American Politics during the Obama Presidency

[QUOTE=Black Shirt; 417407]WW,

In summary, you are trying to say that Obama is stupid enough to want to "self destruct" for 2012? [/QUOTE]I don't think that I have ever said Obama is stupid. He clearly isn't and wasn't smart enough to get into Columbia or Harvard law on his own cerebral merits but, that's another issue all together.

He is an ideologue and possibly a narcissist. It isn't that he is stupid it is that he can't help himself.

Here is how the election will be framed next year: unemployment of 8.5 to 10% (depending upon what accounting tricks they try) and gas prices over $5 per gallon. In my opinion, no incumbent president would survive those numbers. Ask yourself, are you better off today or four years ago (adjusting for time, of course)? If Obama wants to eliminate those two elements from the debate and secure a second term, he will need to repudiate that for which he stands. I see that as unlikely. It is far more likely that he will just try to blame republicans for all the damage that he has done to the country and vilify the citizenry of known red states. In my opinion, this won't work.

He is too little a man to admit that he is wrong. In the end, that is what will deny him a second term.

Just FYI to all our liberal friends. Exxon, the company not the monger, makes the about 7 cents a gallon profit on regular gasoline while the Federal Government taxes that same gallon of gasoline at 18. 4 cents. Seems the Fed is making over 150% more on every gallon of gas than the folks producing it. Of course they also get to tax the oil companies as well.

Estan I can tell by your posts you have no knowledge about accounting in the oil patch. I also doubt you have any idea of what it takes to produce a single gallon of gas. Be nice if you knew what you are talking about.

I don't normally submit cut and paste, but the following excerpt is the best summary I've seen of the cause of the residential housing market collapse and, thus, the current recession. The author was on the financial crisis inquiry commission, headed by Phil Angelides. Anyone familiar with California politics knows who Phil Angelides is: Member of the boards of CALPERS and the California Teachers pension fund, as well as former California State Treasurer. If you had to count on one hand the five worst run public institutions in terms of finances, these three would be on that hand. So, obviously, Democrats thought this made him qualified to head the Financial Crisis Inquiry Commission. If it takes a thief to catch a thief, then surely one boob can spot another. Such is the state of these half-wits.

At any rate, here's the excerpt:

[quote]From the beginning, Fannie and Freddie's congressional charters required them to buy only mortgages that would be acceptable to institutional investors. In other words, prime mortgages. At the time, a prime mortgage was a loan with a 10-20 percent down payment, made to a borrower with a good credit record who had sufficient income to meet his or her debt obligations after the loan was made. Fannie and Freddie operated under these standards until 1992.

The 1992 affordable housing goals required that, of all mortgages Fannie and Freddie bought in any year, at least 30 percent had to be loans made to borrowers who were at or below the median income in the places where they lived. Over succeeding years, the Department of Housing and Urban Development (HUD) increased this requirement, first to 42 percent in 1995, to 50 percent in 2000, and finally to 55 percent in 2007. It is important to note, accordingly, that this occurred during both Democratic and Republican administrations.

At the 50 percent level, Fannie and Freddie had to acquire at least one goal-eligible loan for every prime loan that they acquired, and since not all subprime loans were goals-eligible Fannie and Freddie were in effect required to buy many more subprime loans than prime loans to meet the goals. As a result of this process, by 2008, Fannie and Freddie held the credit risk of 12 million subprime or otherwise risky loans. Almost 40 percent of their single-family book of business.

But this was not by any means the full extent of the problem. HUD took Congress's enactment of the affordable housing goals as an expression of a congressional policy to reduce underwriting standards so that low-income borrowers would have greater access to mortgage credit. As outlined in my dissent, by tightening the affordable housing goals, HUD put Fannie and Freddie into competition with the Federal Housing Administration (FHA) , a government agency with an explicit mission to provide credit to low-income borrowers, and with subprime lenders such as Countrywide, that had pledged to reduce underwriting standards in order to make more mortgage credit available to low-income borrowers. Moreover, all these organizations were joined by insured banks and S&Ls, which as noted above were required under the CRA to make mortgage credit available to borrowers who are at or below 80 percent of the median income in the areas where they live.

Of course, it is possible to find borrowers who meet prime loan standards among low-income families, but it is far more difficult to find such loans among these borrowers than among middle-income groups. And when Fannie, Freddie, FHA, subprime lenders like Countrywide, and insured banks and S&Ls are all competing to find loans to borrowers in the low-income category, the inevitable result was a significant deterioration in underwriting standards.

So, for example, while one in 200 mortgages involved a down payment of 3 percent or less in 1990, by 2007 it was one in less than three. Other credit standards had also declined. As a result of this government-induced competition, by 2008 19. 2 million out of the total of 27 million subprime and other weak loans in the USA financial system could be traced directly or indirectly to USA government housing policies.[/quote][url]http://spectator.org/archives/2011/05/13/the-true-story-of-the-financia[/url]

After reading this, and thinking about the housing market, you might ask yourself: Why hasn't the commercial market suffered similar difficulties? After all, those loans frequently are packaged up just like the residential market. If was the greedy baddies on Wall Street who were responsible, why can't the same problems be found on the commercial side? Sure, things have declined, but nothing like on the residential side.

The answer is that the commercial side didn't have the market distorting government regulations, and didn't have multiple government agencies set up to promote a multi-trillion dollar social and vote getting agenda.

I know the above won't convince some. But, those people are lost already and won't be convinced no matter what the caliber of the smoking gun.

The final travesty in all this is that Dodd Frank and Obama haven't seen fit to even try to fix the cause of this problem. Fannie and Freddie lose billions each month while Barney Frank and the Dems look for the "real killers" just like OJ.

[QUOTE=Stan the Man; 417440]After reading this, and thinking about the housing market, you might ask yourself: Why hasn't the commercial market suffered similar difficulties? After all, those loans frequently are packaged up just like the residential market. If was the greedy baddies on Wall Street who were responsible, why can't the same problems be found on the commercial side? Sure, things have declined, but nothing like on the residential side.

The answer is that the commercial side didn't have the market distorting government regulations, and didn't have multiple government agencies set up to promote a multi-trillion dollar social and vote getting agenda. [/QUOTE]LOL. I barely have to lift my pinkie to refute this. Go back to my 10-05-10 post on the housing bubble (below). There [i]was[/i] a commercial real estate bubble. A big one. And the right-wing argument about the GSEs is largely about their role in creating the bubble. It was the financial sector leverage to the bursting bubble that created the credit crunch and ensuing deep recession.

The latest news is that the HUD inspector general has found that large banks defrauded the FHA and violated the False Claims Act. These banks played a major role in the housing bubble and recession, and then, unbelievably, [b]continued[/b] to screw the country through widespread improper foreclosures.

Ain't free-market capitalism great....

[QUOTE=Esten; 412937]5. In addition, commercial real estate also experienced a giant bubble over the same period, but CRE is outside the scope of the GSEs. This provides evidence of a broad-based bubble fueled by other market forces, such as speculation.

[url]http://mit.edu/cre/research/credl/rca.html[/url]

[/QUOTE]

Very noteworthy last week was Exxon CEO Rex Tillerson's explanation for the rise in oil prices. I give him credit for being honest about it. With such a huge run-up in price over the past year, common sense would tell you there must be more in play than just supply and demand. But that didn't stop the right wing from peddling their explanation that it was all Obama's fault, for not supporting domestic production. Another crock, just like Fannie and Freddie.

ExxonMobil CEO Says Oil Price Should Be $60 To $70 A Barrel.
[url]http://blogs.forbes.com/robertlenzner/2011/05/14/exxon-mobil-ceo-says-oil-price-should-be-60-70-a-barrel/[/url]

[QUOTE]Rex Tillerson, the boss of ExxonMobil admitted last week that the price of oil–based purely on supply and demand- should be in the $60 to $70 a barrel range. The reason it’s above $100 a barrel, Tillerson explained, is due to the oil majors using futures contracts to lock in current high prices, and speculation that is engineered by the high-frequency trading of quantitative hedge funds.[/QUOTE]

Esten, if your goal is to stop profiteering via oil futures speculation, it's pretty simple. You could stop it dead in its tracks by drastically increasing the margin required for the futures purchase.

For the life of me I can not see why you are so opposed to domestic production. California, Florida and the east coast should be opened to exploration. Did you know natural seepage from the oil deposits along the California coast releases as much oil each year as the Exxon Valdez incident in Alaska?

Doubt it? Go take a look at the seepage off San Diego and San Francisco alone.

Also all the hoopla from Obama about expanding leases really does not amount to much, since the lease only gives the company the right to attempt to locate petroleum and is no guarantee of finding it.

[QUOTE=Esten;417447]Very noteworthy last week was Exxon CEO Rex Tillerson's explanation for the rise in oil prices. I give him credit for being honest about it. With such a huge run-up in price over the past year, common sense would tell you there must be more in play than just supply and demand. But that didn't stop the right wing from peddling their explanation that it was all Obama's fault, for not supporting domestic production. Another crock, just like Fannie and Freddie.[/QUOTE]You're right, to an extent. However, please realize that discouraging oil and gas production in the USA would have a significant effect on the trade balance. If we were ever able to become self sufficient in energy, I suspect that would pretty well wipe out the current account deficit. Also please note that West Texas Intermediate has been selling at a $10 to $15 per barrel discount to Brent (European) crude in recent months. I believe this is in large part due to increasing oil production in North Dakota.

If, say, the EPA were to effectively ban hydraulic fracturing, and I suspect there are those in the Obama administration who'd like to do that, the effect on our energy self sufficiency would be profound. Development of oil resources would be effected, but natural gas would be a much bigger problem.

[QUOTE=Esten; 417447]Very noteworthy last week was Exxon CEO Rex Tillerson's explanation for the rise in oil prices. I give him credit for being honest about it. With such a huge run-up in price over the past year, common sense would tell you there must be more in play than just supply and demand. But that didn't stop the right wing from peddling their explanation that it was all Obama's fault, for not supporting domestic production. Another crock, just like Fannie and Freddie.

ExxonMobil CEO Says Oil Price Should Be $60 To $70 A Barrel.

[url]http://blogs.forbes.com/robertlenzner/2011/05/14/exxon-mobil-ceo-says-oil-price-should-be-60-70-a-barrel/[/url]

[/QUOTE]It is news worthy that since the week before Obama was inaugurated, spot oil prices vs. The dollar have increased a whopping 200. This is a great statistic to hang around the president's neck. It has nothing at all to do with 'speculators' and everything to do with this President's policies.

Market demand for oil has not appreciably increased over the past two years due to the global effects of Obama's Great Recession. Similarly, actual, current oil supply has not been drastically reduced (although Obama is doing his best to reduce it) , however, long-term production expectations have been damaged by this administration.

What has changed is the value of the dollar relative to the value of oil. The value of oil has remained steady while the value of the dollar has fallen. Therefore, it takes more dollars to buy a gallon of gas.

The cost of an ounce of gold and a pound of coffee have similarly increased 84% and 160, respectively. The price of a barrel of oil, expressed in ounces of gold, when the breadth and scope of the quantitative easing and loose monetary policy were becoming more evident (circa Jan 2010) , was. 0674 ounces of gold equaled one barrel of oil. In May 2011, a barrel of oil cost. 0741 ounces of gold or an increase of 3. 3% in the cost of oil versus gold. Therefore, the price of oil is maintaining its value as a rare and demanded global commodity while the value of the dollar, relative to the value of oil, has fallen. All the speculation has done is maintain oil's value in line with other valuable commodities.

By the way, it is of no consequence what an individual oil exec thinks the price of oil 'should' be nor does it establish the effect of speculators. The CEO of Shell believes, and is making long-term decisions based upon the premise that prices will stay above $100 / barrel.

[QUOTE=Wild Walleye;417453]The CEO of Shell believes, and is making long-term decisions based upon the premise that prices will stay above $100 / barrel.[/QUOTE]Exxon under both Raymond and Tillerson has been pessimistic about the future price of oil. Raymond was predicting $20 / barrel for about right now.

Doppel, I don't recall weighing in before on domestic oil production. I am not strongly opposed to it. What I do feel strongly about is (i) it should not be done in a way that takes us on a path to depleting our resources much faster than other countries, and (ii) it should be accompanied by large investments in renewable energy.

As far as higher margin requirements, I'm no expert here but seemed to work for silver. Unclear to what extent recent margin hikes for crude oil are responsible for the recent price drop. There should be pressure to limit speculation and keep oil / gas prices down up to the 2012 elections, time will tell whether that is successful or not.

Esten you are such a hoot! 'Renewable Energy', I guess you are referring to Wind and Solar which are the darlings of the Greenies.

Well let's see, Wind and Solar amounted to less than 2% of the US's energy needs per the government's own stats. Of course neither Wind nor Solar is dependable or economically feasible. Without substantial government subsidies, both in the form of direct cash payments from the government and tax write offs that would send you into a conniption fit if they were applied to the mean old oil companies these 'pipe dreams' would not exist.

We are a fossil fuel world and until someone can comes up with the next better and financially feasible energy source it is where we will stay. I know it gives folks a warm fuzzy to see those mirrors and windmills out there but it's a joke and a bad one at that.

Next thing you are going to tell me is you believe oil came from dinosaur carcasses.

[QUOTE=Doppelganger;417486]We are a fossil fuel world and until someone can comes up with the next better and financially feasible energy source it is where we will stay. [/QUOTE]An astute observation. And I might add, demand keeps increasing while supplies keep decreasing (or getting harder to obtain, take your pick). By many accounts, we will need to become significantly less dependent on oil in the next century. These are strong arguments why we should be investing in and developing a renewable energy economy now.

Doppel,

Some folks look out for their fellow man and for the future. Others just look out for themselves. Which camp are you in?

We are having way more fun over on the Golden Pussy Thread (Overpriced Chica Derangement Syndrome). Come on over and esposse your dos centavos. You're liberal dribble is getting kinda old dude!

LMAO. Happy Mongering All. Toymann

When is this thread getting closed.

Instead of talking of chicas, all you fellas are just lamenting on politics.

Esten, since I fall on the side that believes no good deed goes unpunished; it should be obvious which camp.

All I can say is God save us from folks who want to do the 'right thing' and want to drag all the rest of us along with them no matter what we may think. All Hail the Ruling Elite!

Are you aware of the theory petroleum is a naturally occurring product of nature and is still being produced? This might explain finding oil where the geology is 'wrong' and the failure of many fields' reserves to diminish at the rates originally predicted.

Esten, folks in the environmental / global warming movement are like the Renaissance Man after the Middle Ages, they believed all those before them were woefully ignorant and viewed them as Neanderthal. Trust me in 50 years the folks then are going to look back at us and consider our great environmental thinkers as Neanderthal. It's just the nature of man to believe each generation is at the pinnacle of knowledge.

Monger on Dude!