An example of a Dumb Ass

Here we have a record of a dumb ass sending
and receiving text messages while on the job. The records obtained from Sanchez's cell phone provider also show that he sent 24 text messages and received 21 over a two-hour period during his morning shift. During his afternoon shift, he received seven messages and sent five. Sanchez sent his last text message at 4:22:01 p.m. According to the freight train's on-board recorder, the accident occurred at 4:22:23 p.m. This idiot might as well been asleep. Because of this the dumb ass missed the yellow then red stop signals just before the accident. Sanchez was too busy on his cell phone to realize he was about to crash.
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In the case of congress we have a record also. The dumb asses missed the warning in several hearings about freddie mae and fannie mac about to go bust because of accounting procedures. Suck boy barney frank was denying anything was wrong, just like he denied having his butt buddies in his basement but paid their parking tickets outside of his queer house. While ole barney was having his butt buddy parties fannie and freddie were going bust. We have a butt buddy party going on in congress also. They are to busy covering their own butts to fix the real problem, which was caused by congress in the first place. The wrong regulation and too much regulation.
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A Los Angeles train driver sent a text message on his mobile phone 22 seconds before his train crashed, killing 25 people, investigators say.

Robert Sanchez, who was among the dead, sent 29 messages while on duty on the day of the crash, phone records show.

The National Transportation Safety Board says it is pursuing "many avenues of inquiry" into the accident's cause.

The Metrolink passenger train missed a red signal just before ploughing into a freight train on 12 September.

It was the deadliest rail crash in the US for 15 years.

"I am pleased with the progress of this major investigation to date," said acting safety board chairman Mark Rosenker.

Teenagers' claims

Mr Sanchez's phone records show that he sent his last text message at 1622:01. The accident occurred at 1622:23, according to the freight train's on-board recorder.

Investigators said they were continuing to correlate times from Mr Sanchez's mobile phone, the train recorders and data from the rail signalling system.

Investigators assess train crash in Los Angeles on 16/09/08
More than 130 people were hurt in the collision

Since the crash, train drivers in California have been banned from using mobile phones while they are on duty.

Anyone found guilty of violating the new order could now be fined up to $20,000 (£11,000).

The Metrolink passenger train was carrying 222 passengers between Los Angeles and Moorpark, north-west of the city, when the crash happened.

Rail investigators have concluded that Mr Sanchez failed to brake at a red signal and smashed into the freight train.

The force of the impact drove the passenger train's engine back inside the first carriage.

Mr Sanchez was among 25 people killed and more than 130 were injured.

The board requested his mobile phone records after two teenage train enthusiasts who befriended the driver told a local TV station they received a text message from Mr Sanchez just before the crash.

In the days after the crash, several teenage train enthusiasts told a reporter that Sanchez sent them a text message just before the collision. Federal investigators spurred by the media reports interviewed two 14-year-old boys, who they said cooperated in the investigation and provided their cell phone data.

One of the teens showed KCBS-TV a message from Sanchez, which had a 4:22 p.m. time stamp. The message read: "Yea ... usually (at) north Camarillo." The Metrolink 111 train he was operating stops in Camarillo, northwest of Chatsworth.

The collision, which also injured more than 130 people, occurred on a track shared by both freight and commuter trains.

Investigators said Sanchez was supposed to stop and allow the approaching freight train to switch onto a parallel track, but instead went past the red signal and crossed the closed switch, putting the commuter train on a collision course.

The Metrolink train was coming around a curve at 42 mph (68 kph) and the freight train was coming out of a tunnel at 41 mph (66 kph).

Federal investigators said the engineers of each train had no more than four or five seconds to react before the crash. The freight engineer activated the emergency brake two seconds before impact, but brakes were never applied on the Metrolink train.

Given the speed of the trains and the time each engineer had to see the other, a collision at that point could not have been prevented.

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Let me equate this to what is about to happen in the election. The man who never was,Barack Husain Obama, Mr Empty Suit to you is about to be elected because of the failure of congress to regulate fannie mae, freddie mac and creation of idot legislation to regulate business. Democrates and the mass media have created a crisis just before the election to insure Barack Husain Obama, a socialist
will get elected. This idiot is exactly like the dumb ass texting while operating a train. Obama will miss the signals to execute a critical step because he too will be text messaging to us about his proposed action or missed opportunity, making excuses as he does when he studders.The mass media will cover for him. America is passing the stop signal now. Americans have texted congress to stop but the butt buddies continue texting to barack husain obama. We are about to crash for the next four years into socialism or worse.

Have you noticed how many people are text messaging,
oblivious to their surroundings.
If the polls are near correct Americans are oblivious to their surroundings.The mass media is text messaging America about the empty suit, butt buddy mass media creations, and the majority of Americans are oblivious to the fact we are about to crash and burn!!!!!

ass
1. Any of several hoofed mammals of the genus Equus, resembling and closely related to the horses but having a smaller build and longer ears, and including the domesticated donkey.
2. A vain, self-important, silly, or aggressively stupid person.

Definition 2, defines barack husain obama and the democrate congress.


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Another Race Card Played

Like Obama, Ifill, who is black, is quick to play the race card at the first sign of criticism. In an interview with the Washington Post a few weeks ago, she carped: “[N]o one’s ever assumed a white reporter can’t cover a white candidate.”

It’s not the color of your skin, sweetie. It’s the color of your politics. Perhaps Ifill will be able to conceal it this week. But if the “stunning” “Breakthrough” she’s rooting for comes to pass on January 20, 2009, nobody will be fooled.

When they get caught, they squeel and play the race card. This is racist. She is a racist and has played the race card. If A black person plays the race card they are racist. Look what she said, it is obvious. She is biased,ok, it figures, but look at the race card she plays, this exposes her for what she really is.

Mr goodwill and dodad pro contribute to Obama

Barack Husain Obama is taking money from arab states and hiding this fact as mr goodwill, dodad pro etc. He has not required proof of US citizenship until recently and has done this illegally. This is documented evidence of corruption. He is a radical socialist and will destroy this country.

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Secret, Foreign Money Floods Into Obama Campaign

Monday, September 29, 2008 9:23 PM

By: Kenneth R. Timmerman


More than half of the whopping $426.9 million Barack Obama has raised has come from small donors whose names the Obama campaign won't disclose.

And questions have arisen about millions more in foreign donations the Obama campaign has received that apparently have not been vetted as legitimate.

Obama has raised nearly twice that of John McCain's campaign, according to new campaign finance report.

But because of Obama’s high expenses during the hotly contested Democratic primary season and an early decision to forgo public campaign money and the spending limits it imposes, all that cash has not translated into a financial advantage — at least, not yet.

The Obama campaign and the Democratic National Committee began September with $95 million in cash, according to reports filed with the Federal Election Commission (FEC).

The McCain camp and the Republican National Committee had $94 million, because of an influx of $84 million in public money.

But Obama easily could outpace McCain by $50 million to $100 million or more in new donations before Election Day, thanks to a legion of small contributors whose names and addresses have been kept secret.

Unlike the McCain campaign, which has made its complete donor database available online, the Obama campaign has not identified donors for nearly half the amount he has raised, according to the Center for Responsive Politics (CRP).

Federal law does not require the campaigns to identify donors who give less than $200 during the election cycle. However, it does require that campaigns calculate running totals for each donor and report them once they go beyond the $200 mark.

Surprisingly, the great majority of Obama donors never break the $200 threshold.

“Contributions that come under $200 aggregated per person are not listed,” said Bob Biersack, a spokesman for the FEC. “They don’t appear anywhere, so there’s no way of knowing who they are.”

The FEC breakdown of the Obama campaign has identified a staggering $222.7 million as coming from contributions of $200 or less. Only $39.6 million of that amount comes from donors the Obama campaign has identified.

It is the largest pool of unidentified money that has ever flooded into the U.S. election system, before or after the McCain-Feingold campaign finance reforms of 2002.

Biersack would not comment on whether the FEC was investigating the huge amount of cash that has come into Obama’s coffers with no public reporting.

But Massie Ritsch, a spokesman for CRP, a campaign-finance watchdog group, dismissed the scale of the unreported money.

“We feel comfortable that it isn’t the $20 donations that are corrupting a campaign,” he told Newsmax.

But those small donations have added up to more than $200 million, all of it from unknown and unreported donors.

Ritsch acknowledges that there is skepticism about all the unreported money, especially in the Obama campaign coffers.

“We and seven other watchdog groups asked both campaigns for more information on small donors,” he said. “The Obama campaign never responded,” whereas the McCain campaign “makes all its donor information, including the small donors, available online.”

The rise of the Internet as a campaign funding tool raises new questions about the adequacy of FEC requirements on disclosure. In pre-Internet fundraising, almost all political donations, even small ones, were made by bank check, leaving a paper trail and limiting the amount of fraud.

But credit cards used to make donations on the Internet have allowed for far more abuse.

“While FEC practice is to do a post-election review of all presidential campaigns, given their sluggish metabolism, results can take three or four years,” said Ken Boehm, the chairman of the conservative National Legal and Policy Center.

Already, the FEC has noted unusual patterns in Obama campaign donations among donors who have been disclosed because they have gone beyond the $200 minimum.

FEC and Mr. Doodad Pro

When FEC auditors have questions about contributions, they send letters to the campaign’s finance committee requesting additional information, such as the complete address or employment status of the donor.

Many of the FEC letters that Newsmax reviewed instructed the Obama campaign to “redesignate” contributions in excess of the finance limits.

Under campaign finance laws, an individual can donate $2,300 to a candidate for federal office in both the primary and general election, for a total of $4,600. If a donor has topped the limit in the primary, the campaign can “redesignate” the contribution to the general election on its books.

In a letter dated June 25, 2008, the FEC asked the Obama campaign to verify a series of $25 donations from a contributor identified as “Will, Good” from Austin, Texas.

Mr. Good Will listed his employer as “Loving” and his profession as “You.”

A Newsmax analysis of the 1.4 million individual contributions in the latest master file for the Obama campaign discovered 1,000 separate entries for Mr. Good Will, most of them for $25.

In total, Mr. Good Will gave $17,375.

Following this and subsequent FEC requests, campaign records show that 330 contributions from Mr. Good Will were credited back to a credit card. But the most recent report, filed on Sept. 20, showed a net cumulative balance of $8,950 — still well over the $4,600 limit.

There can be no doubt that the Obama campaign noticed these contributions, since Obama’s Sept. 20 report specified that Good Will’s cumulative contributions since the beginning of the campaign were $9,375.

In an e-mailed response to a query from Newsmax, Obama campaign spokesman Ben LaBolt pledged that the campaign would return the donations. But given the slowness with which the campaign has responded to earlier FEC queries, there’s no guarantee that the money will be returned before the Nov. 4 election.

Similarly, a donor identified as “Pro, Doodad,” from “Nando, NY,” gave $19,500 in 786 separate donations, most of them for $25. For most of these donations, Mr. Doodad Pro listed his employer as “Loving” and his profession as “You,” just as Good Will had done.

But in some of them, he didn’t even go this far, apparently picking letters at random to fill in the blanks on the credit card donation form. In these cases, he said he was employed by “VCX” and that his profession was “VCVC.”

Following FEC requests, the Obama campaign began refunding money to Doodad Pro in February 2008. In all, about $8,425 was charged back to a credit card. But that still left a net total of $11,165 as of Sept. 20, way over the individual limit of $4,600.

Here again, LaBolt pledged that the contributions would be returned but gave no date.

In February, after just 93 donations, Doodad Pro had already gone over the $2,300 limit for the primary. He was over the $4,600 limit for the general election one month later.

In response to FEC complaints, the Obama campaign began refunding money to Doodad Pro even before he reached these limits. But his credit card was the gift that kept on giving. His most recent un-refunded contributions were on July 7, when he made 14 separate donations, apparently by credit card, of $25 each.

Just as with Mr. Good Will, there can be no doubt that the Obama campaign noticed the contributions, since its Sept. 20 report specified that Doodad’s cumulative contributions since the beginning of the campaign were $10,965.

Foreign Donations

And then there are the overseas donations — at least, the ones that we know about.

The FEC has compiled a separate database of potentially questionable overseas donations that contains more than 11,500 contributions totaling $33.8 million. More than 520 listed their “state” as “IR,” often an abbreviation for Iran. Another 63 listed it as “UK,” the United Kingdom.

More than 1,400 of the overseas entries clearly were U.S. diplomats or military personnel, who gave an APO address overseas. Their total contributions came to just $201,680.

But others came from places as far afield as Abu Dhabi, Addis Ababa, Beijing, Fallujah, Florence, Italy, and a wide selection of towns and cities in France.

Until recently, the Obama Web site allowed a contributor to select the country where he resided from the entire membership of the United Nations, including such friendly places as North Korea and the Islamic Republic of Iran.

Unlike McCain’s or Sen. Hillary Clinton’s online donation pages, the Obama site did not ask for proof of citizenship until just recently. Clinton’s presidential campaign required U.S. citizens living abroad to actually fax a copy of their passport before a donation would be accepted.

With such lax vetting of foreign contributions, the Obama campaign may have indirectly contributed to questionable fundraising by foreigners.

In July and August, the head of the Nigeria’s stock market held a series of pro-Obama fundraisers in Lagos, Nigeria’s largest city. The events attracted local Nigerian business owners.

At one event, a table for eight at one fundraising dinner went for $16,800. Nigerian press reports claimed sponsors raked in an estimated $900,000.

The sponsors said the fundraisers were held to help Nigerians attend the Democratic convention in Denver. But the Nigerian press expressed skepticism of that claim, and the Nigerian public anti-fraud commission is now investigating the matter.

Concerns about foreign fundraising have been raised by other anecdotal accounts of illegal activities.

In June, Libyan leader Moammar Gadhafi gave a public speech praising Obama, claiming foreign nationals were donating to his campaign.

“All the people in the Arab and Islamic world and in Africa applauded this man,” the Libyan leader said. “They welcomed him and prayed for him and for his success, and they may have even been involved in legitimate contribution campaigns to enable him to win the American presidency..."

Though Gadhafi asserted that fundraising from Arab and African nations were “legitimate,” the fact is that U.S. federal law bans any foreigner from donating to a U.S. election campaign.

The rise of the Internet and use of credit cards have made it easier for foreign nationals to donate to American campaigns, especially if they claim their donation is less than $200.

Campaign spokesman LaBolt cited several measures that the campaign has adopted to “root out fraud,” including a requirement that anyone attending an Obama fundraising event overseas present a valid U.S. passport, and a new requirement that overseas contributors must provide a passport number when donating online.

One new measure that might not appear obvious at first could be frustrating to foreigners wanting to buy campaign paraphernalia such as T-shirts or bumper stickers through the online store.

In response to an investigation conducted by blogger Pamela Geller, who runs the blog Atlas Shrugs, the Obama campaign has locked down the store.

Geller first revealed on July 31 that donors from the Gaza strip had contributed $33,000 to the Obama campaign through bulk purchases of T-shirts they had shipped to Gaza.

The online campaign store allows buyers to complete their purchases by making an additional donation to the Obama campaign.

A pair of Palestinian brothers named Hosam and Monir Edwan contributed more than $31,300 to the Obama campaign in October and November 2007, FEC records show.

Their largesse attracted the attention of the FEC almost immediately. In an April 15, 2008, report that examined the Obama campaign’s year-end figures for 2007, the FEC asked that some of these contributions be reassigned.

The Obama camp complied sluggishly, prompting a more detailed admonishment form the FEC on July 30.

The Edwan brothers listed their address as “GA,” as in Georgia, although they entered “Gaza” or “Rafah Refugee camp” as their city of residence on most of the online contribution forms.

According to the Obama campaign, they wrongly identified themselves as U.S. citizens, via a voluntary check-off box at the time the donations were made.

Many of the Edwan brothers’ contributions have been purged from the FEC database, but they still can be found in archived versions available for CRP and other watchdog groups.

The latest Obama campaign filing shows that $891.11 still has not been refunded to the Edwan brothers, despite repeated FEC warnings and campaign claims that all the money was refunded in December.

A Newsmax review of the Obama campaign finance filings found that the FEC had asked for the redesignation or refund of 53,828 donations, totaling just under $30 million.

But none involves the donors who never appear in the Obama campaign reports, which the CRP estimates at nearly half the $426.8 million the Obama campaign has raised to date.

Many of the small donors participated in online “matching” programs, which allows them to hook up with other Obama supporters and eventually share e-mail addresses and blogs.

The Obama Web site described the matching contribution program as similar to a public radio fundraising drive.

“Our goal is to bring 50,000 new donors into our movement by Friday at midnight,” campaign manager David Plouffe e-mailed supporters on Sept. 15. “And if you make your first online donation today, your gift will go twice as far. A previous donor has promised to match every dollar you donate.”

FEC spokesman Biersack said he was unfamiliar with the matching donation drive. But he said that if donations from another donor were going to be reassigned to a new donor, as the campaign suggested, “the two people must agree” to do so.

This type of matching drive probably would be legal as long as the matching donor had not exceeded the $2,300 per-election limit, he said.

Obama campaign spokesman LaBolt said, “We have more than 2.5 million donors overall, hundreds of thousands of which have participated in this program.”

Until now, the names of those donors and where they live have remained anonymous — and the federal watchdog agency in charge of ensuring that the presidential campaigns play by the same rules has no tools to find out.

Regulation and “Mark to Market” Accounting Rules

The odd thing is that nobody seems to understand that it is not the markets that caused the current credit crisis, but rather accounting rules (some of which were enacted after Enron) that require firms to value their assets according to market value rather than according to performance, with some measure of risk that is realistically heavy tailed.
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Regulation and “Mark to Market” Accounting Rules

Few people realize how much of the present damage to markets is caused by the new regulations imposed by Sabannes Oxley and the “mark to market” rules imposed by FASB. How do you mark to market when there is no market? The market for troubled loans has dissolved for two reasons: no one knows what they are worth, and if an investment bank takes the loans into its portfolio it must mark them at the market price. The market is illiquid and facing not mere risk. They are facing uncertainty. No one knows what the values are or what the probabilities are.

My friend Axel Leijhonhufvud once told me a story about inflation in Latin America. No one knew what a dollar was going to be worth in a few hours. A day was a lifetime for the currency. So, when he tried to buy something a shop owner had in the window, the owner said “It is not for sale.” “Why,” asked Axel. The shop owner replied, “If I name a price and you buy it, I will feel like a fool and that I sold it for too little.” That is the situation investors face with sub prime mortgages (the equivalent of “junk” bonds). Right now only the US Treasury or the Mortgage Trust soon to be set up will buy them. But, the problem remains: how much are they worth? No one knows. They are worth more than the “mark to market” rule implies because they can be held and sold later when the market regains its liquidity.

But, the fact remains that most of these investment banks would not be bankrupt if they could price their mortgage portfolios according to a more realistic standard. Regulation seems to be forcing the bankruptcies.

Dr. Rimmer has a few salient observations to make on the current frenzy to regulate financial markets.

Nobody alive can remember as much regulation of financial markets in the U.S. as what is being proposed to Congress next week. The job will be rushed through, by the most inept Congress in recent memory. The players proposing the rules also have very little understanding of how markets work. The best we can hope for is that some of them have read Nassim’s book. For every new regulation enacted, there will be thousands of people immediatly set to work figuring out how to profit from the regulation, and the seeds for the next disaster will sprout. The odd thing is that nobody seems to understand that it is not the markets that caused the current credit crisis, but rather accounting rules (some of which were enacted after Enron) that require firms to value their assets according to market value rather than according to performance, with some measure of risk that is realistically heavy tailed. Current markets are in fact less volatile than markets ten years ago. This graph illustrates that point.

Auction markets are cruel and predatory. When hardly anybody wants an asset, the market value can quickly become close to zero, at which point someone who has lots of capital will snap it up for huge profit. The problem is not the market, but that many people were encouraged to speculate with extreme leverage, without understanding the risk. How many bank CEOs know enough math to understand stable distributions? Probably none. Does Paulson, unlikely. Does Bernanke, we would hope so, but we can’t be too sure.

Anybody who has mastered seventh grade arithmetic can figure out that no bank or money market can sustain a run. In order to earn a return, liquid assets must be invested in assets that cannot immediately be liquidated, and if many similar assets are liquidated simultaneously in a market the value will fall precipitously. Yet no one ever proposes that bank depositors or money market depositors shouldn’t all have immediate access to all of their deposits, why? How can the government guarantee money market and bank deposits through the FDIC or other agency without creating enormous “moral hazard?”

No regulation of markets will ever overcome such moral hazaard, we should be regulating depositors rather than the market. Depositors should have the expectation that they can receive some portion of their deposit immediately, but if they ask for it all they will have to wait some period of time, that increases proportionately to the size of the amount they want to withdraw AND the number of current withdrawal requests.

This will never happen. Instead we will have recurrent bail outs. The interesting thing is the false concept that the tax payer ultimately foots the bill for these things. That is not true, it is the government bond holder who first pays; he in turn demands higher rates (getting his money back), forcing inflation which pays the interest with inflated dollars. The inflation is paid for mostly by people who are not taxed; it is the ultimate tax the poor scheme — even illegal immigrants pay. I guess this will go on as long as most people cannot understand arithmetic. And the Teacher’s Union makes sure that will never happen.

Suspend Mark-To-Market Now!

This is an immediate fix for the stupid democrate crisis!

Newt Gingrich 09.29.08, 6:05 PM ET

Today, Congress voted against passing the bailout package for Wall Street. The stock market reacted immediately, falling almost 800 points. It is clear that something needs to be done, and in the coming days, a new package must be constructed that has the support of the American people that both deals with the liquidity crisis and sets the stage for long-term economic growth.

However, there is an immediate step that could be taken right now that would calm the markets and dramatically reduce taxpayer risk in any future government intervention.

Today the Treasury secretary released the following statement: "I and my colleagues at the Fed and the SEC continue to address the market challenges we are facing on a daily basis. I am committed to continuing to work with my fellow regulators to use all the tools available to protect our financial system and our economy."

While Congress and the White House consider next steps, the Treasury and its fellow regulators should follow their own counsel and take without delay the one regulatory action within their discretion that can help immediately to calm markets and dramatically reduce the taxpayer risk in any necessary government intervention: suspend mark-to-market.

Chief economist Brian S. Wesbury and his colleague Bob Stein at First Trust Portfolios of Chicago estimate the impact of the "mark-to-market" accounting rule on the current crisis as follows:

"It is true that the root of this crisis is bad mortgage loans, but probably 70% of the real crisis that we face today is caused by mark-to-market accounting in an illiquid market. What's most fascinating is that the Treasury is selling its plan as a way to put a bottom in mortgage pool prices, tipping its hat to the problem of mark-to-market accounting without acknowledging it. It is a real shame that there is so little discussion of this reality." (Emphasis added.)

If regulators on their own--or Congress, if regulators fail to use their discretion--can fix 70% of the financial crisis by changing the mark-to-market accounting rule, we should change the rule first before attempting to pass another reevaluated bailout package.

"Mark-to-Market" Accounting and the Origins of the Financial Crisis: Mark-to-market accounting (also known as "fair value" accounting) means that companies must value the assets on their balance sheets based on the latest market indicators of the price that those assets could be sold for immediately. Under such a rule, declining housing prices don't just reduce the value of defaulting mortgages. They reduce the value of all mortgages and all mortgage-related securities because the housing collateral protecting them is worth less.

Moreover, when a company in financial distress begins fire sales of its assets to raise capital to meet regulatory requirements, the market-bottom prices it sells out for become the new standard for the valuation of all similar securities held by other companies under mark-to-market. This has begun a downward death spiral for financial companies large and small.

More foreclosures and home auctions continue to depress housing prices, further reducing the value of all mortgage-related securities. As capital values decline, firms must scramble to maintain the capital required by regulation. When they try to sell assets to raise that capital, the market values of those assets are driven down further. Under mark-to-market, the company must then mark down the value of all of its assets even more.

The credit agencies see declining capital margins, so they downgrade the company's credit ratings. That makes borrowing to meet capital requirements more difficult. Declining capital and credit ratings cause the company's stock prices to decline.

Panic sets in, and no one wants to buy mortgage-related securities, which drives their value under mark-to-market regulations down toward zero. Balance sheets under mark-to-market suddenly start to show insolvency. This downward spiral shuts down lending to these companies, so they lose all liquidity (cash on hand) needed to keep company operations going. Stockholders--realizing that they will be wiped out if the companies go into bankruptcy or get taken over by the government--start panic selling, even when they know the underlying business of the company is fine.

The end result for the company is stock prices driven toward zero and bankruptcy or government takeover. The criminal liabilities imposed under Sarbanes-Oxley have driven accountants to stricter and stricter accounting evaluations and interpretations and have prevented leading executives from resisting them.

The Problems with Mark-to-Market Accounting: William Isaac, chairman of the FDIC in the 1980s under President Reagan, recently wrote in The Wall Street Journal, "During the 1980s, our underlying economic problems were far more serious than the economic problems we're facing this time around. ... It could have been much worse. The country's 10 largest banks were loaded up with Third World debt that was valued in the markets at cents on the dollar. If we had marked those loans to market prices, virtually every one of them would have been insolvent."

Isaac continues, "But what do we do when the already thin market for those assets freezes up, and only a handful of transactions occur at extremely depressed prices? ... The accounting profession, scarred by decades of costly litigation, just keeps marking down the assets as fast as it can."

He concludes, "This is contrary to everything we know about bank regulation. When there are temporary impairments of asset values, due to economic and marketplace events, regulators must give institutions an opportunity to survive the temporary impairment. Assets should not be marked to unrealistic fire sale prices. Regulators must evaluate the assets on the basis of their true economic value (a discounted cash flow analysis). If we had followed today's approach during the 1980s, we would have nationalized all of the major banks in the country, and thousands of additional banks and thrifts would have failed. I have little doubt that the country would have gone from a serious recession into a depression."

Similarly, University of Chicago Law Professor Richard Epstein, among the best in the country at law and economics analysis, recently wrote about mark-to-market accounting for today's mortgage-related securities, "Unfortunately, there is no working market to mark this paper down to. To meet their bond covenants and their capital requirements, these firms have to sell their paper at distress prices that don't reflect the upbeat fact that the anticipated income streams from this paper might well keep the firm afloat."

Alex Pollock, former head of the Federal Home Loan Bank of Chicago, explains that when the economy is in the midst of a severe downturn, the use of mark-to-market accounting "reinforces the downward cycle of panic-falling prices-losses-illiquidity-credit contraction-more panic-further falling prices-greater reported losses-no active markets. Fair value accounting adds momentum to a destructive downside overshoot."

Reform or Bust: Because existing rules requiring mark-to-market accounting are causing such turmoil on Wall Street, mark-to-market accounting should be suspended immediately so as to relieve the stress on banks and corporations. In the interim, we can use the economic value approach based on a discounted cash flow analysis of anticipated-income streams, as we did for decades before the new mark-to-market began to take hold. We can take the time to evaluate mark-to-market all over again. Perhaps a three-year rolling average to determine mark-to-market prices would be a workable permanent system.

It is not widely understood that the adoption of mark-to-market accounting rules is a major factor in the liquidity crisis which is leading companies to go bankrupt. But it is destructive to have artificial accounting rules ruin companies that would have otherwise survived under previous rules.

For companies like Bear Stearns, Lehman Brothers (nyse: LEH - news - people ) and American International Group (nyse: AIG - news - people ), suspending mark-to-market rules will come too late. But for the remaining vulnerable banks and corporations, doing away with the current mark-to-market accounting rules will safeguard against destructive pricing volatility, needless bankruptcies, job loss and huge taxpayer bailouts.

Suspending Mark-to-Market Only the First Step to Economic Recovery: In the wake of today's vote, suspending mark-to-market is an extremely important first step to take, but it is only a first step.

Congress should also consider a bold and dramatic program to restart economic growth and rebuild market efforts.

In particular, the Congress should look at the impact of the Irish 12% corporate income tax on attracting investment and jobs to Ireland and consider a dramatic cut in the U.S. corporate income tax (the highest in the world when combined with state taxes) as a step toward attracting high-value productive and desirable jobs back to the United States.

The Congress should look at the Chinese and Singapore growth patterns and match them by zeroing out the capital gains tax to induce massive flows of private capital to rebuild the market and minimize the need for a taxpayer-funded bailout.

The Congress should repeal Sarbanes-Oxley, which failed to warn of every single bankruptcy but provides a $3-million-a-year accounting and regulatory expense for every small company wishing to go public.

This is the kind of pro-growth, pro-entrepreneur program that would accelerate the American recovery and lead to the next economic period of real growth.

Former House Speaker Newt Gingrich is a senior fellow at the American Enterprise Institute (AEI). Emily Renwick is a research assistant at AEI and also contributed to this op-ed.

The 'bailout' is about people whose votes have been bought stay bought

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Shocking Video Unearthed Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis
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Here it is in a nut shell and acorn nutshell. Rush Limbaugh has got it right!
Fannie mae and Freddie Mac were turned into some kind of wild west hedge funds by the democrates
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So what got us here? Well, you can say "white guilt" got us here, political correctness got it here, or a combination of all those things. Democrats' desire to socialize the country got us here. Efforts to stop it failing -- and we're on the verge of even more of it, ladies and gentlemen. Stanley Kurtz has been researching Obama, and he has a great piece today. Let me just give you a couple excerpts. "What exactly does a 'community organizer' do?" and one thing a community organizer does, if he's Barack Obama, is pressure banks to make bad loans. Obama's fingerprints are over this, too, because his group ACORN is all involved. The Community Reinvestment Act "was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now), and a group that is constantly engaged in illegal voter registration, among other things.

"That has provided an opening to radical groups like ACORN ... to abuse the law by forcing banks to make hundreds of millions of dollars in 'subprime' loans to often uncreditworthy poor and minority customers. Any bank that wants to expand or merge with another has to show it has complied with [these community redevelopment things] -- and approval can be held up by complaints filed by groups like ACORN. In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America's financial institutions." Think of ACORN as a thousand Jesse Jacksons, in terms of shaking down companies and institutions.

"Banks already overexposed by these shaky loans were pushed still further in the wrong direction when government-sponsored Fannie Mae and Freddie Mac began buying up their bad loans and offering them for sale on world markets," and by the way, speaking of that, Obama did it again in the debate (which we're going to get to). He said that our reputation in the world, I think everybody would agree, is not what it once was. He said it in Berlin' he said it to a seven-year-old kid asking him why he wants to be president. Frankly, I am fed up with it. Because, folks, if you want to know our reputation around the world -- to the extent that it is -- is in disrepair, you might take a look at the fact that a bunch of foreign banks were lied to by US institutions who said these subprime loans were AAA paper. You can buy 'em up. Do you know where bailing out foreign banks that do business on the United States on this basis because they bought up some of these assets?

So all this talk about how our image in the world has been dinged or damaged, let me tell you: to the extent that that's true, people in financial institutions around the world are saying, "What have you done to us? You've made us take on this worthless garbage paper. What have you done to us? What are you doing to your financial system?" It ain't about Iraq. It ain't about the war on terror. So there is Obama running around talking about how we've lost our esteem. That aggravates me like you cannot believe. We're going to analyzed the debate as things shake out as the program unfolds before your very eyes. Of course Obama is as close to ACORN as anybody can be, closer to ACORN than anybody ever seeking the presidency. And ACORN went out and put their own pressure on these banks and lending institutions, political correctness pressure -- take it, you know, whatever it is -- to spread this misery far and wide under the terms and definitions of things like affordable housing.

I think there's something more devious than that going on. We know several things institutionally. We know that's left wants as large a government as possible. We also know the left wants as many citizens in this country depending on government, not just for their needs but for their wants as well, but particularly their needs. We also know that owning a home in this country has been one of the most desirable things people have had. Many people, most people work themselves to the bone to be able to save up for a down payment, to be able to qualify -- and all of a sudden, the Democrats and the Clinton administration came along and said, "Why make it so hard on people? It's unfair. Let's just get 'em into homes. Let's threaten the lending institutions to loan 'em money they can't pay back. As long as home prices keep going up, this is not going to be a problem. It will be fine." Well, everything goes up goes down eventually. It's galled gravity. It's called supply and demand. It's called economic cycles, and we're where we are. So now the bailout is about making sure that all these people whose votes have been bought stay bought.
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House of Reps. Bailout Vote is TODAY -- Call Your Congressman NOW to Say NO BAILOUT:

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ALERT: Our Congressmen and Senators spent all weekend cooking up a "bipartisan compromise" BAILOUT bill -- and they want YOU AND ME to pay for it, for the next few DECADES!

WE MUST STOP THEM TODAY!!!

The Federal Reserve's ("Fed's") recent bailouts of Fannie Mae, Freddie Mac, and AIG have cost American taxpayers hundreds of billions of dollars, and the price may ultimately be in the trillions.

The current economic turmoil is a direct result of the Federal Reserve's artificial lowering of interest rates -- which spurred major banks and other corporations to back bad mortgages.

Now, Treasury Secretary Henry Paulson (former CEO of Goldman Sachs) and Federal Reserve Chairman Ben Bernanke want American taxpayers to take on $700 billion in these bad mortgage-related assets…

And our spineless, gutless, poor excuses for “leaders” on Capitol Hill are ready to SELL US OUT, and drive the U.S. economy into the dirt for YEARS to come --

Unless WE stop them, TODAY!

TAKE ACTION: The Federal Reserve's authority to use taxpayer money to bail out Wall Street must be revoked and the "Fed" must be held accountable. We, the people, need to let OUR REPRESENTATIVES in Washington know that it is time to END the Federal Reserve's stranglehold on our economic future!

THIS IS AN EMERGENCY. The House of Representatives is supposed to vote on this "Bailout Bill" TODAY. DEMAND that they reject the Paulson and Bernanke plan to prop up reckless banks at YOUR expense. Please call the Capitol Switchboard number below NOW to tell YOUR Representative to REJECT the Paulson and Bernanke plan to prop up reckless banks at your expense:

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I agree Mr Zimmer your comments about why the bill has failed makes good sense.
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Shocked the Bailout Plan Failed? You Shouldn't Be.
Posted by Robert Zimmer on 09.29.2008

Common sense about the roots of the bailout's failure in Congress, and how to move forward.

Many in the media and political establishment are shocked that the economic bailout plan failed to pass the House of Representatives today. They shouldn't be. Pundits seem puzzled by what happened and I've heard precious little talk of how we salvage things and go forward. Anybody with a pulse on the wrist of the average person in this country senses why public opposition to the bailout is so overwhelming. Those that don't get it are failing on a basic level to understand the mood of the country. Here's why the bill failed:

1. A revolt among conservative ideologues. For this group, this bailout was dead on arrival as it represents a death blow against the principle of unregulated free market capitalism, in favor – as they see it – of out-and-out socialism. They are sick of Bush's runaway spending and his sellout of conservative principles. This group is composed of the far right wing of the Republican party, plus the few libertarians left in the party (the Ron Paul wing).

2. It failed the bullshit detector with blue-collar voters. Those who are living this tough economy every day in their lives, who don't own day trade or large investment portfolios, fail to see the connection between the abstraction of Wall Street and stock market troubles and the kitchen table economic issues framing their lives. All the bailout looks like to them is more idiotic government spending to bail out corrupt rich people who got themselves into this mess and want to stick the taxpayers with the bill. This group includes plenty of Republicans, Democrats, and independents, and it's the largest public constituency that opposed the bailout.

3. Revenge of the anti-Bush left. Some pure ideological leftists simply oppose on principle any expensive proposal, domestic or abroad, brought forth by President Bush and accompanied by the worn-out "just trust us" line from the White House. Bush is dead to them. These folks tend to be more affluent, and are less connected to the average blue-collar American. Anything that stinks of Bush, whether a good idea or not, causes violent opposition with these leftists.

Combine these three groups and it's easy to understand why members of Congress were deluged with phone calls, e-mails, and faxes opposing the bailout as voted upon. Without a doubt, political shenanigans within and between the two political parties had something to do with the bailout's failure, but in large part voter pressure on Congressional members up for re-election is behind what happened today.

Meanwhile, the stock market lost 777 points today, the largest loss in American history. In more concrete terms, this represents a loss of hundreds of billions of dollars in American investments. While not all Americans have stock portfolios, a large percentage do have 401(k) plans that took a huge hit today and lost significant value. Wachovia (my bank, incidentally) failed today. We will be in a deep recession by next year -- not a mental recession, but a very real one, bailout or not.

Congressional action is imperative and leaders of both parties need to set aside the partisan garbage and get legislation passed by the end of this week, no exceptions. What a disgraceful performance by the legislative branch over the past few days. Obama and McCain should both step up and lead, or get out of the way. If Congress at large doesn't pass a new bill, they should all lose their jobs. Members should pledge to their constituents back home that they will resign if a new plan, with overwhelming bipartisan support, isn't on the president's desk by Friday night.
But lets not leave out of the plan legislation to repeal the bad legeslation that congress has passed that brought about this fabricated crisis. Remember congress
is to blame for the mess. Fannie mae and freddie mac were turned into wild west hedge funds run by the democrates for votes. This is a fact and the truth.

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Congressman Mike Pence has a good answer for this crisis

PENCE OPPOSES BAILOUT
"There are no easy answers, but the American people deserve to know there are alternatives to massive federal spending

Congressman Pence was the first lawmaker to oppose the Bush Administration's proposed bailout plan and continues to maintain his opposition

Republican Study Committee Alternative Plan


Washington, Sep 29 - U.S. Congressman Mike Pence gave the following speech from the floor of the U.S. House of Representatives today regarding the bill to bailout the financial services sector:

“I rise in opposition to the Emergency Economic Stabilization Act, and urge my colleagues, respectfully, to oppose it.

“Our nation has been confronted by a crisis in our financial markets. The President and this Congress were right to act with all deliberate speed in addressing this crisis.

“And we now have a bill that promises to bring near-term stability to our financial turmoil, but at what price?

“Benjamin Franklin said in 1759: ‘They that can give up liberty to purchase a little temporary safety deserve neither liberty nor safety.’

“Economic freedom means the freedom to succeed and the freedom to fail.

“The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy.

“It must be said, Republicans in this Congress improved this bill, but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it.

“There are no easy answers, but the American people deserve to know there are alternatives to massive federal spending.

“The Bush Administration and this Congress have acted quickly but have largely ignored free market solutions to this crisis. The House Republican plan, as a solid alternative, would have set up an FDIC-style mandatory insurance program in which Wall Street firms would have paid to insure their mortgage-backed securities. Doing so would have made Wall Street pay the cost of this rescue, instead of Main Street.

“And while there is an option for an insurance plan in this bill, it falls far short of the substitute that Republicans desired.

“The House Republican plan would have injected liquidity into our markets through fast-acting tax strategies, releasing the economic power inherent in the American economy.

“Temporarily reducing the repatriation tax, as we did in 2005, would have brought hundreds of billions of dollars back into this economy, and the other business deductions would have helped the financial sector back on its feet.

“There were alternatives.

“So, I say to my colleagues, before you vote, ask yourselves why you came here, and vote with courage and integrity to those principles.

“If, like me, you came here because you believe in limited government and the freedom of the American marketplace, I urge you to vote in accordance with your convictions.

“Duty is ours, outcomes belong to God.

“The American people and our posterity deserve to know that there were men and women in this Congress who opposed the leviathan state in this hour.

“And if you do this, I promise you, I will stand with you and I believe with all my heart the American people will stand with you as well.

“Stand up for limited government and economic freedom. Stand up for the American taxpayer. Reject this bailout and vote ‘no’ on the Emergency Economic Stabilization Act.”

PENCE OPPOSES BAILOUT