd-Frank, this would have been a common scenario. Today, it's not so easy, starting with seventy pages of redundant assurances most find more confusing than informative. Upon completion, you make a credit card payment to the lenders "Appraisal Management Company." This costs between "$500-$650," about "twice" the cost of a "Pre-Dodd Frank" appraisal.

Regulators say that the change prevents Mortgage Loan Originators from "coercing" appraisers. The ugly, behind-the-scene rationale amounts to the government doesn't want people using their homes like an ATM machine.

Three Appraisal Management Company members, in three different cities, admitted to witnessing efforts by HUD to promote overly conservative estimations of value. As a Cleveland based, AMC rep remembered, "These guys from HUD came to our office and simply said, "whatever the value, reduce it by 20%."

More than slightly Orwellian!

In 2012 FHA wording hinted that underwriters were encouraged to "look for ways to not approve mortgage loans." No joke! It was actually in the continuing education material, required for S.A.F.E. Mortgage Loan Origination license renewal.

The conventional side is even more rigorous. Rates are typically higher. Underwriting requirements are more strenuous. Qualification for non-owner occupied investment loans; utilized for rental housing, are more restrictive than ever!

Why does this matter?

Those who blundered, ultimately bilked "main street" America for billions, if not trillions of dollars. And mostly benefited! Left holding the bag was "Joe Six-Pack" who merely wanted a mortgage loan; or to buy some rent houses. Not to mention those small business' who were in business to facilitate him!

Those "too big to fail, Wall Street, "Fat cats," will never admit the truth. Their greed lead to the nation's catastrophe. If you haven't seen the movie, "The Big Short," you should. Much comes to light, regarding the Panic of 2008.

To airily blame "non-conforming lending and mortgage brokers" for the meltdown is like "chopping off the tops of weeds."Banks created the loan products! Brokers were their "cheap help;" because they were not required to provide benefits, as they did for their "in house" Loan Originators.

Former Empire Equity CEO, Ezra Behmann explained the rationale. "Straight commission, on collection, salespeople are the least expensive form of labor known to entrepreneurship." These reduced labor costs were passed on to the consumer.

The Appraisal Management companies are seen by industry people as "leaches;" making more than the appraisers for little effort. Appraisers are making less than ten years previously. Many of the best ones have left the industry.

Title companies, another small business adversely impacted by Dodd-Frank, have struggled to stay a float. Many have gone out; because the Brokers who were feeding them, also went out. Consumers seeking smaller loans suddenly had few options.

Closing cost caps dropped to five percent; from eight percent. It sounds good! But, providers(Appraisers, Title Companies, Surveyors, Government, etc.) must be paid from the 5%. Thus, if you are attempting to borrow $50,000, a lender is capped at $2500 for fees. Appraisal, title and government fees, generally account for $1500 to $1800, which are included. Then comes lender and processor fees; anywhere from $1000-1500 additional dollars.

Did anyone expect this result?

Maybe not. It is reminiscent of a farmer who is angered by foxes constantly stealing his chickens. Yet, his retaliatory response is to "butcher his rabbits."

A darker conclusion would entail a plot to eliminate lower end homeowners. Instead of working to facilitate reduced monthly housing costs, poor Americans are told to "turn to government." It is consistent with "encouraging the poor to rely upon AFDC, Section eight housing, food stamps and Medicaid" as long-term sustenance.

Discouraging cash-out refinances, through manipulation of the appraisal system, is contrary to our American Dream! Government should be encouraging independent, entrepreneurial thinking! Dodd-Frank facilitates the opposite.

The big banks complained a bit. But, they could afford the "scores" of staff lawyers necessitated by Dodd-Frank. As Kentucky Sixth District Congressman, Andy Barr pointed out, "there were 1500 Community Banks that went out in 2015, as a result of Dodd-Frank."

Barr, who sits on the House Financial Services Committee, reminded that the "Consumer Finance Protection Bureau" is not funded by Congress. It is funded by the Federal Reserve. CFPB was another Obama initiative that conveniently avoided Congress!

Never forget! Those big bank players, such as Warren Buffett and Jamie Dimond benefit from the concept of "too big to fail."

The good news is the Republican remedy, "The Financial Choice Act," passed the house, June 8th of this year. It is now working it's way through the Senate. There is no guarantee that it will bring about all of the necessary changes. But, it does have a chance. Especially if the Senate bi-passes the traditional 60 vote standard, in favor of a more doable 51 majority thresh hold.

Sadly, the poor and uneducated remain in the dark,trusting their politicians. They were told that Dodd-Frank would protect them. What it did was to make them lifelong renters.

What's especially damning with Dodd-Frank is elimination of the Middle Class practice of "playing work-up."

Historically young people would buy starter homes, hold them a few years, then sell them, taking the proceeds to invest in a bigger and better house. Often, their first house was a "fixer upper." The FHA 203k rehabilitation loan was hailed as the greatest "wealth creator" devised. But, the increased FHA paperwork has pretty much ended that!

Under Dodd-Frank, student loan debts in deferment are now counted in debt-to-income ratios. This is especially demoralizing for millennials attempting to buy their first homes.

Monday, July 17, 2017

Mainstream Media Pushing Globalism, Socialism

Amazing how clear things are becoming!

When we tune into the NBC, CBS, ABC, MSNBC and CNN, you would think that "Russia" is practically the only issue on the American public's mind. Why is that? The mainstream media cannot possibly be that "obtuse!"

In a previous post, the distinct divide in America was unveiled. It isn't merely "liberal versus conservatism." It is certainly not sectionalism. In truth, it is a question of "America first," or "America as an important part of the family of nations." In essence, "Nationalism versus Globalism."

The former sounds harsh; almost threatening. The latter comes off as nice, dare I say, "politically correct."

In his 2000 essay," The Origins of Political Correctness," Bill Lind wrote: "We call it Political Correctness. The name originated as something of a joke, literally in a comic strip, and we tend to think of it as only half serious. In fact, it's deadly serious. It is the great disease of our century, the disease that has left tens of millions of people dead in Europe, in Russia, in China indeed around the world. PC is not funny. PC is deadly serious.

"If we look at it analytically, if we look at it historically, we quickly find out exactly which it is. Political Correctness is cultural Marxism. It is Marxism translated from economic into cultural terms. It is an effort that goes back not the the 1960's and the hippies and the peace movement, but back to World War 1. It we compare the basic tenets of Political Correctness with classical Marxism the parallels are very obvious."

There are college students across America who are stating their preference for Socialism. Yet, when asked to "define Socialism," they are without words! Was this largely due to their "champion," Bernie Sander's promise of free stuff; because they were entitled to it? In a different era, a Socialist's promise of chits and boonies would have been subject to endless ridicule. Today, not so! The mainstream media, if anything, glamorized Sanders!

Donald Trump, for better or for worse, wasn't as concerned with appeasing the status quot. His proclamation "to Make American Great Again," insinuated that those before him had been focused on the exact opposite. His supporters will tell you that Barack Obama epitomized the idea of "the world first."

Sander's and Obama's positions do have one thing in common: Both are politically correct, according to the modern standards reflected by the mainstream media. The certainly "jive" with the doctrine defined by "secular, global socialism." Trump's "faith based nationalism" is your polar opposite.

Upon this conclusion, it's easy to see why Trump is hated by so many! Nothing wrong with opposing points of view.Members of the media are supposed to be neutral. They aren't. They are on a mission to expand the ideology of secular, global socialism. Opponents are positioned as, in Hillary Clinton's words, "deplorables." The best way to not be thrown into the deplorable bucket is be politically correct.

Bill Bennett, George H.W. Bush's Education Secretary drew the same contrast that I did in a previous post: "That America is more ideologically divided that at any time since 1861." Sadly, this ideological divide is impacting nearly ever issue. Starting with foreign involvement in elections.

The Russians have attempted to influence elections in America for decades. I recall Senator Edward Kennedy holding a meeting with Yuri Andropov's top aid in 1983. The Soviets sought advice from Kennedy on how to deal with Reagan. In return, they offered ideas of how to defeat Reagan in 1984.

It remains a mystery why the mainstream media virtually ignored John Podesta's involvement in Uranium one. Russia donated millions to the Clinton Foundation in exchange for 20% of Americas' uranium. Podesta's brother, Tony headed up the Canadian based company. John later ran Hillary Clinton's campaign.

It is also odd that the MSM has barely mentioned that fact that Russia today is experiencing a huge growth in Christianity. Maybe it's due to general disinterest, if not scorn. After all, their "poster boy," Barack Obama ridiculed Christians as people clinging to their "God and guns!" The Soviet Union was officially "atheist."

To say that the mainstream media has a "double standard" would be an understatement! "An arm of the Democrat party" would be more fitting! Or, as Newt Gingrich coined, "reminiscent of Pravda," the official Soviet Newspaper for decades!

Russians have traditionally gravitated to strong, often brutal male leaders. Whether Ivan the Terrible, Peter the Great, Joseph Stalin or Vladimir Putin, it was always believed that "tolkoi seela moosheena"(only a strong man) was up to the job. Putin came up through the KGB. His family roots can be traced back to the "Oprichnina," which was Ivan the Terrible's secret police in he 17th century.

Putin, like Trump, is a nationalist. Russians see Trump as a strong man. Globalists such Barack Obama, Bernie Sanders and Hillary Clinton have noted this distinction.The mainstream Media, then declares "Nationalist" synonymous with "Fascist."

Well intended Neo-Cons such as John McCain and Mitt Romney correctly pointed out Putin's attempts at suppressing Russian media. To hear Putin's explanation, they were part of the "old Communist order" that continue to promote a failed, "dead ended" ideology.

This rationale is flawed, to say the least and it would never be welcomed in America! It does lends insight into Putin's orientation. Globalists would like the American people to believe that Donald Trump harbors similar aspirations. There is zero evidence that would suggest such! Doesn't matter!

Perception becomes reality! When people hear the same rhetoric continuously, real or made up, they tend to believe it!This is the strategy of the mainstream media. It will continue until they fulfill their objective. Or we, as a country, have a reckoning.

In modern times there have been successful efforts to impose sedition. The most notable was the "Sedition Act" of 1918. It forbade disloyal, profane, scurrilous or abusive language against the United States government, the flag or armed forces that would cause others to view the United States with contempt. It was believed that such dialog would discourage the sale of war bonds.

100 years later we have a different kind of war. And, unlike 1918, we have broadcasting. Not to mention cable. Any efforts to subdue would not only be unconstitutional, but go against what we are as Americans. That the mainstream media has gotten to big is unquestioned. Herein may lie the solution? Could we not decentralize it?

This is an advanced media question. Legally? I'm not sure. They broke up "Ma Bell." Most said that it could not be done.

Stay tuned...

Friday, July 7, 2017

Selling Secession Part V- The Alternative

We have now come full circle!

The question remains, "what would be the alternative to a peaceful separation?" Amazingly, a huge segment if not the majority, of the American population, would favor the alternative.

Television illustrates the daily anguish of the losers. Some Americans still can't accept the 2016 Presidential election results. Donald Trump was never taken seriously by the mainstream media. His own party establishment's begrudging acknowledgement did not go unnoticed.

What Trump has exemplified is the real divide in America. It is not sectional. It is ideological. To categorize it as "liberal versus conservative" is one-dimensional. In reality, it's about "America first." Trump's opposition sees America as part of a family of nations.

In essence, "nationalism versus globalism."

Barack Obama held a simple commonality with the Clinton's and the Bushes: All are globalists. They see our world as interconnected. Trump and what turned out to be an electoral majority, said, "charity begins at home."

The mainstream media is unquestionably in the globalist corner. Only natural are their efforts to demean and discredit those who are not.

Most disquieting is the lack of tolerance held by anyone who defied them! Jonah Goldberg's eye opening book, "Liberal Fascism," unveiled this tendency.

Our country is dangerously divided. So divided that Civil War cannot be ruled out! From California's insistence on harboring criminal illegal aliens to the violence and corruption that symbolizes Chicago, it's apparent that some would be fine with an all out conflict; "Mano a Mano" for the "whole Enchilada!"

Better be careful for what you wish for!

This is no joking matter! There are those so incensed over the 2016 election results that they have openly encouraged violence. Others have actually practiced violence, while advocating sedition. That's right! Opponents to their point of view are heckled, ridiculed and in some cases, beaten. Uhm! Sounds like the infamous "brown shirts" of NAZI Germany! Herr Goebels would be proud!

The differences of the two opposing ideologies is most profound! It is "secular global socialism," versus "Christian Nationalism."
It is, "Open versus closed" borders, "American exceptionalism" versus "the world is flat," and "a larger role" versus "a smaller role" for government. "Climate change" is embraced by one side, scoffed by the other. Same holds true to "energy development."

In the end, a clash of perceptions.

In a clash of perceptions, both sides are right, in their own eyes. The last time a clash of perceptions so stark presented itself was in 1861. The side that wins is the one with the most resources and power. Unfortunately resolve by itself won't get it done! The South learned this truism, at great cost!

Which is why those rioters in San Jose and Chicago should be careful! They may be on the verge of awaking a long sleeping dog! As one Alabaman put it, "if 50,000 rednecks with 12 gauge pumps in one hand and AR-15's in the other, were to show up in those places, it would be over in twenty minutes."


The N.R.A. estimated in 2012 there to be approximately 312 million firearms accounted for. It is believe that there are that many, if not more, unaccounted for. They are believed to be in the hands of 30% of the population! We can guess which persuasion the majority of them represent! It is easily imaginable that if Donald Trump called for "one million" volunteers to defend America, he would probably have that number in 48 hours. Armed and ready!

Now, let us pretend that it is Abraham Lincoln and not Donald Trump who is president...

For starters, Chris Cuomo, Rachael Maddow, and two dozen other journalists would be interned. They would be joined by Jerry Brown, Nancy Pelosi, Chuck Schumer, Rahm Emanuel, Bill de Blasio, Maxine Waters and three dozen other politicians. As was Lincoln's way, Habeas Corpus would be waived!

Trump would not do this, because it is not his way! But, he might have difficulty stemming the long suppressed anger turned joy that would flow from a silent majority that finally said, "no!"

Make no mistake! The left doesn't want this scenario! It would be remembered for the next five-hundred years as the "worst whipping in the history of the world." This is a mathematical certainty. From being satisfied with a peaceful separation, their opponents would quickly demand it all. Because they could take it!

One could expect a massive exodus. Europe and Canada, for those who could afford it. Arkansas sized Uruguay would watch it's population of three million triple in a few months. Even Africa would receive countless applications for immigration.

With the globalists expunged, both from government and media, a new start would be possible. Imagine a constitution missing the 14th, 16th and 17th amendments. Now imagine adding "English language" and "term limits" amendments.

Foreign policy would be greatly simplified by understanding that this is today, not fifty years ago. We can bring Eastern Europe into the family of civilized nations. We might need to rename N.A.T.O.. "The Coalition for World Peace" has a nice sound to it.

Meanwhile, those who attempted to compromise our great nation in favor of their own selfish agenda, would get their due.

Will it come to this? It might need to! As Thomas Jefferson so gamely phrased, "The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."