Power And Dollar

Bail Out: Fannie/Freddie or McCain?

S&P responded very well on Monday to the bailout news of Fannie Mae and Freddie Mac.  We should also expect more news generated from Bush administration to lift the economy when we move toward November.  Actions taken will be timed to trickle into the economy by late October.  We are now 54 days to November.  If this bailout were aimed to ease the credit market, then this bailout maybe a little late to help McCain.  It may work to lift a little more support, if McCain is lucky.  

 

This response also coincides with the surge of McCain in polls.  Yes, they are clearly unrelated, they got their own different causes as well.  This surge is more related to Palin, of course.  Polls don’t mean much. It is the electoral votes that matter.  if we look at the electoral votes, then we see that Obama has lost 11 electoral since 08.29 (Obama: 228; Mc Palin 185; Toss Up 125).  Obama now has 217 (Mc Palin 189, Toss Up 132).  If there is no toss up, both sides stay the same.  McCain Palin has not earned much but destabilized Obama’s electoral votes.  However, it does seem like Palin has made firm gain. 

 

This bailout is not the kind of solution Paulson has vowed to implement.  Bailout is a patch, not even a fix.  Yes, this is costly, costly enough that it now became an item into next year’s budget.  What is the next step for the federal government?  Is there an exit strategy for this bailout?  Federal government ought not to own these enterprises, although they are Government Sponsored Enterprises.  With such a huge price tag, how can the federal government unload them?  What kind of effect will it then be when the government unloads?

 

The kind of solution Paulson wanted probably meant to make both Fannie Mae and Freddie Mac to have smaller market share so that there will be more competitors in that segment.  However, bailing them out means that option is shut for another one or two presidential administrations.  Subsidizing for political purpose does not mean it is economic for the whole society.  However, bailing them out may mean suffocating all competition in that market.  Fannie Mae and Freddie Mac are now nationalized.  If they continue to monopolize that portion of mortgage market, it may become more and more difficult for the small retail banks to keep their residential mortgage portfolio healthy.  That is another risk Paulson has chosen to take.  So, is this bail out for the health of economy or for presidential election?

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September 10, 2008 - Posted by | Barack Obama, Current Events, Democrats, election, Election 2008, John McCain, mccain, obama, Palin, politics, Republican, Sarah Palin, wordpress-political-blogs

2 Comments »

  1. Every time I watch the news in regards to our election I am become disappointed. We have given the Republican party 8yrs. 8yrs. towards getting it together and getting it right. They have not done so; however, they have continued to act in the interests of big organizations and companies, as they line each others pockets with profits. I am discouraged as people forget 8yrs. of damn near depression just because the Republican party has nominated a female VP candidate. I am astounded as women voters have jumped ship and abandonded the Democratic ticket because now there is a woman on the Republican ticket. It is the most ignorant and irresponsible thing to do, when the candidate doesn’t even reflect any of your views or interests. Oh, she’s a woman I must support her. What about experience and her intensions as VP or even President? Do the women who now support her know that she is pro-life even if the victim has been raped, mollested, or violated? How can any woman share that perspective? I am confused with how we as Americans make our decisions. With emotions, biasness, prejudices, logic, open or closed minded…

    Comment by Fitzgerald | September 10, 2008 | Reply

  2. Obama accuses McCain/Palin of attacking his record … what record? Obama is an empty suit who hasn’t done anything. That’s why instead of running on his record, he has to run a campaign based upon attacking McCain/Palin. Obama’s tactic has always been ‘the best defense is a good offense’. For example, Obama will make the pig/lipstick smear, just days after Palin scores points with the ‘pitbull/lipstick statement … then he disingenuously acts as if there’s no connection. He did it again with Palin’s community organizer is similar to a mayor, but with out the responsibility … which everyone knows was Palin’s response to Obama demeaning her experience as a small town mayor. There’s nothing wrong with being a community organizer, but being a community organizer is certainly not credentials for becoming President of the United States! Obama has done this numerous times. The changes Obama wants would dramatically weaken this country, in terms of our economy and our national defense.

    Comment by Gina | September 14, 2008 | Reply


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