comMITTed to Romney!

In case we wild and crazy Americans think we are the only ones whose banks and stock markets fall apart like $2 watches every 20 years or so, check out my cousins over in the Emerald Isle. Seems like the dear lads have got themselves into a bit of a sticky wicket, so to speak.

Since we are on the subject of All Things Irish, as an added bonus, ( at least I’d like to think it’s a bonus ) I’d like to throw in one of my favorite Irish sayings.

“May those that love us, love us. And those that don’t love us, may God turn their hearts. And if He doesn’t turn their hearts, may He turn their ankles, so we’ll know them by their limping.”

~~John Cronin~~

By Aude Lagorce, MarketWatch

LONDON (MarketWatch) — The Irish government Tuesday said it will guarantee domestic banks’ deposits and debt for two years to allay fears of an imminent collapse of its banking system after shares in the sector lost more than a quarter of their value in Dublin Monday.

“The government has decided to put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank), covered bonds, senior debt and date subordinated debt,” the finance ministry said in a statement.

The measure sent banking shares soaring. Anglo Irish Banks rose 16% in volatile Dublin afternoon trading. Bank of Ireland shares climbed 18% and Anglo Irish Bank added 41%. Irish Life and Permanent shares gained 26%.

The recovery in the banking sector lifted the ISEQ 20, which rose 6.1% to 521.04, after a drop of roughly 13% on Monday.

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By Steve Goldstein, MarketWatch

Last update: 7:15 a.m. EDT Sept. 30, 2008

LONDON (MarketWatch) – U.S. stock futures pointed to a partial recovery Tuesday after the previous session’s historic loss on hopes the House of Representatives will pass a similar rescue plan to the $700 billion bailout package rejected in the last session.

S&P 500 futures rose 25 points to 1,143.80 and Nasdaq 100 futures added 13.5 points to 1,525.50. Dow industrial futures rose 136 points.

Overseas markets also were performing relatively well after Monday’s bruising. The Nikkei 225 tumbled 4.1% in Tokyo, but the Hang Seng closed higher and the FTSE 100 was steady.

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Gov. Romney’s former company Bain Capital LLC has teamed up with Hellman & Friedman LLC to acquire prestigious investment management firm Neuberger Berman. The headlines are sobering, but there is value out there, if you know where to look for it. Bain Capital knows where to look.

~~John Cronin~~

WSJ Online

Private-equity firms Bain Capital LLC and Hellman & Friedman LLC reached a deal to acquire a chunk of Lehman Brothers Holdings Inc.’s investment-management unit, including its prized Neuberger Berman division, for $2.15 billion.

An auction of the profitable investment-management unit began more than a month ago as Lehman scrambled to raise capital.

The Wall Street firm originally planned to sell a 55% stake in the unit, but as a result of its bankruptcy filing the entire business was placed on the block.

The price paid by Bain Capital and Hellman is a sharp discount to the amount Neuberger and Lehman’s had previously valued the unit.

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When I got the news that the House had rejected the bailout bill, my jaw hit the floor! We all knew the Dow had been under pressure pre-market and from the opening bell, but I thought the political pressure to act fast would have been overwhelming, but it didn’t turn out that way.

Stunningly, members of both parties saw things in the bill they didn’t like and they balked not only at the provisions in the bill but the price tag as well and voted the bill down. The market reacted just as you would have expected. Down hard.

If past experience is any guide, tomorrow should be a wild day on Wall Street. If the Asian markets sell off later this evening, the Euro zone markets will take their cue from them and sell off in lock step.

I can’t help feeling angry at the incompetents both inside the financial markets who never met a loan they didn’t like, to whom 30 to 1 leverage seemed like a prudent risk and toward the “regulators” inside of government who are handsomely paid to be our watchdogs while we are working 45 to 60 hours a week so that we can pay their salaries.

It’s time some folks got fired and some others need to go to jail. I hope the public won’t forget this episode in American history. This 2-3 trillion dollar debacle is not going to be swept under the rug. The public didn’t get it’s money’s worth and it’s time for the taxpayer’s to be paid back by the financial market pirates and the government pirates who just wrecked the economy.

~~John Cronin

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Breaking news on CNBC’s Squawkbox this AM, Citigroup has taken over part of Wachovia’s operations and they and the FDIC will share in some of Wachovia’s loan losses.

The Dow futures are down 162 and the banking crisis has spread overseas, with a big British bank having been nationalized over the weekend……..Developing

~~John Cronin~~

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http://www.lasvegassun.com/news/2008/sep/27/romney-america-must-correct-course/

Sat, Sep 27, 2008 (9:57 p.m.)

Former Republican presidential candidate Mitt Romney says the U.S. must fix its ailing economy and boost its military prowess or risk losing its status as a superpower.

Romney told delegates to the California Republican Party’s meeting Saturday that a secure economy is as essential as a strong military to the country’s safety.

He says it was inconceivable to him just a few months ago that financial powerhouses such as Bear Stearns and Merrill Lynch would have collapsed.

Romney also gave the GOP base plenty of red meat, praising John McCain’s performance in the presidential debate Friday.

He stressed McCain’s knowledge of foreign policy knowledge and contrasted the freedoms America enjoys with the repression in other economically prosperous countries, such as China and Russia.

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I don’t have a handle on all the details, but from what little I know at this point, it looks like we are going to get at least some of the protections I had hoped for. There will be warrants in place, ( first dibs for the beleaguered taxpayer ) executive compensation limits, no multi-million dollar golden parachutes and, surprise of surprises, they are going to get a wheel barrow out and haul back the gigantic and totally unearned bonuses that the pirates tried to sail away with!! Yeeesssss!!

~~John Cronin~~

http://online.wsj.com/article/SB122257682963083173.html

Top U.S. policy makers emerged from hours of tense negotiations with a clear message just after midnight Sunday morning: A deal to bailout U.S. financial markets has been agreed on and all that remains to be done is to commit the legislation to paper.

Treasury Secretary Henry Paulson, House Speaker Nancy Pelosi (D., Calif.), and Senate Majority Leader Harry Reid (D.), were flanked by key negotiators in the Capitol as they announced that a $700 billion plan to have Treasury buy up toxic assets had been all but finalized after hours of exhausting negotiations.

“I think we’re there,” an exhausted Mr. Paulson said, a sentiment echoed in the statements of negotiators such as House Financial Services Chairman Barney Frank (D., Mass.) and Senate Banking Committee head Christopher Dodd (D., Conn.).

A House Democratic aide said the government would be able to receive warrants it could hold until maturity from financial firms on assets received either through auctions or through direct purchases.

The summary also said the legislation would institute new executive-compensation requirements for participating companies, including “no multi million dollar golden parachutes,” limits on compensation generally, and the ability to recover “bonuses paid based on promised gains that later turn out to be false or inaccurate.”

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Interesting points made by the savvy Michael Barone in an article for TOWNHALL.COM. It is a very sobering piece, especially his conclusion that Obama seems likely to win the election.

I don’t like to root against Mr. Barone, but here’s hoping he’s wrong, just this once.

http://townhall.com/columnists/MichaelBarone/2008/09/27/are_we_at_an_inflection_point

by Michael Barone

You can sum up much of 20th century history by saying that in the 1930s Americans decided that markets didn’t work and government did, and that in the 1970s Americans decided that government didn’t work and markets did.

The protracted and painful experiences of those decades changed basic public attitudes on the balance between government and markets, between regulation and enterprise, between government aid programs and self-reliance. The breadlines and depression of the 1930s moved Americans in one direction; the gas lines and stagflation of the 1970s moved them in the other.

Which raises the question of whether the financial ructions of 2007-08 (09?) will move them back again. One reason to believe this is possible is the passage of time. Americans in the 1980s and 1990s were ready to accept deregulation and tax cuts and welfare reform because so few of them had personal memories of the 1930s.

In 1992, Bill Clinton ran as a different kind of Democrat because so many voters then had personal memories of the 1970s. Today, fewer do. Half the voters did not reach adulthood until the 1980s. They never sat behind the steering wheel in a gas line or paid monthly bills as inflation was skyrocketing. It’s plausible that they may be more open to big government programs than their elders.

Barack Obama and other Democrats have used the financial crisis to spin a narrative. The problem, they say, is deregulation and greed. This is not strictly speaking accurate. Obama and the Democrats opposed tighter regulation of the mortgage giants Fannie Mae and Freddie Mac, and John McCain supported it. Unregulated firms like hedge funds have done well, while heavily regulated banks have had troubles.

But the narrative will be advanced by the Obama-loving media … and by the passage of a giant financial bailout — er, rescue package. The likelihood, as this is written, is that Obama will be elected president and the Democrats will expand their congressional majorities. Possibly even to the 60 votes they need to effectively control the Senate.

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J.P. Morgan Chase & Co. has, with the government’s help, essentially saved the banking system from collapse. I know that sounds like an overly dramatic claim, but the mood on the floor of the NYSE this morning was approaching panic. If the two parties had not moved when they did, there might have been a widespread sell off in the market this morning. The financial stocks were off sharply in pre-market quotes and if the depositors of WaMu got a whiff of panic coming from the Street, any resulting run on WaMu could have set off something we haven’t seen in this country since 1932. A full fledged run on the banks and a resulting “bank holiday” where the banks are closed while the government attempts to restore liquidity to the system.

As it stands at 9 AM CT, the Dow is off a bit, but much more importantly, the FDIC did not have to take the hit on WaMu’s collapse. J.P. Morgan Chase’s rescue prevented that.

~~John Cronin~~

http://online.wsj.com/article/SB122238415586576687.html

In what is by far the largest bank failure in U.S. history, federal regulators seized Washington Mutual Inc. and struck a deal to sell the bulk of its operations to J.P. Morgan Chase & Co.

The collapse of the Seattle thrift, which was triggered by a wave of deposit withdrawals, marks a new low point in the country’s financial crisis. But the deal, as constructed by the Federal Deposit Insurance Corp., could hold some glimmers of hope for the beleaguered banking system because it averts any hit to the bank-insurance fund.

Instead, J.P. Morgan agreed to pay $1.9 billion to the government for WaMu’s banking operations and will assume the loan portfolio of the thrift, which has $307 billion in assets. The full cost to J.P. Morgan will be much higher, because it plans to write down about $31 billion of the bad loans and raise $8 billion in new capital. All WaMu depositors will have access to their cash, but holders of more than $30 billion in debt and preferred stock will likely see little if any recovery.

The deal will vault J.P. Morgan into first place in nationwide deposits and greatly expand its franchise.

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Michelle Malkin writes about the part that illegal immigration has played in the mortgage meltdown.

~~John Cronin~~

http://townhall.com/columnists/MichelleMalkin/2008/09/24/illegal_immigration_and_the_mortgage_mess

by Michelle Malkin

The Mother of All Bailouts has many fathers. As panicked politicians prepare to fork over $1 trillion in taxpayer funding to rescue the financial industry, they’ve fingered regulation, deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy borrowers, greedy short-sellers and minority home ownership mau-mauers (can’t call ‘em greedy, that would be racist) for blame.

But there’s one giant paternal elephant in the room that has slipped notice: how illegal immigration, crime-enabling banks and open-borders Bush policies fueled the mortgage crisis.

It’s no coincidence that most of the areas hardest hit by the foreclosure wave — Loudoun County, Va., California’s Inland Empire, Stockton and San Joaquin Valley, and Las Vegas and Phoenix, for starters — also happen to be some of the nation’s largest illegal alien sanctuaries. Half of the mortgages to Hispanics are subprime (the accursed species of loan to borrowers with the shadiest credit histories). A quarter of all those subprime loans are in default and foreclosure.

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WowOWow.com describes itself as:

wowOwow is a free daily Internet website created, run and written by Lesley Stahl, Peggy Noonan, Liz Smith, Joni Evans, Mary Wells, Sheila Nevins, Joan Juliet Buck, Whoopi Goldberg, Julia Reed, Joan Ganz Cooney, Judith Martin, Candice Bergen, Lily Tomlin, Jane Wagner, and Marlo Thomas.

Anyway, they put together their list of the “50 Sexiest Men over 50.”

I’ll give you one guess as to who made the list.

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Kiwi columnist from New Zealand says what all of us are thinking:

Somewhere in Massachusetts, Mitt Romney might be having a quiet chuckle to himself.

The man who was once favoured to be John McCain’s vice-presidential pick - before the Republican nominee banked sharply right with surprise wing-woman Sarah Palin - has probably noticed how the lie of the land has suddenly changed.

Last week as McCain flailed about on the economy, a running mate who was a businessman, Olympics entrepreneur, former governor of a state of 6.4 million and Washington ‘outsider’ might have made more political sense than a ‘hockey mom’ governor from Alaska.

McCain, who has admitted that economics is not his strong suit, spurned his chance to pick a number two who could have talked credibly about measures to aid the ailing economy.

Don’t get me wrong. I think McCain and Palin are way better than the alternative, but I must admit that neither of them is giving me warm fuzzy feelings as I hear them talk about the economic crisis.

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Drudge reports that McCain has suspended his campaign in order to devote more time to the bailout plan. One headline I just saw ( haven’t read the article ) said only 4 Republicans have signed on to support the bill that Congress is working on.

I hope for the countries’ sake that this is not a publicity stunt and a ruse to look “Presidential.” If any politician plays fast and loose with the public in a time of unprecedented financial danger, he will be swept away in November.

I don’t envy the nominees of either party at this critical juncture. To try to get your arms around a plan as massive as the one proposed by Sec’y Paulson and Fed chief Bernanke has got to be a daunting challenge, even if you had adequate time to consider all the details and make the decision to either rally behind the plan as proposed or do your best to change it.

Keep these men in your prayers, that they may be guided by Divine Providence as they attempt to restore confidence in the nation’s banking system.

~~John Cronin~~

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http://www.marketwatch.com/news/story/us-stocks-end-sharply-lower/story.aspx?guid={D42C3BA8-E4C4-4A58-9435-4D47A857CF64}

By Kate Gibson, MarketWatch

NEW YORK (MarketWatch) – Stocks on Tuesday wavered in and out of positive terrain with investors in limbo with further hearings Wednesday on the Bush administration’s $700 billion proposal to relieve banks of bad debt and bring back the troubled credit markets.

“Investors remain reluctant to stick their necks out too far, even as policy-makers meet to discuss the proposed bailout plan. A nagging fear of ‘what ifs’ is also weighing on sentiment,” said Frederic Ruffy, options strategist at WhatsTrading.com.

After triple digit rises and declines during the session, the Dow Jones Industrial Averages fell 161.51 points, or 1.5%, to end at 10,854.17, with all but three of it’s 30 components ending in the red.

In other news….

The WSJ reports that immigration levels have fallen 50% from last year’s level. Over the last several years, the U.S. had about one million immigrants come here annually, many of them illegally. The combination of high-profile law enforcement raids and the soft economy has discouraged many from coming here and has motivated upwards of 1.2 million already here to self-deport. One illegal immigrant said, “Why stay here when we don’t have papers and there is no work? We are thinking of going back after the first of the year.”

When ever we are tempted to get discouraged in the political process because our first pick, Mitt Romney, didn’t win the nomination, ask yourself this question: Where would we be today, if we had allowed the Washington elites to cram their amnesty bill down our throats in June, 2007? All these newly minted citizens would now be on welfare or collecting unemployment benefits or both. All of this would be going on in the midst of the worst credit crunch and Wall Street shakeout of our lifetimes. In addition to the trillion plus bailout of the gambling, er, I mean financial industry, we would now have millions of new entitlement clients lining up at government offices to collect their benefits.

I don’t know how everybody else feels, but I am very encouraged that political activism can work wonders when enough people get involved. IMHO, those of use who leaned hard on our elected Reps helped the U.S. dodge a bullet on this one.

One More Thing…..

THE HUNT FOR BLACK GOLD….CNBC Stocks Fox Maria Bartiromo will interview VP candidate Sarah Palin Wednesday, Sept. 24 at 9 PM ET/10 PM PT

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