Daily Read - 1/22/10

Krauthammer on the Massachusetts election (here) "The reason both wings of American liberalism -- congressional and mainstream media -- were so surprised at the force of anti-Democratic sentiment is that they'd spent Obama's first year either ignoring or disdaining the clear early signs of resistance: the tea-party movement of the spring and the town-hall meetings of the summer. With characteristic condescension, they contemptuously dismissed the protests as the mere excrescences of a redneck, retrograde, probably racist rabble."

WSJ's Peggy Noonan on political shifts: "In the 2006 and 2008 elections...you came to see the two major parties as the Nuts versus the Creeps. The Nuts were for high spending and taxing and the expansion of government no matter what. The Creeps were hypocrites who talked one thing and did another, who went along on the spending spree while lecturing on fiscal solvency." Voters thought Obama was not a nut based on his campaigning, but then realized he really was one...then Republican candidates in Virginia, New Jersey and Massachusetts "played the part of the Creep very badly!"

The U.S. continues subsidizing bad loans through Fannie Mae and Freddie Mac, but refuse to recognize "tens of billions of dollars" of losses as part of the federal deficit. (WSJ, here) Meanwhile, the President is off vilifying Wall Street.

While bank lending is constrained due to the government's delays in working on new regulations, "More than 40 U.S. homebuilders have teamed up with private equity firms to acquire and complete unfinished subdivisions as banks cut construction lending." "Banks slashed lending to homebuilders because regulators pressured them to reduce real estate assets as defaults on construction loans climbed, said Robert Seiwert, vice president of the American Bankers Association." (Bloomberg, here)

Equity manager Judah Kraushaar in the WSJ on the need for Congress to focus on financial reform, not squeeze it between their other priorities:

What we need now is clarity. What will future capital requirements look like? What is the plan to return the banks to reasonable rates of profitability? Until that architecture is put in place, banks will have little incentive to sell the problem assets currently clogging their balance sheets—let alone to lend more aggressively.

Protracted congressional hearings on the bank crisis, piecemeal new regulations, sporadic attacks on bank compensation, and an ad hoc approach to taxing banks will only compound the crisis in the American financial service industry.

Obama slams the Supreme Court decision to allow more political contributions from corporations, 1 1/2 years after breaking a pledge to seek public financing and became "the first major-party presidential nominee to reject the public funds, passing up nearly $85 million in taxpayer money and instead looking to the 1.5 million donors who contributed to his primary campaign". Any way the wind blows...

UFC heavyweight champion Brock Lesnar slams Canadian health care (here). Lesnar recently recovered from a severe digestive disease and said:

Probably the lowest moment was getting care from Canada."
"They couldn't do nothing for me," he noted in a later media conference call Wednesday. "It was like I was in a Third World country."