At last, the SEC breaks free of mark-to-market

One of the four parts of my plan for the financial markets – and arguably the most important one – has become the new policy of the Securities and Exchange Commission (Washington Post via NRO - The Corner):

The Securities and Exchange Commission and the Financial Accounting Standards Board have just made an announcement that, dry as it sounds, may mean a great deal: “When an active market for a security does not exist, the use of management estimates that incorporate current market participant expectations of future cash flows, and include appropriate risk premiums, is acceptable.”

Translated into English, mark-to-market is effectively gone.  Now firms with badly undervalued mortgage-backed securities don’t have to undervalue them anymore (inevitable 2008 campaign digression: John McCain is noting that he “called for a meeting of accounting professionals to discuss whether mark-to-market accounting was magnifying problems in the financial markets” – The Corner).

I have no idea whether this was related to the bailout being shot down, but I’m guessing it was.  If I’m right (huge “if” there), then the 228 Congressmen who voted the Bush-Obama-Paulson-Pelosi plan down did their country an immeasurable service.

If I’m wrong, this is still a fantastic move that can go a long way to pulling the financial markets out of the hole they’re in.

Now, we need to bring more capital into the markets by repealing Sarbanes-Oxley and cutting the capital-gains and corporate taxe rates – in other words, the rest of my plan.

There are fundamentals, and then there are fundamentals

This is what the Audacity of Hype had to say about the economy yesterday (Weekly Standard Blog):

After this immediate problem, we’ve got the long-term fundamentals that will really make sure this economy grows.

Gee, that sounds a lot like something John McCain said earlier this month (Washington Post):

“Our economy, I think, is still — the fundamentals of our economy are strong, but these are very, very difficult times,” McCain said. “I promise you, we will never put America in this position again. We will clean up Wall Street.”

Obama didn’t think to highly about the fundamentals of the economy at the time, which was two weeks ago (same WaPo link, emphasis added):

“I just think he doesn’t know,” Obama said in Grand Junction, Colo. “He doesn’t get what’s happening between the mountain in Sedona where he lives and the corridors of Washington where he works…. Why else would he say, today, of all days — just a few hours ago — that the fundamentals of the economy are still strong?   Senator — what economy are you talking about?”

I guess that just isn’t the Obama Obama knows.

David Freddoso gets it

This is what I’d like every House Republican who voted no to read and take to heart (NRO):

. . . Republicans cannot expect to win sympathy from the electorate merely by playing an obscure insiders’ blame game over who hurt whose feelings. Instead of pointing the finger at the other guy, they should boldly make the case to the American people that they have just acted to protect the voiceless taxpayers — that, for once, someone stood up, took a risk, and showed some leadership in Washington on their behalf.

Exactly.

I have to give this comment more pub!

Last night, I had this to say about Donald Trump:

There was a time when I never thought I would ever say this, but we need Donald Trump as Secretary of the Treasury.  He’d be a dramatic improvement over Henry Paulson.

Riley at Virginia Virtucon responded as follows:

A Chia Pet would be a dramatic improvement over Paulson.

No argument here!

Gary Skinner wants to know why everybody gets to raise gas prices except him

My Supervisor “asked county administrators last week to investigate possible gas price gouging in Spotsylvania County” (Free Lance Black Hole).  To be fair to Mr. Skinner, he was aware of Hurricane Ike, but he seemed upset that the price rose “the day of the hurricane.”

Maybe if he looked a bit further south he’d realize how fortunate we are that the price has receded to pre-Ike levels.  He might also want to keep in mind that several refineries were shut down before Ike made landfall, due to “speculation” that the hurricane would cause tremendous damage and wipe out power for days – which is exactly what it did.

One thing Skinner didn’t mention (and neither did FLBH reporter Dan Telvock, for that matter) was his own planto raise the price of gas for every single Spotsylvanian.

Was Gary just upset that someone beat him to the punch?

Cross-posted to Rappahannock Red

From John Hood

Fantastic commentary in reaction to the bailout flameout (NRO – The Corner, emphasis in original):

I, too, must respectfully dissent. The proper question at this moment, it seems to me, is why so many Republicans thought it necessary to vote for a horrible piece of legislation, not how to assign the “blame” for its bipartisan defeat. I’d like to see more discussion of where to assign credit for the defeat. RWL note: So would I!

There are plenty of better ways to respond to the nation’s financial woes, some already outlined here on the Corner, others available elsewhere. There remained good reasons to doubt whether the $700 billion debt-purchase scheme would truly resolve the underlying capital problem, and excellent reasons to doubt its constitutionality (shouldn’t that matter?) and fear it as a precedent for a future Obama, Clinton, or Warner administration.

But as Mark Levin argued earlier, you can either have a complex, detailed critique of why it was an unwise bill, drafted by panicky people who desperately need to take a breather and respect the traditions of deliberative republicanism, or you can make it simple: taxpayers shouldn’t be forced to purchase the bad debts of poorly managed banks. Thousands of Americans share a detailed understanding of the problem and why giving hundreds of billions of tax dollars to the next treasury secretary — whoever he or she may be — to make discretionary debt plays is not the right answer. But millions of Americans know instinctively that it is wrong to force them to bail out Wall Street. They screamed bloody murder. A majority of the members of the U.S. House heard them.

For that, we are expected to criticize Mike Pence and lionize Roy Blunt?

Count me out.

The more we speak out, the better chance this thing stays dead, and we can move on to things that will actually solve this problem, like getting government out of the way.

If you want to know why Republicans oppose the bailout, don’t disconnect them from conference calls on the bailout

The Whte House’s treatment of Leslie Carbone tells me they have forgotten the elemental lesson from Lyndon Johnson.

You know, the one about the tent . . .

Words of Wisdom from Mark Levin

Clearly, Mark hasn’t caught the fever either (NRO – The Corner):

 . . . count me among those few here who want to thank the House Republicans for taking a bold stand against what had been a stampede on a scale I have never before witnessed on matters of huge consequence. Conservatism is more than a quaint belief-system to be embraced and debated over donuts at Starbucks. It is more than a list of talking points. It is the foundation of the civil society. The liberal uses crises, real or manufactured, to expand the power of government at the expense of the individual and private property. He has spent, in earnest, 70 years evading the Constitution’s limits on governmental power. If conservatives don’t stand up to this, who will? If they don’t offer serious alternatives that address the current circumstances AND defend the founding principles, who will? The House Republicans have done both.  And I, for one, thank them.

So do I.

If you want to know why Republicans opposed the bailout, try talking to Republicans who opposed the bailout!

I am deeply shocked by the rampant ignorance running throughout elite opinion on the failed bailout.  IN particular, the “explanation: for so many nay votes would be laughable if it wasn’t so outrageous.

After the bill sank beneath the waves, John Boehner, Roy Blunt, and Eric Cantor stepped forth to blame Nancy Pelosi for turning off Republicans with a fire-breathing partisan speech.  The reaction is best summarized by Peter Wehner (NRO - The Corner):

Can they be serious? Do they realize how foolish and irresponsible they sound? On one of the most important votes they will ever cast, insisting “the speech made me do it” is lame and adolescent. The vote, after all, was on the legislation, not the speech. And to say that a dozen members of your caucus voted not out of principle but out of pique is a terrible indictment of them. I hope we learn the names of these delicate figures whose feelings were so bruised and abused.

There is, however, on small problem with this – Blunt, Cantor, and Boehner all voted aye.  How on earth can they tell us with any authority why 133 Republicans opposed this when they were not part of the 133?

If anyone would like to know why Republicans voted no, they can simply ask them.  Mike Pence was quite articulate in his explanation, as was Marsha Blackburn.  I’m sure there are plenty of others among the 133 who would be glad to explain their reasoning.  However, it is worse than pointless to pose the question to House leaders who disagreed with them.

The fact is that Cantor, Boehner, and Blunt misread their caucus.  They couldn’t sell the bill to their members, and even worse, they couldn’t predict how their members were going to vote.  How can we expect them to know why their own advice was rejected?

As we deal with the latest panic . . .

. . . it would be instructive to note the demise of the last one (“global warming”).

From Investor’s Business Daily  via NRO – Planet Gore:

The four major agencies tracking Earth’s temperature, including NASA’s Goddard Institute, report that the Earth cooled 0.7 degree Celsius in 2007, the fastest decline in the age of instrumentation, putting us back to where the Earth was in 1930.

What we should see are a bunch of lefty alarmists thoughtfully rethinking their previous statements.

What we will get, I’m afraid, is something akin to “See?  Even the climate has gone back to the Great Depression.”