September 29, 2012

AMERICAN THINKER
Is QE 3 Really Just Another Bailout
by Michael Iachetta
September 29, 2012

At a time when mortgage rates are at historic lows, home prices have fallen, and previous overbuilding leaves little room for growth in employment in the housing industry, why would the Federal Reserve suddenly decide to purchase $40 billion worth of mortgage securities a month supposedly in order to stimulate the housing market and thereby create more jobs? So wonders Dr. Jeffrey Herbener, Professor of Economics a Grove City College.

His answer is that the public narrative that this move is for the sake of helping unemployment is a fiction, and that the move is really "another bailout of the holders of mortgage-backed securities." These are primarily Fannie Mae and Freddie Mac, which according to Professor Herbener presently hold $2 trillion and $1 trillion worth of these securities respectively.

The Washington Examiner is likewise skeptical of the public narrative, but sees the move as being for the sake of the banks that sell mortgages to Fannie and Freddie.

"When the Fed buys securities from Fannie Mae and Freddie Mac, those agencies can then offer lower interest to banks like Wells Fargo and Bank of America that actually give mortgages to homeowners. But according to data compiled by Businessweek, the banks are not passing the savings onto mortgagors. Interest rates for home buyers are down but not nearly as far down as the rates the banks are paying. Therefore, the vast majority of the Fed's printed cash is going straight into the wallets of the banksters."

Another possibility is that this is a step toward eventually shutting down these troubled and trouble-making GSE's. On August 17 of this year, the U.S. Treasury changed the terms of its bailout of Fannie and Freddie. As reported by NBCNEWS,

"As part of the new terms, Fannie Mae and Freddie Mac will be required to reduce their investment portfolios at an annual rate of 15 percent instead of the previous 10 percent. That will put each of them on track to cut their portfolios to a targeted $250 billion in 2018, four years earlier than planned."

With Fannie Mae's investment portfolio valued at $673 as of the second quarter, and Freddie Mac's valued at $581 billion as of June, the two GSE's must sell a total of $754 billion worth of mortgage securities in order to reach the goal of each holding $250 billion. By purchasing $40 billion of mortgage securities a month from the GSEs, the Federal Reserve could help the GSEs reach this goal in 19 months.  The NBCNEWS goes on to report that "the Treasury said the changes would accelerate plans to eventually shut the companies down."  If that is the true goal of QE3, it would take the Federal Reserve less than three years to accomplish it.

Read more: http://goo.gl/sjaIk

HUMAN EVENTS
Top 10 Obama Mideast Mistakes
September 29, 2012

Despite Barack Obama’s view that his presidency would repair relations with the Muslim world, America’s standing on the Arab street has never been lower.

1. Egypt policy

The administration has been consistently one-step behind events in crafting an Egypt policy. The White House’s initial backing of President Hosni Mubarak lost any support it might have gained from the crowds in Tahrir Square. Then the United States shocked its Mideast allies by pulling support from the Egyptian leader. The United States is now faced with a hostile regime in Cairo, where a Muslim Brotherhood-headed government could hardly be bothered to act when a mob tried to overrun the U.S. embassy.

2. Iran nuclear program

During his 2008 campaign, Obama posited that the Iranian leadership was bellicose mostly in reaction to misguided policies of the Bush administration. Unlike his predecessor, he would be willing to sit down and talk with the mullahs, confident that his powers of persuasion would convince them to lay down their nuclear ambitions. Four years later, Obama seems has been more concerned about cutting back our nuclear arsenal than trying to stop Tehran.

3. Diplomatic security

How could a U.S. ambassador be at an unsecured consulate in a hostile location in the Arab world on the anniversary of September 11? Christopher Stevens’ murder by a terror mob need could have been avoided if the U.S. heeded the warnings that violence was afoot. The State Department had even issued a travel alert to Americans about going to Libya, yet the consulate had minimal security.

4. Libya explanation

Long after the entire world knew that the strike on the Libyan consulate was a terrorist attack, the Obama administration continued its laughable explanation that the assault was solely the result of a spontaneous mob enraged by an anti-Islamic film. As Sen. John McCain pointed out, protesters don’t usually bring rocket-propelled grenades to a political rally.

5. Disdain for Israel

The one ally the United States could always count on in the Middle East—Israel—has consistently gotten the shaft from the White House. Obama has shown nothing if not disdain for the Jewish state, at one point offending Israeli officials by urging a return to 1967 borders. Now Obama can’t even find time in his schedule for a face-to-face meeting with Israeli Prime Minister Benjamin Netanyahu.

6. Leading from behind in Libya

Hillary Clinton asked, “How can this happen in a country we helped to liberate?” when the U.S. ambassador was murdered. The answer goes back to the method of liberation—Obama’s sanctioning of NATO air strikes. Little regard was given to the make-up of the rebels that finally steamed-rolled to victory who are vying for power.

7. Iran protests

Before the Arab Spring, there were the Iranian protests of 2009, where any assistance from Washington, could have helped to tip the balance of power away from the hard-line Islamist leaders. Instead, Obama was still convinced of his own power to sweet-talk Ahmadinejad and he left the nascent democracy movement out to dry.

8. Syria muddle

That the Syrian uprising has turned into a crisis reminiscent of the Cold War, with Russia and China teaming against the West to support the Assad regime, is a sign that Obama’s “reset” with the Kremlin is headed to the dustbin of history. The Obama administration truly is leading from behind in Syria, with no real strategy to influence the outcome, deal with its aftermath or, mostly importantly, advance U.S. interests.

9. Hurt sensibilities

After the U.S. Embassy in Cairo was breached by an unruly mob, the diplomatic staff put out a statement condemning “the continuing efforts by misguided individuals to hurt the religious feelings of Muslims”—referring to the anti-Muslim film the crowd was protesting. While Obama later distanced himself from the statement, it is not surprising that an embassy under his watch would offer such drivel, as the placating of Muslims seems to be engrained in the administration’s DNA.

10. Cairo hubris

The hubris of Barack Obama is astonishing. Who else would actually believe that a speech to the Arab world would somehow persuade Muslims everywhere to set aside their hatred of America? Yet Obama’s key strategic initiative in the Middle East was going to Cairo in June 2009, where he sought a “new beginning” with Islam. The speech seems almost quaint today, talking about his own common bond to the faith during his childhood in Indonesia, where now mobs are burning him in effigy.

Read more:  http://goo.gl/3D0FS