Every high school student who had taken the Business Law course knows the essentials for a legal insurance contract. One of the essentials of a valid insurance contract is that the party securing the insurance policy must have an "insurable interest" in the property to be insured. This is a most necessary essential as it determines whether or not the contract is within the perimeters of established law.
A person who purchases a home with a mortgage can secure a mortgage insurance policy to protect against financial loss of the property if the mortgage cannot be paid. A disconnected third party could not legally secure mortgage insurance on that property because this disconnected party does not have an insureable interest in the property. If the requirement for an insurable interest in property were to be "deregulated," this would allow a disconnected party to take out an insurance policy on the property which would be a "gamble," and in violation of established law. Consequently, this deregulation would be in violation of established law and therefore illegal.
If, on the other hand, there was a requirement that the insurance company had to keep a specified amount of money on hand to pay probable claims, and this requirement was "deregulated" to stimulate the economy, this deregulation could be called irresponsible.
Was the deregulation that caused the current credit crisis irresponsible, or like the Patriot Act, was it in violation of established law. This would be up to the Attorney General's Office to decide.
Public officials, like Corporate CEO's, have "limited personal liability" and cannot be prosecuted for poor judgment. However, this limited personal liabiltiy, does not include violation of established law. This too would be the responsibility of the Attorney General's Office to pursue and render justice.
Tuesday, October 28, 2008
Thursday, October 23, 2008
WHERE DID THE CHICKENS GO?
Refer to the Associated Press Report by Pete Yost (Page 1 & 4 of The Daily Gazette, October 20, 2008)
Pre 2004 Freddie Mac and Fannie Mae were Democratic Strongholds
After 2004 Republicans ran the Political Operations of FM and FM
2004- Hollis McLoughlin, former Asst. Sec of Treas., became Chief of Staff of Freddie Mac.
2005- Government Auditors exposed massive accounting issues at Freddie Mac
2005- Senator Hagel (R-Neb) sponsored a bill to regulate the FMs liberal credit policies and accounting issues.
2005- McLaughlin responded by secretely hiring DCI (Senior Partner Doug Goodyear, political "consultant" from Arizona). 17 States were targeted for political "counselling."
2005- 25 Republican Senators requested Senate Majority Leader, Bill Frist (R-Tenn) to bring the bill to the Senate floor for a vote.
2005- 9 of the targeted Senators, plus 20 Republican Senators and all of the Democratic Senators withdrew support for the bill.
2005 - Senate Majority Leader, Bill Frist (R-Tenn) refused to allow the Nagel Bill
on the Senate Floor for Vote.
2008 - Freddie Mac and Fannie Mae went bankrupt and started the "Credit Crisis."
2008- The Government asked for, and Congress agreed to give 700 billion to the FMs and other bankrupt corporations. Government claims that
hard working Americans trying to achieve the American Dream of home ownership failed to meet their mortgage payments on a deceptive mortgage and caused the world credit crisis. (Nothing has been said about the massive accounting issues exposed in Freddie Mac in 2005)
Let's look at this in simple terms. In 2005 inspectors (government auditors) exposed massive accounting issues (massive numbers of chickens missing) in Freddie Mac's books. (in the chicken coop). Police Officer (Hagel) wrote a report suggesting that a Fox had gotten into the chicken coop and that a lock should be put on the Coop. Fox of Interest (McLoughlin) secretly hired Attorney Slippery (Goodyear) to "counsel" the Chief of Police (Frist) to tear up the Police Officer's (Hagel's) report, which he did. In 2008 Fox of Interest (McLoughlin)
found that he didn't have any eggs to give to the people that paid for them.
The Mayor and the City Treasurer (Sec of Treas and Administration) got together to figure out what to do. First they had to find someone to blame and it was decided that the crisis was caused by the poor people who didn't pay for their eggs (the mortgagees that could not cope with the balloon interest payments) They then decided to give massive numbers of chickens to the Fox of Interest (McLaughlin) and the other Corporate CEO's.
Does this really solve the problem? What happened to all those chickens? Shouldn't we catch the fox first and put a secure lock on the coop (Regulations)
before just putting a lot more chickens in the Coop?
Pre 2004 Freddie Mac and Fannie Mae were Democratic Strongholds
After 2004 Republicans ran the Political Operations of FM and FM
2004- Hollis McLoughlin, former Asst. Sec of Treas., became Chief of Staff of Freddie Mac.
2005- Government Auditors exposed massive accounting issues at Freddie Mac
2005- Senator Hagel (R-Neb) sponsored a bill to regulate the FMs liberal credit policies and accounting issues.
2005- McLaughlin responded by secretely hiring DCI (Senior Partner Doug Goodyear, political "consultant" from Arizona). 17 States were targeted for political "counselling."
2005- 25 Republican Senators requested Senate Majority Leader, Bill Frist (R-Tenn) to bring the bill to the Senate floor for a vote.
2005- 9 of the targeted Senators, plus 20 Republican Senators and all of the Democratic Senators withdrew support for the bill.
2005 - Senate Majority Leader, Bill Frist (R-Tenn) refused to allow the Nagel Bill
on the Senate Floor for Vote.
2008 - Freddie Mac and Fannie Mae went bankrupt and started the "Credit Crisis."
2008- The Government asked for, and Congress agreed to give 700 billion to the FMs and other bankrupt corporations. Government claims that
hard working Americans trying to achieve the American Dream of home ownership failed to meet their mortgage payments on a deceptive mortgage and caused the world credit crisis. (Nothing has been said about the massive accounting issues exposed in Freddie Mac in 2005)
Let's look at this in simple terms. In 2005 inspectors (government auditors) exposed massive accounting issues (massive numbers of chickens missing) in Freddie Mac's books. (in the chicken coop). Police Officer (Hagel) wrote a report suggesting that a Fox had gotten into the chicken coop and that a lock should be put on the Coop. Fox of Interest (McLoughlin) secretly hired Attorney Slippery (Goodyear) to "counsel" the Chief of Police (Frist) to tear up the Police Officer's (Hagel's) report, which he did. In 2008 Fox of Interest (McLoughlin)
found that he didn't have any eggs to give to the people that paid for them.
The Mayor and the City Treasurer (Sec of Treas and Administration) got together to figure out what to do. First they had to find someone to blame and it was decided that the crisis was caused by the poor people who didn't pay for their eggs (the mortgagees that could not cope with the balloon interest payments) They then decided to give massive numbers of chickens to the Fox of Interest (McLaughlin) and the other Corporate CEO's.
Does this really solve the problem? What happened to all those chickens? Shouldn't we catch the fox first and put a secure lock on the coop (Regulations)
before just putting a lot more chickens in the Coop?
Friday, October 17, 2008
AN ALTERNATIVE TO THE WALL STREET BAILOUT!
The abuses by corporations such as AIGs $450,000 junket to Hawaii for executive officers plus a pheasant hunt in England with taxpayer's bailout contributions, gives thought that an alterative to the Secretary of the Treasurer's hand out of vast sums to CEOs to meet their "needs," might be in order.
Since the corporation's failure was the result of the CEOs use of policies and decisions that failed, giving more funds to the same CEOs using the same policies sounds indefensible. Perhaps the government should send in a "Business Team" to freeze operations, cancel all unnecessary operations, change the policies that caused the failure, and start up operations again using the new policies. (We could call this Chapter 11.5) If only 50% or 60%
of funds are available to pay necessary operating costs; pay those costs with the funds available, and issue "Emergency Fund Claims" for the remainder. These claims could then be redeemed from the "Emergency Bailout Funds" held by the government and charged against the account of the Corporation that issued the claims. When the Corporation recovers to the point of paying 100% of operating costs, debts (including the account to the taxpayers) should be paid by the corporation. When all debts are paid, the government business team leaves and the corporation resumes operations under regulations that will have been established by the government to prevent future failures of this nature.
The second part of this alternative plan addresses those that have foreclosed mortgages. Give each mortgagee that was duped into "balloon mortgages without adequate equity" the option to renegotiate the mortgage at the initial rate. Mortgagee to pay legitament amount owed with available funds plus an "Emergency Fund Claim" that can be redeemed from the "Emergency Bailout Funds" held by the government and charged against the mortgagee issuing the claim. The mortgagee remains in the dwelling with an arrangement to repay the fund claim (plus the same low interest charged to banks) over the term of the renegotiated mortgage. Regulations should be enacted to require proper equity for the issuing of future home mortgages.
DO WE NEED AN ALTERNATIVE PLAN OR IS A WALL STREET HAND OUT ACCEPTABLE?
Since the corporation's failure was the result of the CEOs use of policies and decisions that failed, giving more funds to the same CEOs using the same policies sounds indefensible. Perhaps the government should send in a "Business Team" to freeze operations, cancel all unnecessary operations, change the policies that caused the failure, and start up operations again using the new policies. (We could call this Chapter 11.5) If only 50% or 60%
of funds are available to pay necessary operating costs; pay those costs with the funds available, and issue "Emergency Fund Claims" for the remainder. These claims could then be redeemed from the "Emergency Bailout Funds" held by the government and charged against the account of the Corporation that issued the claims. When the Corporation recovers to the point of paying 100% of operating costs, debts (including the account to the taxpayers) should be paid by the corporation. When all debts are paid, the government business team leaves and the corporation resumes operations under regulations that will have been established by the government to prevent future failures of this nature.
The second part of this alternative plan addresses those that have foreclosed mortgages. Give each mortgagee that was duped into "balloon mortgages without adequate equity" the option to renegotiate the mortgage at the initial rate. Mortgagee to pay legitament amount owed with available funds plus an "Emergency Fund Claim" that can be redeemed from the "Emergency Bailout Funds" held by the government and charged against the mortgagee issuing the claim. The mortgagee remains in the dwelling with an arrangement to repay the fund claim (plus the same low interest charged to banks) over the term of the renegotiated mortgage. Regulations should be enacted to require proper equity for the issuing of future home mortgages.
DO WE NEED AN ALTERNATIVE PLAN OR IS A WALL STREET HAND OUT ACCEPTABLE?
Monday, October 13, 2008
Give Control to the Owners!
Representatives, both for the Taxpayers and for the Shareholders, are acting in their own self interests rather than for the interests of those they represent.
What can be done to correct this injustice?
Starting with the Taxpayers:
1) Limit terms of Public Office to Maximum 3 terms.
Too many public officials using public office as their personal career rather than an obligation to serve the public.
2) Institute Recall Procedure for all Public Officers.
If public official is not acting in the best interests of the electorate, there should be provision to remove that official from office.
3) Keep exorbitent salaries to attract "good" people, but eliminate retirement benefits and after term perks.
Current retirement benefits and perks outrageously out of line encouraging public officals to seek public office for their personal welfare rather than the desire to serve their country. However, competent, successful citizens should be compensated for personal financial sacrifice to serve their country.
4) Increased remuneration subject to vote of the taxpayers.
Government officials have given themselves outrageous salaries, perks and retirement benefits without any concent from the taxpayers.
For Shareholders:
1) ALL profits of the business given to shareholders as dividends after prudent funds kept in Surplus for contingencies.
Too many CEO's using business profits as extra personal reward without concent of owners.
2) Any expansion of the business to be made through sale of stock shares after vote of shareholders, with first option for purchase given to stockholders.
Too many CEO's taking risks with profits of owners to reinvest these profits without any consideration for the rights of the owners.
3) Remuneration of Corporate Officers and Directors subject to vote of stockholders.
Corporate Officers, like elected government officials, are in a position to dictate their own remuneration regardless of the condition of the business or concent of the owners.
4) Gifts to support Political Parties and Charities NOT to be given by Corporate Officers or Directors. Profits belong to shareholders to use as THEY see fit.
Current CEO's use owners profits to support their choices of political candidates and charities without any consideration for the wishes or desires of the owners.
WHAT ARE YOUR THOUGHTS ON THIS?
What can be done to correct this injustice?
Starting with the Taxpayers:
1) Limit terms of Public Office to Maximum 3 terms.
Too many public officials using public office as their personal career rather than an obligation to serve the public.
2) Institute Recall Procedure for all Public Officers.
If public official is not acting in the best interests of the electorate, there should be provision to remove that official from office.
3) Keep exorbitent salaries to attract "good" people, but eliminate retirement benefits and after term perks.
Current retirement benefits and perks outrageously out of line encouraging public officals to seek public office for their personal welfare rather than the desire to serve their country. However, competent, successful citizens should be compensated for personal financial sacrifice to serve their country.
4) Increased remuneration subject to vote of the taxpayers.
Government officials have given themselves outrageous salaries, perks and retirement benefits without any concent from the taxpayers.
For Shareholders:
1) ALL profits of the business given to shareholders as dividends after prudent funds kept in Surplus for contingencies.
Too many CEO's using business profits as extra personal reward without concent of owners.
2) Any expansion of the business to be made through sale of stock shares after vote of shareholders, with first option for purchase given to stockholders.
Too many CEO's taking risks with profits of owners to reinvest these profits without any consideration for the rights of the owners.
3) Remuneration of Corporate Officers and Directors subject to vote of stockholders.
Corporate Officers, like elected government officials, are in a position to dictate their own remuneration regardless of the condition of the business or concent of the owners.
4) Gifts to support Political Parties and Charities NOT to be given by Corporate Officers or Directors. Profits belong to shareholders to use as THEY see fit.
Current CEO's use owners profits to support their choices of political candidates and charities without any consideration for the wishes or desires of the owners.
WHAT ARE YOUR THOUGHTS ON THIS?
CAST YOUR VOTE!
If one can look beyond the political nonsense, both candidates have clearly presented their intentions if elected President!
Obama would cancel the "Bush" tax decuctions for the high income taxpayers giving added income to the government, while McCain would continue to offer these deductions with the hope that this would stimulate economic growth.
McCain would continue to keep troops in Iraq for an indefininte duration while Obama would bring the troops home on a definite time schedule, reducing government spending.
OBama would give a larger tax deduction for the Middle Class making under $250,000 which would reduce government income.
McCain would put a spending freeze on all government spending except cost of occupation forces in Iraq and other military related spending as well as entitlements. Obama would cut waste spending and cost of occupation forces in Iraq. (Including troops and civilian forces)
Obama would establish universal health program while McCain would give tax credits to help taxpayers with private health programs.
Both Obama and McCain would mandate regulations on Financial Institutions. (Traditionally the Democrats would impose greatest restrictions. More restrictions promote greater protection against failures while less restrictions promote greater growth.)
Both candidates personally not for abortion. Neither openly for changing present laws on abortion.
The Presidency is not a reward for past service, it is a responsibility for future service.
ADD UP YOUR PROS AND CONS AND CAST YOUR VOTE!
Obama would cancel the "Bush" tax decuctions for the high income taxpayers giving added income to the government, while McCain would continue to offer these deductions with the hope that this would stimulate economic growth.
McCain would continue to keep troops in Iraq for an indefininte duration while Obama would bring the troops home on a definite time schedule, reducing government spending.
OBama would give a larger tax deduction for the Middle Class making under $250,000 which would reduce government income.
McCain would put a spending freeze on all government spending except cost of occupation forces in Iraq and other military related spending as well as entitlements. Obama would cut waste spending and cost of occupation forces in Iraq. (Including troops and civilian forces)
Obama would establish universal health program while McCain would give tax credits to help taxpayers with private health programs.
Both Obama and McCain would mandate regulations on Financial Institutions. (Traditionally the Democrats would impose greatest restrictions. More restrictions promote greater protection against failures while less restrictions promote greater growth.)
Both candidates personally not for abortion. Neither openly for changing present laws on abortion.
The Presidency is not a reward for past service, it is a responsibility for future service.
ADD UP YOUR PROS AND CONS AND CAST YOUR VOTE!
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