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You would think after reports on tight credit, volatile markets and rest of the panic and doom-and-gloom scenarios for which Democrats bill themselves as the saviors of the Country and the Economy, they might realize people pay attention to what they say, however ignorant it is.
You would think one of the biggest providers of stupid Senatorial sound bites, Harry “The War is Lost” Reid (D-NV), would have learned to keep his pie-hole closed when asked about things he has no knowledge of. You’d think so, but you’d be wrong.
Reid stated in a recent news conference that he had heard a major insurance company with a household name was on the verge of insolvency. Today, news is out that three different insurance companies fitting this description, “… a major insurance company — one with a name that everyone knows …” had major stock selloffs following comments by Harry Reid that can only be described as “Look at me, I’m important and have insider information!!!!”
But with investors already on high alert after the Federal Reserve’s rescue of insurance titan American International Group Inc. on Sept. 16, and with the credit crunch still making funding difficult for even the largest U.S. financial companies, Reid’s comments were the equivalent of pouring gasoline on a grease fire.
MetLife plunged $7.19, or 15%, to $40.96; Hartford dived $12.20, or 32%, to $25.91; and Prudential slid $7.15, or 11%, to $57.65.
And no one can blame short sellers, because all three of the stocks are covered by the Securities and Exchange Commission’s temporary ban on short sales of financial issues.
Investors are so skittish that even a reference to an industry, let alone a specific company is enough to trigger volatile trading. Harry Reid doesn’t understand that. That he later backtracked with these words,
A statement from his office said that Reid was “not personally aware of any particular company being on the verge of bankruptcy” and that “he has no special knowledge about nor has he talked to any insurance company officials.”
reveals his ignorance even further.
In the midst of a financial crisis, the Senate Majority leader repeats a rumor he heard and for which he admits he has absolutely no basis for believing. This fantasy, created and employed to make himself and his position more authoritative, results in a sell-off which majorly impacts 3 of the largest companies in the country, threatens the jobs and investments of perhaps millions of ordinary Americans. But we’re supposed to have faith and confidence in Senator Reid and the rest of his Democratic (and more than a few ignorant Republicans) associates in the Senate.
Harry Reid doesn’t understand even “throw-away” comments in this financial atmosphere can ignite firestorms. Yet he expects a $700 billion bailout, quickly cobbled together, haphazardly grafted onto unrelated legislation and then passed through a Democrat controlled Senate so Senators could look authoritative and responsive - this is safe? Reid and Company don’t understand how today’s minor words impact tomorrow’s Market. But their major overhauls of Constitutional strictures and Economic reality are going to be just fine? See for yourself how small a spark can set off such a huge fire in this 18 second video.
Democrats caused our current financial mess with ill-advised but well-intentioned legislation like “The Community Reinvestment Act”. Their bailout solution is just as well-intentioned and just as ill-advised. There is a reason the Founders put incredible limits on the scope and power of the Federal Government’s authority. Not the least of which is that the Government should not have the power to destroy a company or an Economy with a throw away comment in a press conference. Only the people intimately involved with that company should have that authority; those working there and who invest in it.
Someone please inform Democrats, in DC and all across the US, of this. It’s too bad Nancy Pelosi couldn’t turn off Harry Reid’s microphone and shut off the power to the media’s gear for this press conference like she did to her House colleagues a while back. Somebody needs to get control of out of control Democratic, self serving blathering before it does more than savage a company or three and wreak havoc on the citizen’s finances. Next time around, Democrats might find the right words to destroy the entire Economy.
That having been said, it is possible to feel confident with a high degree of certainty how the Market will behave given proven historical and Economic models. For instance, raising taxes lowers tax revenue while lowering them raises revenue. This is consistently true across time and governments. It’s the reality behind Republican efforts to lower taxes. This cannot be disputed from an Economic standpoint so Democrats and others use the “Republicans just want to give more money back to their rich donor friends!” argument instead. This Democratic sleight of hand has the interesting dual nature of being totally true - the rich will get their taxes lowered - and totally false - those same rich will spend and invest more and so will end up paying more taxes on their increased consumption! Thus Democratic posturing and blustering in opposition to tax cuts and how to pay for them are, both on their face and at their base, without merit.
The same can be said of the current Market instability. Certainly the Market is currently volatile. But to claim the Economy is tanking or that the “biggest one day drop in points ever” means we’re all doomed is premature, to say the least. You would be a bit shaky, too, if you had planned on a $700 billion cash infusion with which to operate on Monday morning and found out Monday afternoon the loan man wasn’t going to cometh. The same thing happens on a personal level when someone’s home financing falls through at the last minute (although there obviously hasn’t been enough of that going on of late). As those with leveler heads have assured, the Market is cautiously coming back a bit this morning. No doubt it will continue to do so although there may be more dips and fits and starts along the way.
I was thinking earlier today about the huge numbers of Democratic distortions and outright deceptions swirling around in the news. Nancy Pelosi calling drilling a GOP hoax and continuing to blame Republicans for gas prices; Dennis Kucinich and other Democrats deflecting attention from their historic 91% DISapproval rating by renewing calls for W to be impeached; their deafening silence on how badly the war in Iraq is going and their insistence on sticking the many with the tab for the greed and ignorance of a few in housing speculation. All of these things and so much more await the nation foolish enough to grant these people additional power in November in the name of ‘Change’. What we need a change from is Democratic policy!
Just exactly how bad would it be for Democrats to be in charge of both the White House and Congress? While there is no way to tell for sure beyond the incontestable “Very, very bad!”, we have a fly-on-the-wall view of the destruction awaiting America’s millions. It was provided by none other than Democratic icon and NY Senator Charles “Chuck” Schumer.
Most of you are by now aware of the failure of either the second or third largest bank in US History on Friday, July 12th, 2008. Depositors staged a run on California based IndyMac to the tune of $100 million! The bank collapsed and was taken over by the federal government who opened up again this morning for business as usual. Well, except for the depositors with balances over the FDIC guaranteed $100,000 limit. As of this writing, there’s no word on what happened to balances over that amount although the first $100,000 is safe.
What you may not be aware of, as I was not, is WHY there was a run on IndyMac. I assumed, incorrectly, it was related to the subprime mortgage bailout and poor loan management and performance by IndyMac. Subprime mortgages are involved. They provided the weakness IndyMac was dealing with. However, that’s not why depositors broke the bank and headed for the hills with their cash.
Erick Erickson at RedState has the scoop. It seems Senator Schumer was not content to notify the Office of Thrift Supervision, IndyMac’s regulator, of his concerns about IndyMac’s condition and stability. Beyond that responsible notification, Senator Schumer made his concerns very public via a series of strategic leaks via letters to . When the public got wind of his concerns, they panicked and destroyed a financial institution.
“As a regulator of insured depository institutions, we do not publicly comment on the financial condition or supervisory activities related to open and operating institutions,” Reich wrote. “We believe it is critically important to maintain the confidentiality of examination and supervision information.”
He went on: “Dissemination of incomplete or erroneous information can erode public confidence, mislead depositors and investors, and cause unintended consequences, including depositor runs and panic stock trades. Rumors and innuendo cause damage to financial institutions that might not occur otherwise and these concerns drive our strict policy of privacy.”
Senator Schumer evidently felt such a responsible handling of matters such as these was, itself, irresponsible and needed a little nudge in the right direction from his office. He did not deny or even apologize for his actions. Instead he justified them in a statement issued through his office in which he said,
The home loan bank system has an obligation to lend responsibly and police its members. But it has not been doing its job. We have found the only way to get the home loan bank system to act appropriately and positively is to make public the concerns we’ve already expressed privately.
Schumer’s hubris and arrogance as evidenced by his actions were summed up in a statement by former US Comptroller of the Currency John D. Hawke.
“If Schumer continues to go public with letters raising questions about the condition of individual institutions, he will cause havoc in the banking system,” Hawke said.
“Leaking his IndyMac letter to the press was reckless and grossly irresponsible. I don’t see how he can be trusted with confidential information in the future. What this incredibly stupid conduct does is put at risk the willingness of regulators to share any information with the [congressional] oversight committees. After this, you’d be crazy to share information with Schumer.”
I opened with noting this post would give you a glimpse into government with Democrats in control. Hawke’s comments are all the description one needs when contemplating such a horror. Havoc causing; reckless; grossly irresponsible; untrustworthy; incredibly stupid; putting [America] at risk; not to be privy to confidential or delicate information. One Senator, acting as he saw fit with no thought or concern for the people affected, decided to impose his will on a segment of the American people. That they weren’t people who could hold him accountable for his actions at the ballot box is even more disgusting. His actions have done incalculable harm to the economies, jobs, futures and dreams of thousands of people associated with IndyMac; the very little people Schumer and company ceaselessly tell us they look out for.
There’s some looking out to be done here, all right. America had better look out for itself and vote, not just “No!”, but “Heck, NO!” to any Democrat seeking office in November. If we don’t, we can all sit back and look out for more destruction born of arrogance headed down from the heights of Capitol Hill courtesy of Democrats.
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