Congress Shows Political Weakness Again

This is a post from congressman Ron Paul regarding the latest supplemental spending bill passed by congress. Once again, Ron Paul shows his true colors by opposing the fraudulent and corrupt ways of our current government leaders.


More Funding for the War in Iraq

By: Ron Paul

March 26, 2007

Last week the House passed an emergency supplemental spending bill that was the worst of all worlds. The president’s request would have already set a spending record, but the Democratic leadership packed 21 billion additional dollars of mostly pork barrel spending in attempt to win Democrat votes. The total burden on the American taxpayer for this bill alone will be an astonishing 124 billion dollars. Democrats promised to oppose the war by adding more money to fight the war than even the president requested.

I am pleased to have joined with the majority of my Republican colleagues to oppose this bill.

Among the pork added to attract votes was more than 200 million dollars to the dairy industry, 74 million for peanut farmers, and 25 million dollars for spinach farmers. Also, the bill included more than two billion dollars in unconstitutional foreign aid, including half a billion dollars for Lebanon and Eastern Europe.

What might be most disturbing, however, is the treatment of veterans in the bill. Playing politics with the funding of critical veterans medical and other assistance by adding it onto a controversial bill to attract votes strikes me as highly inappropriate. Veterans’ funding should be included in a properly structured, comprehensive appropriations bill. Better still, veterans spending should be automatically funded and not subject to yearly politicking and nit-picking.

While I have been opposed to the war in Iraq from the beginning and do believe that there is a strong constitutional role for Congress when it comes to war, I could not support what appeared to be micro-management of the war in this bill. There is a distinction between the legitimate oversight role of Congress and attempts to meddle in the details of how the war is to be fought. The withdrawal and readiness benchmarks in this bill are in my view inappropriate. That is why the president has threatened to veto this bill.

In the last Congress I co-sponsored legislation urging the president to come up with a plan to conclude our military activity in Iraq, but that legislation contained no date-specific deadlines to complete withdrawal.

Once again Congress wants to have it both ways. Back in 2002, Congress passed the authorization for the president to attack Iraq if and when he saw fit. By ignoring the Constitution, which clearly requires a declaration of war, Congress could wash its hands of responsibility after the war began going badly by citing the ambiguity of its authorization. This time, House leaders want to appear to be opposing the war by including problematic benchmarks, but they include language to allow the president to waive these if he sees fit.

To top it off, House leadership may have actually made war with Iran more likely. The bill originally contained language making it clear that the president would need congressional authorization before attacking Iran – as the Constitution requires. But this language was dropped after special interests demanded its removal. This move can reasonably be interpreted as de facto congressional authority for an attack on Iran. Let’s hope that does not happen.

Source: Ron Paul

"Correlation Crisis" - A Warning from Bank of America

If you think the worst of the subprime lending meltdown is over, then maybe you should think again.

Bank of America Warns of New `Correlation Crisis' (Update1)

By Neil Unmack

March 30 (Bloomberg) -- U.S. homebuilders may trigger a ``correlation crisis'' similar to the credit sell off in 2005 when Ford Motor Co. and General Motors Corp. lost their investment-grade credit ratings, according to Bank of America Corp.'s securities unit.

The ratings cuts to the automakers triggered losses for banks and hedge funds holding the riskiest parts of collateralized debt obligations, securities that package bonds, loans and credit-default swaps and use the income to pay investors.

An increase in the perceived risk of default by homebuilders such as Dallas-based Centex Corp. and Lennar Corp. in Miami could cause similar losses this year, Banc of America Securities LLC analysts Glen Taksler and Jeffrey Rosenberg wrote in a report today. Construction company profits have plunged since the five- year U.S. housing boom ended a year ago. Rising inventories of unsold homes and reluctance by potential buyers wary of falling prices has stifled sales.

``We see increasing risk signals that remind us of the run- up to the 2005 correlation meltdown,'' the analysts wrote in the report titled ``The Correlation Crisis of 2007?''

CDOs are divided into portions of varying levels of risk and return. The riskiest piece, known as the equity tranche, pays the highest yield and is the first to absorb losses when credit quality deteriorates.

Wider Spreads

Investors may demand a higher premium for holding the equity tranche related to the benchmark investment-grade credit-default swap index, should the cost of contracts on homebuilders in the index rise, the analysts said.

``We would not be surprised to see a potential dramatic increase in the premiums required by equity tranche holders to hold first-loss risk,'' the analysts wrote. ``A reversal in the current demand for equity tranche protection could send investment-grade index spreads significantly wider.''

Credit-default swaps are designed to protect bondholders against defaults. Buyers of the contracts receive the face value of defaulted debt in return for handing over the bonds or the cash equivalent.

The CDX Series 8 Index of investment-grade credit-default swaps includes homebuilders Centex, Lennar, Toll Brothers Inc. and Pulte Homes Inc. It also includes mortgage-lender Countrywide Home Loans Inc. and mortgage insurer and financial guarantor Radian Group Inc.

Subprime Shakeout

``While there have been some dramatic headlines and it's clear a shakeout of subprime is in progress this can take some time to work through the financial system; we haven't even seen the first wave of ABS downgrades yet,'' said Michael Hampden- Turner, a London-based analyst at Citigroup Inc. ``The question is how long do these losses take to work through the system and to what extent will they exceed expectations?''

In May 2005 equity tranches plummeted after Standard & Poor's cut the credit ratings of GM and Ford to junk, driving up the perceived risk of holding their debt and forcing investors to exit the riskiest portions. At the time, the CDX index included four auto-related companies.

The fall in equity value also forced investors to buy more protection on the investment-grade bond index to hedge their positions. That pushed up the cost of protecting against default by roughly 20 basis points, according to Bank of America. A basis point is 0.01 percentage point.

Credit-default swaps based on homebuilder bonds fell yesterday after surging this week to the highest levels since at least October 2004, the earliest date for which prices are available. Contracts tied to the debt of Miami-based Lennar, the nation's largest homebuilder by revenue, fell $7,000 per $10 million to $113,500, according to CMA Datavision.

To contact the reporter on this story: Neil Unmack in London at nunmack@bloomberg.net

Last Updated: March 30, 2007 13:49 EDT

Source: Bloomberg

America's Great Opportunity Has Arrived

America is in great need of change. Almost every American is aware of this, but most do not understand why nothing in politics ever seems to change.

Take for example the recent elections. The desire for change was clear for all to see. Democrats were being voted in and Republicans were being voted out. There is a reason for this too. Americans are fed up with the way the government is being run and they can sense that things are just not right.

The war on terror. High prices for food, gas, energy, health care, housing, etc..... The official government statistics tell us that everything is going well. Inflation is under control. Unemployment is low. The housing market is done correcting. The list goes on and on.

But have you noticed that immediately after the elections, things have gone back to business as usual? Why is this?

The reason is simple. Democrats and Republicans are no longer what they used to be. They are really just two faces of the same coin. When was the last time you heard anyone in government talking about the Constitution of the United States of America? How about the rights of individuals and the rights of the States?

Whether you vote for the Republican party or the Democrat party, the result is the same. Politicians that are interested in power and keeping things generally how they are. I used to be a staunch supporter of the Republican party. My brothers used to fight for the Democrats.

But something happened to both of us over the last decade. We slowly woke up to the fraud of the two party system. We woke up to the fact that whether it was George Bush, Bill Clinton, Hillary Clinton, Ronald Reagan or Barack Obama, it really didn't matter. They are all just players in the big fraud of the Federal Government.

Now you might be getting upset at this point because you think I have it all wrong. But when was the last time you heard any of these people discussing the Federal Reserve and fiat currency?


How many of you are aware that the Federal Reserve is neither Federal nor does it have any reserves? How many people understand that the Federal Reserve is a private banking cartel that is in control of our money?

The answer is NEVER. You won't hear any of these people talking about these types of issues because they are a part of the same game. The bankers are in control of our government and ultimately in control of us. Remember, whoever controls the money, controls the government and the power that comes with it.

How many people realize that the reason for all of the financial bubbles such as the NASDAQ bubble, the real estate bubble and the bond bubble were all caused by the endless printing of fiat currency (currency backed by nothing) of the Federal Reserve?

I could go on and on but I won't. The point of all of this is that we have a once in a lifetime chance to affect change right around the corner. There is one person in the government who does talk about the real issues in America. His name is Ron Paul and he is running for president in 2008.

If Ron Paul is elected, he has vowed to re-institute the Constitution. This is very powerful. You won't see Ron Paul getting a lot of mainstream media attention because the media is in bed with the Republicans, Democrats and Bankers. Ron Paul is a strong proponent of real money. He understands the effects of fiat currency on our nation and the problems it is causing us.

We have a chance to elect someone who will restore our rights as individuals and make our forefathers proud. You won't hear any other presidential candidates discussing the real issues this election. But Ron Paul will. It is time for all Americans to come together and take back our country one vote at a time.

The Great Global Warming Scam

Is Al Gore telling the truth? Does he really beleive what he preaches? Or does he have an alternative agenda?

Don't be fooled by all of the global warming hype! If you haven't watched this movie yet, then you really don't know the rest of the story.

Al Gore and all of the rest of the global warming cronies have drawn false conclusions regarding the cause of global warming. You will be surprised, it's not how it first appears.

Ron Paul - Wake up America

Ron Paul speaks the truth. He is a defender of the Constitution and will restore the republic if elected.

Wake up America! It is time to reinstate the Constitution of the U.S.A.

A Silver Update - What Now?

After pronouncing that Silver had "broken out" a couple of weeks ago, Silver quickly changed course and dropped significantly. Has this negated the breakout? While at first glance it may appear so, looking a little closer it seems that Silver may just be shaking out the final longs before it heads up to higher levels.

While it did break slightly below its long term up trend, it has closed back above it now and this is not unusual behavior for the tiny and easily manipulated Silver market.

Taking a look at a Point and Figure chart we see there has been no damage done and the projected price of $21.00 plus still remains.

Silver clearly needs to take out the $15.00 per ounce mark and do it convincingly to prove that it is ready to move higher.

A MUST WATCH FOR ALL AMERICANS

If you value freedom, honesty and the United States Constitution, you must watch this excellent movie:

Where does gold go from here?

Silver and gold were beaten down badly last week. Silver lost more than gold percentage wise as is usual. Looking at the weekly gold chart I do not see any real damage on the chart to speak of. The long term uptrend in gold is still in tact. Take a look.