Diary

MI Morning Update

35 Days until Election Day

September 30, 2008

MORNING UPDATE:

COMPROMISE…FINANCIAL BAILOUT/WORK OUT FAILS…House Republicans in particular, worked to get a package that not only helped provide liquidity on Wall Street, but reflected the concerns of Main Street and taxpayers.  Republicans are pushing for suspension of "mark to market" accounting.  Democrats played politics with this bill.  Speaker Pelosi tried to play both sides.  This is NOT the option Republicans would have put forward, but political realities forced quick action and compromise…but the Democrats didn’t put up the votes…says one thing out of one side our her mouth that it’s "bipartisan" and then takes the most partisan shots we have ever seen.  Hypocritical at best…shame on the Democrats.

SUSPEND MARK TO MARKET ACCOUNTING…Newt Gingrich publishes a timely argument on how we can address the financial crisis…immediately…without tax dollars or a bailout of Wall Street.

FOX NEWS ON THE BAILOUT…here is a good special report on how we got here and attempts in 2005 to get there.  See it here.

KARL ROVE’S STATE BY STATE ANALYSIS…Karl Rove yesterday emailed an updated analysis of the electoral college breakdown based on the most recent polling.

HUCKABEE FOR HOOGENDYK…former presidential candidate Gov. Mike Huckabee will be in Michigan Wednesday, October 22 at noon from 1:30pm at Vladimir’s at 28125 Grand River, Farmington Hills.  This is a fundraiser for Jack’s U.S. Senate campaign, lunch is $100 per person or $500 for photo op.  For more information and/or to rsvp please contact [email protected] or call Liz at 248-363-1677

CBS TV -DETROIT…my commentary this weekend on Detroit TV with regard to the proposed bailout before the House Republicans made some changes for the better.

COLLEGE REPUBLICAN MAJORITY MAKERS…this weekend, College Republicans made over 7,000 phone calls in St. Joe and Battle Creek.

Every weekend from now until the election Michigan students will be picked up from campuses across Michigan and transported to state house districts where they are needed most. The Brain Drain Express will be making stops in cities across the state; from Escanaba to Saint Joseph. At each stop students will get a chance to see a little more of the state they call home as well as campaign for candidates who don’t want to see them leave.  For more information please contract Program Director Anthony Markwort at mailto: [email protected]

PALIN vs BIDEN DEBATE…coming up this week and Governor Granholm will be "playing" Governor Palin…talk about a stretch.

DEMOCRATS IN THEIR OWN WORDS…so what did the Democrats and Republicans in Congress say about Freddie Mac and Fannie Mae…and those trying to regulate the safety and soundness of these "mortgages"…ummm, who knew what…when???  This is a video EVERY taxpayer should watch…let’s see how the media covers this?

VOLUNTEERS NEEDED…we are opening up new Victory Centers daily and need more and more volunteers to make phone calls, knock on doors and put up lawn signs.  The response has been overwhelming, but Michigan will be the key battleground state and we need EVERY person willing to help in anyway they can.  Thanks again for all you do!  For more info click here.

VOTE BITTER…here is a fun website that came to me via "twitter"…a great message with a very cool t-shirt to boot.

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TODAY’S TOP STORIES

The following stories and more are available at my Articles of Interest online.

Obama in the Tank for Pritzker

By Edward Sisson
Published 9/26/2008 12:09:23 AM

Today’s banking crisis demonstrates that keeping our banks safe is the President’s highest responsibility. If our banks are collapsing, we can’t pay our bills, and our government can’t fund health care, fight wars to defend us, rebuild our roads, or make our cities safe from hurricanes and other natural disasters.

Franklin Roosevelt’s first "fireside chat" famously began, "I want to talk for a few minutes with the people of the United States about banking." Our next President’s first words to the nation are also likely to be "about banking." So which man do we want to be talking to us about banking in January 2009? Obviously, we want someone who understands why banks fail, because he’ll be able to keep our banks safe.

A Main Street Rescue

Congress passed this ‘bailout’ a long time ago.

The $700 billion financial rescue that Congress votes on today must surely rank as the least popular legislation in modern times. Most Members want it to pass, though not with their vote after it has been trashed so relentlessly in the press as a Wall Street "bailout." And yet it deserves to pass because in reality it is an attempt to shield middle America from further harm caused by the mistakes of Wall Street and Washington.

For 13 months, the U.S. economy has held up remarkably well despite the implosion in financial markets. But that has recently changed, as market strains have become a global panic that threatens to trigger a deep recession and perhaps a crash. It is hard to sell voters on insurance against damage that hasn’t occurred. (See Fannie Mae, 30-year history of.) But as Michael Darda argues, the current seizure in the credit markets is real and will do far more harm if not repaired soon. The weekend runs on Fortis in Europe and Wachovia in the U.S. should concentrate Congressional minds about what could happen if the bill fails.

Is Purchasing $700 billion of Toxic Assets the Best Way to Recapitalize the Financial System? No! It is Rather a Disgrace and Rip-Off Benefitting only the Shareholders and Unsecured Creditors of Banks

Nouriel Roubini | Sep 28, 2008

Whenever there is a systemic banking crisis there is a need to recapitalize the banking/financial system to avoid an excessive and destructive credit contraction. But purchasing toxic/illiquid assets of the financial system is not the most effective and efficient way to recapitalize the banking system. Such recapitalization – via the use of public resources – can occur in a number of alternative ways: purchase of bad assets/loans; government injection of preferred shares; government injection of common shares; government purchase of subordinated debt; government issuance of government bonds to be placed on the banks’ balance sheet; government injection of cash; government credit lines extended to the banks; government assumption of government liabilities.

In Times of Crisis, Trust Capitalism

By Joseph Calhoun

The US government is executing a coup d’etat of capitalism and I fear that we will pay the price for many years to come. Hank Paulson, Ben Bernanke and a host of others tell us the credit market is not working and the only way to get it working again is for the government to intervene. They claim this intervention is urgently needed and if we don’t act, the consequences are dire. Dire, as in New Depression dire. Have these supposed experts on capitalism forgotten how it really works?

Last week Goldman Sachs raised $10 billion in new capital in one day. They sold $5 billion in preferred stock and warrants to Berkshire Hathaway and also completed a secondary offering of common stock that raised another $5 billion. Friday, JP Morgan raised $10 billion in a secondary offering to help pay for the Washington Mutual takeunder. Both of these offerings were oversubscribed, meaning that the companies could have raised more capital if they wanted. There is not a shortage of capital for well run financial companies.

9 Michigan reps vote no on bailout

Three Democrats, six Republicans oppose $700B package to rescue Wall St.; 6 vote in favor.

David Shepardson / Detroit News Washington Bureau

WASHINGTON — Nine members of Michigan’s congressional delegation, including two locked in tight re-election races, voted against a $700 billion Wall Street bailout Monday. Six supported it.

The bill failed in the House 228-205 on Monday, pushing the Dow Jones Industrial Average down 777 points and sending congressional leaders back to the drawing board to craft a bill to buy up billions of dollars of toxic mortgage-backed securities.

Among the Michigan delegation, the voting was split, with three Democrats voting in favor, and three Democrats voting against. Six Republican members voted against the bailout, while three supported it.

State: Mich. heating bills may rise 21 percent

DAVID EGGERT • Associated Press • September 29, 2008 • From LSJ.com

Michigan residents should brace for a 21 percent jump in the cost to heat their homes with natural gas this winter.

The Michigan Public Service Commission says the average residential heating bill will be $193 a month from November through March.

The primary culprit for higher heating costs is crude oil prices that rose sharply earlier this year.

About eight in 10 Michigan homes use natural gas for space heating.

Michigan voters support use of medical marijuana, stem cells

BY DAWSON BELL and MEGHA SATYANARAYANA • FREE PRESS STAFF WRITERS • September 30, 2008

Proposals to legalize the use of marijuana for medical purposes and to ease restrictions on stem-cell research using human embryos are favored by a majority of Michigan voters, a Detroit Free Press-Local 4 Michigan Poll shows.

But political analysts and history suggest backers of the two measures, especially Proposal 2 on stem-cell research, shouldn’t feel comfortable just yet.

" ‘No’ vote campaigns are easier, and they can come late," said Ann Selzer of Selzer & Co. of Des Moines, Iowa, who conducted the poll last week.

William Kristol: How McCain wins

John McCain is on course to lose the presidential election to Barack Obama. Can he turn it around, and surge to victory?

He has a chance. But only if he overrules those of his aides who are trapped by conventional wisdom, huddled in a defensive crouch and overcome by ideological timidity.

The conventional wisdom is that it was a mistake for McCain to come back to Washington last week to engage in the attempt to craft the financial rescue legislation, and that McCain has to move on to a new topic as quickly as possible. As one McCain adviser told The Washington Post, "you’ve got to get it [the financial crisis] over with and start having a normal campaign."  Wrong.

Concerns About Palin’s Readiness as a Big Test Nears

By ADAM NAGOURNEY
Published: September 29, 2008

A month after Gov. Sarah Palin joined Senator John McCain’s ticket to a burst of excitement and anticipation among Republicans, she heads into a critical debate facing challenges from conservatives about her credentials, signs that her popularity is slipping and evidence that Republicans are worried about how much help she will be for Mr. McCain in November.

Ms. Palin, the Republican vice-presidential nominee, flew to Mr. McCain’s ranch in Sedona, Ariz., on Monday for three days of preparation with a team of his aides – a sharp contrast to the less structured preparation that led up to the senator’s first debate.

The amount of time and staff power being devoted to this was evidence of concern among Mr. McCain’s associates that Ms. Palin’s early triumphs – a well-received convention speech, her drawing of big crowds – has been overtaken by a series of setbacks, creating higher stakes for her in the debate Thursday with the Democratic nominee for vice president, Senator Joseph R. Biden Jr. of Delaware.

"This debate will probably determine her political persona for the rest of the campaign," said Saul Anuzis, the Republican chairman of Michigan. "I expect Palin to show the country she is capable, articulate and has the leadership skills necessary to serve."

The marriage of convenience is over

In the wake of the invasion of Georgia, China is seriously rethinking its relations with Russia

DIMITRY SHLAPENTOKH

From Monday’s Globe and Mail

September 28, 2008 at 11:24 PM EDT

Second honeymoons rarely, if ever, recapture the zest of lost love. Yet ever since the Soviet Union’s collapse in 1991, Russia and China have sought to rekindle the close relations that once, supposedly, existed between the USSR and Mao’s China. But this renewed Sino-Russian marriage always smacked more of convenience – aimed as it was at checking U.S. hegemony – than of true romance. And, with Russia’s recent invasion of Georgia, even the illusion of attraction has now been shattered.

During Vladimir Putin’s presidency, Chinese and Russian troops engaged in joint military manoeuvres, and the two countries became dominant powers in the Shanghai Co-operation Organization, which, to some Western observers, looked like an effort to counterbalance the North Atlantic Treaty Organization. There were also years of "Russia in China" and "China in Russia" cultural exchanges, meant to underscore that the two countries were tied together not just by geopolitical pragmatism, but by genuine cultural and historical ties.