Russ Peterson
28 Shellwind Drive
Savannah, GA 31411.
Details below.
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Fed bailout facts finally documented and revealed. (See 1 below.)
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When Obama feels threatened his heavy hand approach works through Holder to squash those in opposition to his ideas. (See 2 below.)
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Sound advice but can they execute. History leaves one in doubt. (See 3 below.)
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Ne'eman writes about Egypt's incomplete revolution. (See 4 below)
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Back from a trip to see our black belt pregnant daughter and a brief vacation at Amelia Island.
Happiest and Healthiest of New Years!
--
Dick
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1)Fed Once-Secret Loan Crisis Data Compiled by Bloomberg Released to Public
By Phil Kuntz and Bob Ivry -
A man walks past the Federal Reserve building in Washington. Photographer: Andrew Harrer/Bloomberg
Dec. 7 (Bloomberg) -- Matthew Winkler, editor-in-chief of Bloomberg News, talks about Bloomberg News' response to Federal Reserve Chairman Ben S. Bernanke's letter to four senior lawmakers yesterday that said recent news articles about the central bank's emergency lending programs contained "egregious errors." Winkler speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)
Bloomberg News today released spreadsheets showing daily borrowing totals for 407 banks and companies that tapped Federal Reserve emergency programs during the 2007 to 2009 financial crisis. It’s the first time such data have been publicly available in this form.
To download a zip file of the spreadsheets, go tohttp://bit.ly/Bloomberg-Fed-Data. For an explanation of the files, see the one labeled “1a Fed Data Roadmap.”
The day-by-day, bank-by-bank numbers, culled from about 50,000 transactions the U.S. central bank made through sevenfacilities, formed the basis of a series of Bloomberg News articles this year about the largest financial bailout in history.
“Scholars can now examine the data and continue the analysis of the Fed’s crisis management,” said Allan H. Meltzer, a professor of political economy at Carnegie Mellon University in Pittsburgh and the author of three books on the history of the U.S. central bank.
The data reflect lending from the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, theCommercial Paper Funding Facility, the Primary Dealer Credit Facility, the Term Auction Facility, the Term Securities Lending Facility, the discount window and single-tranche open market operations, or ST OMO.
Bloomberg News obtained information about the discount window and ST OMO through the Freedom of Information Act. While the Fed initially rejected a request for discount-window information, Bloomberg LP, the parent company of Bloomberg News, filed a federal lawsuit to force disclosure and won in the lower courts. In March, the U.S. Supreme Court decided not to intervene in the case, and the Fed released more than 29,000 pages of transaction data.
Additional Data
The Fed later supplied additional data to fill in gaps in its initial response. Bloomberg News is updating an interactivegraphic it first published in August to add the new information.Congress required the Fed to post data to its website in December 2010 on six broad-based programs, its assistance toBear Stearns Cos. and American International Group Inc. (AIG) and more general information on its mortgage-backed securities purchases and so-called foreign-currency liquidity swaps. Those data were presented in spreadsheets that made it difficult to gauge how much individual banks were borrowing from the various programs on any given day.
Some reported totals from media outlets and government studies varied widely. In connection with today’s release, here’s a by-the-numbers explanation of the variations:
$1.2 trillion -- The Fed’s actual lending to banks and financial companies at its single-day peak, Dec. 5, 2008, through the seven programs Bloomberg News studied in depth.
Emergency measures that targeted specific companies -- Bear Stearns, AIG, Citigroup Inc. and Bank of America Corp. -- were excluded from Bloomberg’s analysis because they were previously disclosed. Loans to these companies from the other seven programs were included.
Bloomberg excluded foreign-currency liquidity swaps because names of commercial banks that borrowed under the program haven’t been disclosed to the public.
$1.5 trillion -- The Fed’s own number to represent its peak lending. This amount included the foreign-currency liquidity swaps, according to the Fed website. Under the swap lines, the Fed lends dollars to foreign central banks, which in turn lend the money to local banks. Only the names of central banksinvolved in the transactions have been made public.
The Fed’s tally of peak lending differed from Bloomberg’s in other ways, too. It included the Term Asset-Backed Securities Loan Facility, or TALF, which Bloomberg excluded. That program’s borrowers were investors rather than banks. Also, the Fed didn’t include ST OMO. Bloomberg did, based on a March 7, 2008, news release in which Fed officials said they would use the program“to address heightened liquidity pressures in term funding markets.”
$7.77 trillion -- The amount the Fed pledged to rescue the financial industry, according to Bloomberg research that examined announced, implied or actual upper limits on lending and guarantees. This number, which represents potential commitments, not money out the door, was first published in March 2009, when it peaked.
“One of the keys to understanding why we’ve avoided another Great Depression, so far, is to see how bold the Fed was in 2008 and 2009,” said Niall Ferguson, a Harvard University history professor. “That boldness consisted of a range of contingency commitments that backstopped the banking system. Just because they weren’t used doesn’t mean they weren’t important.”
After Bloomberg included the $7.77 trillion figure in a Nov. 28, 2011, story, some media outlets mischaracterized it as the Fed’s actual lending. The Fed, in a Dec. 6 memo accompanying a letter Fed Chairman Ben S. Bernanke wrote to lawmakers, called those mischaracterizations “wildly inaccurate.”
$6.8 trillion -- The potential amount the Fed might have lent if“all eligible program applicants request assistance at once to the maximum permitted under the program guidelines,” according to a July 21, 2009, report by the Treasury Department’s Special Inspector General for the Troubled Asset Relief Program, or TARP.
In that report, the officials monitoring the Treasury Department’s $700 billion bailout fund attempted to determine the Fed’s “total potential support” related to the financial crisis.
Most of the difference between the TARP watchdog’s tally and Bloomberg’s involves one program, TALF. The inspector general attributed its $900 billion capacity to the Treasury, which was guaranteeing some of its lending. Bloomberg grouped TALF with the Fed, which created the program.
$16 trillion -- The “total transaction amounts” for Fed lending included in a July 21, 2011, study by the Government Accountability Office, a non-partisan investigative agency that reports to Congress. The Fed’s Dec. 6 memo said it was inaccurate to describe that amount as the total of its lending and guarantees, as some websites did.
The method the GAO used to produce that total differed from Bloomberg’s approach. Bloomberg built spreadsheets to show each borrower’s daily amounts outstanding, and then found the day on which those amounts peaked. The GAO tallied all cumulative loans to arrive at $16 trillion. Its report noted that the total didn’t reflect how loans’ terms varied under different Fed programs.
If a bank borrowed $1 billion overnight for 100 nights, Bloomberg’s analysis would show that the bank had a $1 billion balance at the Fed for 100 days; the GAO method that produced the $16 trillion total would sum up those transactions to $100 billion, even though the bank never owed more than 1 percent of that total.
$1.14 trillion -- A different total for Fed lending that the GAO included in the same July 21, 2011, report. The calculation is similar to, not the same as, Bloomberg’s method of arriving at its peak lending figure. The GAO accounted for differences in loan terms by multiplying each loan amount by the number of days the loan was outstanding and then dividing by the number of days in a year. Bloomberg’s figure represents peak lending on a single day.
$13 billion -- An estimate of the income that 190 banks could have made from investing the Fed loans they took. To arrive at the figure, Bloomberg found the banks’ tax-adjusted net interest margin -- that is, the difference between what they earn on loans and investments and what they pay in borrowing expenses. Such data was available for 190 of the 407 borrowers. That information is included in today’s release.
In those cases, Bloomberg multiplied each bank’s net interest margin by its average Fed debt during reporting periods in which they took emergency loans. In that calculation, Bloomberg excluded loans from the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility because that cash was passed along to money-market funds.
Penalty Rates
In its memo, the Fed said it was incorrect to write, as Bloomberg did, that banks “reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.”“Most of the Federal Reserve’s lending facilities were priced at a penalty over normal market rates so that borrowers had economic incentives to exit the facilities as market conditions normalized, and the rates that the Federal Reserve charged on its lending programs did not provide a subsidy to borrowers,” the Fed said.
An October 2008 report by Daniel Thornton, a vice president at the Federal Reserve Bank of St. Louis, said the primary credit rate, which is paid by most borrowers from the Fed’s discount window, had been “consistently lower” than the certificate of deposit and Eurodollar rates since March 2008.
‘Generally Low’
Rates that banks paid at the Term Auction Facility, a lending program created in December 2007 to augment the discount window, “have generally been low relative to rates that depository institutions would have had to pay otherwise,”Thornton said in the report.David Skidmore, a Fed spokesman, declined to comment on whether Fed programs provided a subsidy relative to actual market rates during the crisis.
Bloomberg’s income-estimate method isn’t perfect. It assumes that the banks used their Fed loans in the same way they did their other capital, for example. Still, in the absence of precise data, the approach provides an indication of banks’income from their Fed loans.
“The net interest margin is an effective way of getting at the benefits that these large banks received from the Fed,”said Gerald A. Hanweck, a former Fed economist who’s now a finance professor at George Mason University in Fairfax, Virginia.
To contact the reporters on this story: Phil Kuntz in New York at pkuntz1@bloomberg.net; Bob Ivry in New York at bivry@bloomberg.net.
To contact the editor responsible for this story: Gary Putka at gputka@bloomberg.net.
-----------------------------------------------------------------------------------------------------------------------2) Sheriff Joe 'suspicious' of motive behind Obama attacks
Is lawman's probe of president creating panic at White House?
By Bob Unruh
Sheriff Joe Arpaio of Arizona's Maricopa County has been under fire for his immigration law-enforcement policies from protesters who simply object to what he's doing, in a lawsuit alleging his department profiles on race, and from the federal government which has canceled agreements with his department to check for violators who arrive at his jail.
Now he's wondering just how much of that displeasure from Washington is being generated by the perceived White House alarm over his Cold Case Posse investigation checking out suspicions raised by area tea-party officials that Barack Obama may use or try to use fraudulent documents to be on the 2012 presidential ballot in Arizona.
In an interview with WND, the sheriff said, "I am an elected sheriff. I took an oath of office to enforce all the laws of the state of Arizona. I take that very seriously. I do report to the people."
But he said he's considering the possibility there are political connections to the circumstances that have developed.
Freshly updated! Get the latest information on Obama's fraudulent documents in the e-book, "Where's the REAL Birth Certificate?"
"The investigation, I'm not sure that's part of the puzzle or not. I wonder why they are going after me," he said. "I'm a little suspicious of what's going on. The reason I'm suspicious is that the president mentioned me recently."
He was talking about Barack Obama's recent discussion with some Hispanic journalists, and the question one raised about the government's investigation of Arpaio regarding his civil-rights record.
"The president didn't like the way I enforce 1070 (a state law regarding immigration)," he said.
Arpaio has confirmed his "Cold Case Posse" investigating Obama's presidential eligibility will release a preliminary report in February of its findings, which he expects to be "controversial."
He has described the work that is going on as "a serious law-enforcement investigation" and he said the findings will be "based in facts." Arpaio said a comprehensive report will be issued shortly after the February preliminary report.
His investigation was launched after local tea-party members expressed their concern to him about the possibility of fraud in the Obama campaign.
The investigators have experience ranging in a number of law enforcement branches, and are volunteers working without expense to Maricopa County taxpayers.
Those wishing to contribute to the 501(c)3 supporting the Cold Case Posse investigation may send tax-deductible donations to the Maricopa County Sheriff's Office at: MCSO Cold Case Posse, P.O. Box 74374, Phoenix, Ariz., 85087.
The sheriff also confirmed the Obama investigation has broadened beyond an examination of whether or not the birth certificate made public by the White House on April 27 is an authentic document. The probe, he said, is examining Obama's history in regard to his eligibility to be president under Article 2, Section 1 of the U.S. Constitution.
He said his team has amassed hundreds of pages of documentation and taken testimony from dozens of experts in preparation for a final phase of field investigation
In the interview with WND, he cited a tabloid's report that the White House is in a "panic" over the investigation.
That report comes from the Globe, which cited sources inside the White House saying that Michelle Obama "is in a panic" over the review by professional investigators.
Arpaio said he has no reason to doubt the report, as the times he has been quoted by the tabloid, the quotes have been accurate.
"Someone must pick up the Globe at the supermarket and deliver it to the White House," he told WND.
On the issue of immigration, the confrontation between Washington and the sheriff came to a head in recent days when the Department of Homeland Security's Immigration and Customs Enforcement said it no longer would use Arpaio's officers to screen detainees in Maricopa County jails.
That followed shortly after the agency's decision to revoke Arpaio's authority to access its immigration database, and follows a Justice Department review of claims his office violated civil rights of suspects.
Arpaio said his office had nearly 100 deputies trained by the federal government to investigate alleged illegal aliens, and regularly detected dozens and even hundreds to be held for deportation.
That training no longer will be used, and while the federal agency promised to send 50 agents to take over the deputies' duties, only one had been sent so far, the sheriff said.
The ICE agency declined to respond to WND requests for comment.
But thousands of aliens have been identified as suspect in recent years, Arpaio said, with his deputies averaging about 15 a day. The federal agent identified three on the first day on duty, he noted.
He also said ICE had refused to accept some detainees his deputies had identified, and his office had to transport them to the Border Patrol to avoid simply releasing them onto the streets.
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3) Don't Abandon Conservative Message, Sell it Better
By Star Parker
Several new polls come as a jolt as they reflect the dismal state of mind of the American people.
As USA Today’s Susan Page sums up the latest USA Today/Gallup poll: the nation is “…more downbeat, more dissatisfied with its political leadership and more concerned about the country’s direction than at almost any point in modern times.”
New Pew Research Center polling shows a whopping 67 percent saying that most members of congress should not be re-elected. This compared to 51 percent saying this in October 2010 before the last congressional election.
President Obama’s current approval rating in the low forties, very low for any president at this point in his term, along with the very sour national mood, should point to shaky re-election prospects for him.
But from what I see, there are serious reasons why Republicans should be worried.
One is lack of excitement Republicans feel toward their own leading candidates.
Gallup now shows a fairly even contest whether it is Romney or Gingrich matched against Obama. But it also shows most of the Obama votes are pro-Obama whereas most of the Romney and Gingrich votes are anti-Obama rather than pro-Romney or pro-Gingrich.
Other new polling data from Pew should deeply concern Republicans.
Seventy seven percent agree that there is “too much power in hands of a few rich people and large corporations.” And only 36 percent say that the country’s economic system “is generally fair to most Americans.”
When the economy is the number one issue of concern to the American people, and when the central issue regarding the economy is the extent to which government should play a role in it, this is not good news for those arguing for less government.
The central economic event of the last decade was the 2008 financial collapse.
Conservatives have made a solid case showing that the cause was government policies pushing lower lending standards to promote home ownership. This case was bolstered this week by a lawsuit filed by the Securities and Exchange Commission against top executives at government mortgage entities Fannie Mae and Freddie Mac, claiming they concealed the large volumes of sub-prime mortgages they were acquiring.
But the message that government caused the economic collapse does not appear to be reaching the grass roots.
President Obama has not backed off an inch in his pitch that the cause was inadequately regulated business. In his recent speech in Osawatomie, Kansas he went on about how “Banks and investors (were) allowed to keep packaging the risk and selling it off.”
Washington’s answer to the crisis reflects Obama’s take on things. The Dodd Frank Act enacted a major new regulatory regime on banks. Yet Fannie Mae and Freddie Mac remain standing, untouched, still sucking up taxpayer funds, and backing practically all new mortgages issued today.
It seems that Obama has captured public sentiment on this central and significant issue.
Some conclude this all means that Republicans must water down the conservative message and nominate a moderate.
But Americans crave answers, clarity, leadership. This call will not be answered by ambiguity.
Obama is no moderate. If Democrats can nominate a hard core liberal, why can’t Republicans offer a clear conservative alternative?
They can and must. But let’s remember basic salesmanship. If you’ve got the best product and its not selling, the problem is not the product but how it’s being sold.
The challenge in selling freedom only increases when times are hard and people become fearful.
The best salesperson is one who is totally sold themselves on their product.
We need a conservative leader who unwaveringly believes that a return to freedom and moral clarity is what this nation needs. And one who can convey this conviction and convince worried, struggling Americans that conservative principles are the recipe for national revival and will make their lives better.
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4)Egypt: The Incomplete Revolution
By Yisrael Ne'eman
Overall questions concerning the impact of revolutions in the Arab world during the course of 2011 are difficult to answer but one element stands out – Islam is the dominant element. Egypt, the most populous and most powerful state in the Arab World provides the greatest proof. Egypt as opposed to most countries in the Arab World can be seen as possessing the characteristics of the nation state whether one is a member of the Muslim majority or Coptic Christian minority. In essence life on the banks of the Nile is the overall determining factor. Egypt is not a tribal nor multi-ethnic, multi-religious society even with the differences separating the Upper and Lower Nile populations. The question is whether Egyptians view themselves in the secular nation state definition or whether religion will be the overall determining factor. Egyptian rejection of the nation state will lead to radical change in the Middle East as concerns identity, loyalties and policies.
With a Muslim majority of some 90% in a nation of over 80 million, Egypt is the litmus test for revolution in the Arab/Muslim World. Where Egypt leads, many will follow. If we are truly speaking of revolution, where is Egypt?
In the recent elections it is clear people are voting their identity and not just their pocketbooks. Egyptian identity as a people and nation is at stake. Who and what is Egyptian? Are they Sunni Muslim Egyptian Arabs or Egyptian Arab Sunni Muslims? It always comes down to the noun – "Arab" or "Muslim", all other terms being adjectives of description. Most in the liberal democratic West are oblivious to such ideas, certainly if one speaks of a religious identity. Not only has the separation of religion and state blinded Westerners to Middle Eastern realities but the distain for religion among these European and American secular elites leads to the consistent inability to read the changing map of Arab Muslim realities. Although the economy and corruption play a role in electoral decisions they are not the dominant factor. Here the questions are more of "What does one live for? And what does one die for?" The answer is the same for both queries is Islam. Forcing a change in identity brings about a change in societal rules, meaning the choice of the social contract – Islam or state, democracy or Islamic Sharia law. Some in the West are beginning to understand the magnitude of these shifts and are hoping that hybrid systems and loyalties will be possible.
At the moment this is a delusion, commitment to Islam and democracy are not complimentary. Liberal democracy demands loyalty – in particular to a system defending minorities and awarding equal rights, especially to women. Elections are a tool for an Islamic victory but not part of the system. Holding elections is not a value in itself. Elections are a consequence of an understanding. Do elections serve a purpose to "obtain power" and then the process is to be discarded? Or are elections a permanent pillar in the assurance of expressing "the people's will" and therefore a permanent feature?
The last round of demonstrations was held on Dec. 17 (representing more liberal democratic elements than previous, even if smaller) and was crushed with overwhelming force with barely a word of criticism by Islamists. This certainly represents failure of the more democratic parties and/or the tiny percent supporting the communists (Revolution Continues 2.35%).
As mentioned previously in these columns it is possible to use ideas as pertains to revolutionary theory in an attempt to gauge how far and to what extent an upheaval will impact a certain society. A word of caution is necessary – such theories are neither math nor science, each society has its idiosyncrasies but the general outline takes one from the point of collapse of the old regime, transitional arrangements, the rule of the moderates, the height of the revolution through the rule of the extremists or what is often referred to as the "reign of terror" and finally a return to a semblance of normalcy known as Thermidor, a term taken from the French Revolution.
In Egypt the up front representatives of the old regime are gone, having lost legitimacy due to corruption and repression of the popular will. Hosni Mubarak & Co. are banished and now on trial. But transition still involves elements of the old order and they are plenty in abundance, led by General Tantawi and the newly appointed PM Dr. Kamal al-Ganzury, a former prime minister from the Mubarak 1990s era. Both are seen as holding back the revolution despite certain shifts in policy since the January-February Tahrir protests led to the establishment of a transitional regime pending elections. Polling is under way and the Islamists, whether the hard line Muslim Brotherhood or the fanatical Salafists, are on their way to taking power. Or are they? And just how quickly and with what level of violence can the move be made?
Gaza Hamas PM Ismail Haniya was just in Cairo as a guest of the Egyptian Muslim Brotherhood urging the rule of Islam and Jihad as the answers to all problems facing the Arab/Muslim world. Haniya is the leader of the Palestinian faction. With the election results below as any indication of the overwhelming support for Islamic solutions, we can certainly expect a radical shift within a few months.
Projecting future events is quite difficult; looking for trends is more useful. The tallies for the first and second round of elections at the end of November and middle of December gave the Islamists a popular vote landslide. The Brotherhood (Freedom and Justice Party) took 48.32%, the Salafists 23.83% and al-Wasat 2.35% (moderate Islam) for a total of 74.5% so far. The Egyptian Bloc (social democrats) took 7.72% while the Wafd liberals polled only 7.38%. (Tallies reported in Jadaliyya.) Together these two democratically inclined parties managed less than the two-thirds the support given to the extremist Salafists. One can only expect the third round to bring in even more support for the Brotherhood and Salafists as the more liberal districts voted in the first round.
The Muslim Brotherhood will be the senior coalition partner in any government unless the military attempts direct rule – an unreasonable possibility. The big question will come down to who will be the junior partners or whether they will rule outright on their own? How much influence will the military wield? The Brotherhood is in a dilemma with the need for some democratic fig leaf, at least for international legitimacy. We can expect an alliance with either the Wafd liberals or Egyptian Bloc social democrats to help form a coalition. This way the Brotherhood will have someone to discredit when much goes wrong, which they will. Stabilizing the Egyptian economy is a Herculean task. To ensure their objective of continuing Islamization the Salafists need to remain in the opposition. They may very well be the next group to lead the street against the administration-to-be. The last thing the extremists need is to be associated with the everyday decision making and dysfunctioning of Egyptian society.
The next government can be expected to begin with fairly moderate policies, certainly in comparison to what the Brotherhood truly believes – such as the imposition of Sharia or Islamic law. The moderates are known to share a sense of morality and common decency within their ideological frameworks, at least when first gaining power. However, the economic challenges are already insurmountable and the army will continue to be a player in policy decisions. It will not take long before the people become restless again demanding immediate solutions. In such situations moderate governments cannot deliver as the people become increasingly desperate for "the answer" or solutions to their problems. The "rising expectations" gaps will grow at a quickening pace and lead to the next round of despair, a sense of betrayal and in this case the fanaticism represented by the Salafists or possibly al-Qaeda leaning types will rise to the fore making an even stronger case for those who believe Allah's emissaries have all the answers. It is just a matter of following His directives, these being found in Sharia law and the wisdom of the clerics.
Under such pressures once the street explodes, the more radical forces generally make their moves and in this case the ultimate battle for the heart of Egypt will be engaged. The Brotherhood may very well split between the more liberal types and those shifting towards the Salafists or the entire movement may shift to the right. With Islamization sweeping the Nile the sentiments of the average soldier will count for more than those decisions made by the Supreme Council of the Armed Forces and the military brass at large. Armies generally reflect their societies, Egypt is no different. The officer corps will need to take the loyalties of the lower ranks into consideration, thereby curbing themselves from taking on the more radical Islamists. The military could declare themselves neutral, not wanting to face the danger of insurrection or at least partial disintegration. In the end they will settle for a hybrid arrangement with the Islamists if they manage to avoid a purge, Iranian style.
Islam will dominate Egyptian and Arab politics for decades to come. We are at the beginning of a process, much more dramatic than Egypt's 1952 secular Nasserite Revolution and the Arab nationalist sweep throughout the Middle East the world witnessed sixty years ago. The difference between now and then is that nationalism of whatever stripe is not a universalist ideology, but is constrained to the national group in question. Border issues and wars over territory are almost always an element in national self-assertion but there is no world revolution for export.
Islam in the hands of the fundamentalists is a religion and revolution for export. Jihad is not just a rallying call but a value. Hence world wide ramifications are expected from the great Arab "Awakening" or "Upheaval" of 2011.
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