In today’s edition: Iran’s coup becomes official, the U.S. ponders the good bank/bad bank solution, and the Rooskies are coming
As the President, I swear to Almighty God before the Holy Quran and the Iranian nation that I will protect the official religion and the Islamic Republic regime and the country’s constitution, and use all my talents and qualifications towards responsibilities I have undertaken, and dedicate myself to serving the people and promoting the country, promoting religion and morality, supporting truth and spreading justice, and will avoid any kind of obstinacy and defend the freedom and dignity of individuals and rights of the nation that the Constitution has recognized. I will refrain from any action to safeguard the borders and political, economic and cultural independence of the country, and with the help of God and by following the Islamic Prophet and the Imams like a devout and self-sacrificing trustee will protect the power that has been given to me by the nation as a sacred trust placed in me and pass it to the nation’s elected [leader] after me…
With those words spoken today, Mahmoud Ahmadinejad began his 2nd term as President of Iran. It appears all but certain that the old guard of that country has solidified its grip, has pulled off an obvious mass electoral fraud, killed its own citizens to further the cause, and has gotten away with it. Perhaps not scott free, but any sort of winning is winning, right? One last time now, the “actual” and “real” results…
|Official Iranian Election Results|
|Unofficial Iranian Election Results|
The next Iranian election for President is in 2013. Mr. Ahmadinejad is term limited and will not be allowed to run (probably). Still, I highly, highly doubt that any sort of openness of debate will be allowed anywhere near the level that was seen in Iran this year – and it will probably be limited in such a way for a long time.
The financial crisis and its after effects continue to haunt us. Fannie Mae & Freddie Mac, two companies that were quazi-private lenders of last resort to potential house buyers, were slammed by last fall’s meltdown. There appears to be an endgame on the table for both of those companies, and that would basically involve wiping their collective slates clean:
The Obama administration is considering an overhaul of Fannie Mae and Freddie Mac that would strip the mortgage finance giants of hundreds of billions of dollars in troubled loans and create a new structure to support the home-loan market, government officials said.
The bad debts the firms own would be placed in new government financial institutions — so-called bad banks — that would take responsibility for collecting as much of the outstanding balance as possible. What would be left would be two healthy financial companies with a clean slate.
The moves would represent one of the most dramatic reorderings of the badly shattered housing finance system since District-based Fannie Mae was created by Congress to support mortgage lending during the Great Depression. Both Fannie Mae and Freddie Mac, based in McLean, have government charters to buy home loans from banks, which they then repackage and sell to investors. The banks can then use the proceeds to offer more loans to home buyers.
While this does the job of making unhealthy companies healthy again, and attempts to collect whatever is left over of what can be paid on these properties, it does allow two companies to walk away from their own lending practices and their own mess, into the future to potentially do it all again. The bad guys get away and we get stuck with the bill. The downside to letting them fail, however, was seen in last fall’s stock market crash. The evaporation of Lehman Brothers helped to evaporate 20 – 30% off of the U.S. stock market – and that was just one financial company. It’s one of those situations where there are no pleasurable options, just bitter pills to swallow. Good job, capitalism.
Russia is flexing its muscle:
A senior Russian military official said Wednesday that Russian nuclear-powered attack submarines spotted off the U.S. East Coast were on a legitimate training mission.U.S. defense officials said Tuesday that two Russian submarines had been patrolling in international waters for several days. While the activity was reminiscent of the Cold War, the U.S. officials said the submarines had done nothing to provoke concern.
Gen. Anatoly Nogovitsyn, a deputy chief of the General Staff of the Russian military, said the patrols were part of efforts to give more training to the military forces.
For anyone who has forgotten the back story, last year the tiny nation of Georgia instigated a war against Russia with weapons sold to them by the United States. The Georgians were routed and sent packing by the overwhelming Russian forces and in a few days the conflict was over. The fact that Russians were being shot at with American weapons though, did not sit well with Moscow – causing a freezing in relations like nothing seen since the end of the Cold War. Such a thing isn’t going to be forgotten by the Russians as quickly as the West might forget that the conflict ever happened. If anything the exercises off the east coast of the U.S. are a “stay out of our backyard!” warning that, thanks to the current administration we have, will more than likely not turn into a dick waving war for the 2010s and beyond. Just let time heal these wounds.