From a distance: The real scandals

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The real news, the headlines, should not rest on Sarah Palin as they still do, but on the economic situation in the US. So I will start with what I consider to be a major scandal and deal with Palin as the ultimate “Manchurian Candidate” below the fold.

The major scandal I am talking about is the bailing out at your expense of Freddie Mac and Fannie Mae as reported by the New York Times and the Washington Post. I add here excerpts from major  economic newspapers:

The Financial Times:

The US Treasury has moved closer to a rescue plan for Fannie Mae and Freddie Mac, the two struggling government-sponsored mortgage groups whose fate is key to the future of the US housing industry and financial markets.

The exact form of the proposed government rescue remained unclear, but share prices for Fannie Mae and Freddie Mac declined 30.3 per cent and 26.6 per cent respectively in after-hours trading, reflecting investor concerns that the rescue plan would wipe out holders of equity in the groups while guaranteeing their debt. (read more)

The Wall Street Journal:

It is also expected to involve the government injecting capital into Fannie and Freddie. That could happen gradually on a quarter-by-quarter basis, rather than in a single move, one person familiar with the matter said. (read more)

Reuters:

Senior Bush administration and Federal Reserve officials called in top executives of Fannie Mae and Freddie Mac on Friday and told them that the government was preparing to place the two companies under federal control, officials and company executives told the New York Times.

Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson were present at meetings with James Lockhart, the director of the Federal Housing Finance Agency, the regulator of the two companies, and with Fannie Mae CEO Daniel Mudd and Freddie Mac CEO Richard Syron on Friday, Reuters can confirm. There were separate meetings with the two CEOs. (read more)

Bloomberg:

The Washington Post reported that the government would make quarterly injections of funds as the companies’ losses warranted, avoiding a large up-front taxpayer cost, citing sources it didn’t name. Debt and preferred shares would be protected, and common stock would be diluted while not wiped out, the Post said.

The New York Times said most or all of both the common and preferred shares would be worth little or nothing.(read more)

In the case of Fannie Mae the history, as I understand it, goes like this: Founded in 1938 by the government with your money. Then, to cover the Vietnam War costs, what already belonged to you was sold to you for which you spent some more of your money. Then is was provided with some healthy GSE competition,  (Freddie Mac also sponsored with your money) and left out to fare in the shark infested waters of the financial industry, always, as a GSE, fostered with guarantees from your money. Finally saved with your money which nixed your common shares (in short: your money) and now being artificially kept alive to protect the fat cats investments with your money. Impressive indeed. I dare state that, had this happened in France, there’d be Government buildings on fire by now.

Things will get better soon. There’s always this Maverick Ticket running now, which will change all that, standing up against Big Oil, Big Finance, oh yes and Big Business as a whole. Just vote for another Republican ticket and everything will change.

Not so fast! Sarah Palin is a godsend for Big Business! Why?

The rumours that Sarah Palin, who increasingly takes the focus away from the Republican Presidential candidate (serves him right) reveling in her own famebubble, has stood up to the oil companies are patently false. Very rightly The Independent calls the following the real Sarah Palin scandal:

But the woman who could soon be a 72-year-old’s heartbeat away from the United States presidency has an environmental policy so toxic it would make the incumbent, George Bush, blush.

Mr McCain has stressed he is concerned about global warming and has come out against drilling in the Arctic reserve. But, in recent weeks, he has wobbled on the issue. And environmentalists are describing Mrs Palin, who denies climate change is man-made, as “either grossly misinformed or intentionally misleading”.

She wants to start drilling. She wants to block US moves to list the polar bear as an endangered species. And she has allowed big game hunters to shoot Alaska’s bears and wolves from low-flying planes.

[...]

The Palin administration has allowed Chevron to triple the amount of toxic waste it pours into the waters of Cook Inlet. This, even though the number of beluga whales in the bay has collapsed from 1,300 to 350 – the point of extinction – because of pollution and increased ship traffic.

{…]

Trish Rolfe, who runs the Sierra Club’s Alaska office, thinks Governor Palin has been a disaster for Alaska’s environment. “The idea that she stands up to the oil companies is a joke,” she says.

“The governor pays lip service to the issue of global warming but denies it is man made. She will not even spend money to help the Inupiaq villages which are about to fall into the sea.” (read more)

If John McCain is elected President and he dies or is incapacitated in office this woman will be President. John McCain is 72 years old and his health is already compromised. His running mate is the ultimate “Manchurian Candidate” if only by accident and the folly of an irresponsibly acting old man.

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