Rep. Ed Royce Continues His Attack on Shareholders, Favors Running Fannie and Freddie with No Capital

During a House Financial Services Committee hearing this week on the Financial Stability Oversight Council, Royce, in an exchange with Treasury Secretary Jack Lew, continued his anti-shareholder bias and also demonstrated his lack of understanding of basic math.

A video of the exchange, posted by Rep. Royce’s office, can be found here, and we’ve pulled some of the notable excerpts below:

“One of my colleagues asked if the GSEs have repaid the money that they have borrowed from the American taxpayer. The simple answer that my colleague tried to illicit, I think, is that the payments they have made to the government now exceed the rescued funds that they received. But, Mr. Secretary, I think you agree here, this is not the real answer nor the real question. The real question is have they repaid their debt to the American taxpayer, and for that answer I think we can go to the Federal Reserve Bank of New York… The New York Fed said thattaxpayers are entitled to substantial risk premium…The false narrative that is perpetuated is that the taxpayers have been repaid, it’s time to end conservatorship, and return the GSEs to the control of shareholders. From your comment earlier, I assume you disagree with this narrative…”

Yes, taxpayers are entitled to significant compensation for the risk borne in the $187 billion bailout of Fannie and Freddie, just as they are entitled to recompense for the $426 billion dollars in bailouts of the big banks and auto industry authorized under the TARP program. What Rep. Royce fails to mention, however, is that the GSE’s are already far and away America’s most profitable bailout, having returned over $40 billion to date in profit on top of what the Treasury invested.  The “real question” here, for which we have yet to receive a “real answer,” is, “Why does the government continue to let taxpayers bear all of risk at the point of first-loss under the guise of repayment?” Secretary Lew kind of acknowledges this in his response:

“I totally agree… the risk is being borne by taxpayers on an ongoing basis and the conservatorship is not over….So I think that the right thing is to do GSE reform and get on to a new restructured system, but it is not the right time to be talking about ending the conservatorship and paying dividends.”

Via: Investors Unite

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Fed Chairman Yellen backs CBO study on minimum wage job loss

Janet Yellen, the newly-installed head of the Federal Reserve System, isexercising her political independence (she cannot be fired during her five year term as Chairman of the Fed’s Board of Governors) and telling the truth about the new minimum wage proposed by President Obama.  Joseph Lawler reports in the Examiner:

Federal Reserve Chairwoman Janet Yellen lent credence Thursday to a Congressional Budget Office study of the minimum wage that White House economists had criticized for its finding that an increase favored by President Obama would cost 500,000 jobs.

In an unusual criticism of the nonpartisan budget scorekeeper, Jason Furman, chairman of the president's Council of Economic Advisers, had responded to the CBO report by directly challenging its estimates of job losses, claiming that they "do not reflect the overall consensus view of economists."

Yellen, who held the same position Furman does under President Bill Clinton, disagreed with that assessment at a SenateBanking Committee hearing.

"CBO is as qualified as anyone to evaluate that literature," Yellen said in response to a question from Sen. Dean Heller, R-Nev. "I wouldn’t want to argue with their assessment.”

This is refreshing indeed. Furman’s statement was shocking in its dishonesty. He was pandering to the president at whose pleasure he serves. The Democrats are ginning up a campaign issue and want to pretend that raising the price of something does not cause demand to shrink. That is dishonest.

Via: American Thinker

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Revenge: Obama's Targeting of Standard and Poor's

The federal government’s lawsuit against ratings agency Standard and Poor’s has been hit by a potential bombshell. In January, the Wall Street Journal reported that Harold McGraw III, Chairman and CEO of S&P’s parent company, testified that after the agency downgraded the nation’s triple-A credit rating, he received a telephone call from then-Treasury Secretary Tim Geithner saying the ratings agency would be “looked at very carefully.”

On Monday, the Wall Street Journallearned that the call between Geithner and McGraw occurred only five minutes after Geithner met with President Obama in the Oval Office.

S&P, which garnered the information by examining Geithner’s public schedule, included it as part of a filing in federal court in the Central District of California. They contended that the timing of the Obama-Geithner conference could support the idea that they were singled out for retaliation, rather than the government’s claim they are guilty of fraud. Unsurprisingly, the Justice Department is accusing the agency of a “fishing expedition” and is urging U.S. District Judge David Carter to deny them access to the records.

In the January affidavit, McGraw submitted a sworn statement to the court, describing an unsettling chain of events that began with S&P’s U.S. debt downgrade, issued on August 5, 2011. He contends that on August 8, he was informed by an official from the Federal Reserve Bank of New York that Geithner “was very angry at S&P.” Geithner who had previously run the New York branch of the Federal Reserve, allegedly called McGraw. When McGraw returned the call, Geithner allegedly “expressed anger at the downgrade.” An argument ensued, with former Treasury Secretary contending that S&P had made an error in their assessment. McGraw countered that the agency had relied on official statistics provided by the Congressional Budget Office. According to the affidavit, Geithner continued to insist that S&P had made an error. “You are accountable for that,” he allegedly warned McGraw.

Via: Canada Free Press

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FBI STING THWARTS NY TERROR PLOT TO 'DESTROY AMERICA'S ECONOMY'

A deadly terror plot to detonate a bomb on the New York Federal Reserve Bank building Wednesday morning was thwarted, thanks to a several months’ long sting operation conducted on behalf of the FBI New York Field Office’s Joint Terrorism Task Force (JTTF). Detectives from the New York Police Department, working with the JTTF, also closely monitored the would-be bomber’s activities.

Quazi Mohammad Rezwanul Ahsan Nafis, a 21 year old Bangladeshi man who entered the United States on a student visa in January 2012, is alleged to have attempted to provide material support and resources to Al Qaeda and to use a bomb to cause damage to persons and property within the United States.

According to the criminal complaint filed in the Eastern District of New York, Nafis had come to the United States specifically for the purpose of recruiting individuals for a terror cell and carrying out an attack on American soil. Unbeknownst to Nafis, one of the individuals he attempted to recruit turned out to be a confidential human source (CHS) for the FBI.

In early July of this year, the complaint alleges, Nafis told the CHS that he intended to wage “jihad” in the US, advising that “all Muslims and Muslim sheikhs in the United States are "Talafi," meaning not true Muslims.” Nafis indicated that he was in touch with another co-conspirator in New York and a contact in Bangladesh.

Between the months of July and October, numerous meetings and consensually recorded conversations occurred between Nafis and the FBI source, wherein plans progressed for an attack on potential targets in New York’s financial district. Claiming to have Al Qaeda contacts overseas, Nafis indicated that he intended to return to Bangladesh to obtain training from the terrorist organization, and he planned on executing an attack on a high-ranking official in the US.

Nafis expressed an eagerness to commit the act on behalf of Al Qaeda, and an undercover FBI agent joined the operation, posing as an Al Qaeda facilitator responsible for overseeing the plans.  Nafis told the undercover agent:

What I really mean, is that I don’t want something that’s like, small. I just want something big. Something very big. Very very very very big, that will shake the whole country, that will make America, not one step ahead, change of policy, and make one step ahead, for the Muslims… that will make us one step closer to run the whole world…

Via: Breitbart

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