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Credit agencies are a government endorsed racket

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Our Townhall colleague Stephen Moore has an interesting analysis of why we should end the credit rating agency racket. While I have some thoughts on a different aspect of this “industry” below, Moore is focused on the role that some of the major entities such as Moody’s and S&P played in the financial collapse of 2007 and 2008. The problem isn’t just the mismanagement of the ratings game and how that led to huge amounts of unsupported credit risk, but the fact that virtually nothing has changed since then and it could all happen again.

[I]t is worrisome that a decade later Washington is engaged in the same derelict behavior that caused the crisis. Government agencies are still issuing taxpayer guarantees on more than 90 percent of mortgages — many with less than 5 percent down payments. Yikes.

Worse, the biggest conspirators in the meltdown, the duopolistic credit rating agencies Moody’s and S&P, which gave sterling AAA grades on these bonds up nearly to the date they collapsed into financial rubble, are still dominating 80 percent of the credit rating market. Why are they even still in business?

Throughout 2007 and 2008, these agencies encouraged investors to snatch up hundreds of billions of dollars of mortgage-backed securities. They told investors these mortgages were “virtually risk-free” and stamped them with AAA ratings. Thanks to this incompetence, millions of Americans lost their life savings, and America suffered one of the greatest financial disasters in our history.

The author has plenty more at the link and it’s worth a read. We are no more protected from such a widescale collapse today than we were ten years ago. But today, I’d like to add on to what Moore is writing about and touch briefly on something that affects most of you on a more personal level.

What about your own personal credit rating? Do you know what it is? And even if you do, can you explain why you have the score that’s attached to your entire fiscal existence? Right off the bat you can consider the fact that the federal government recently concluded that two of the three major consumer credit reporting agencies were blatantly ripping people off and preventing you from seeing the same information that lenders access when evaluating you. Also, they didn’t bother trying to generate a score for most people of more modest means.

None of that is the main issue. Those are just examples of garden-variety greed and corruption. The bigger problem is the way they calculate your score even when the system is supposedly working as intended. Let’s take two hypothetical people here as an example. Mary is a diligent worker and saver who has never been late on the rent, pays all of her utilities on time and promptly meets her other obligations. She has a credit card, but any bills she runs up there are paid promptly at the end of the month. She’s been saving money since graduating college and already has more than 20K in the bank, plus her 401K.

Bob, on the other hand, is living far beyond his means and has been for a couple of years. He’s never been evicted but he has been late on several payments. He has a collection of multiple credit cards. Each one is essentially maxed out or close to it. Each time he reaches a limit, the credit card companies raise his limit a bit more. He makes the payments, but barely, juggling them back and forth. He has no savings.

Who do you think has the better credit rating? Surprise! It’s Bob, and he leads Mary by a mile. That’s because Mary has an established history of covering her obligations, but she hasn’t racked up a lot of debt allowing the credit card company to soak her for fat interest payments every month. Bob, on the other hand, sits on large piles of debt and sends a significant amount of his pay every month to the credit card companies, making the minimum payments.

Mary is clearly the more responsible party, but Bob is the horse those companies like to ride to maximize the amount of money they can get out of him. Thus, Bob has a better credit rating even though he is on the verge of total collapse any day now, just like our economy was in 2007.

Credit ratings are not in place to help you. Nor are they any sort of indicator of your level of fiscal responsibility (unless you’re the sort of person who actually is perpetually broke and misses payments all the time). Those credit rating companies exist to serve themselves and the banking industry. They aren’t looking to give anyone a leg up. They’re looking for suckers they can soak for the most interest possible.

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The robot dog that will murder you will also dance on your grave

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To cleanse the palate, obviously I don’t know if there’ll be “graves” as such after the robot apocalypse. I assume it’ll depend on their olfactory capabilities. If they’re not equipped to detect scent, maybe the ‘bots will just leave us where we lie to decay in the sun, our streets transformed into rivers of putrefied viscera from the sheer mass of leaking carcasses.

It’s my great privilege to share thoughts like that with you at the end of a long day.

I’m curious about what possessed Boston Dynamics to put this clip together. Could be nothing more than boredom or a creative way to show off Spot’s motor skills. But I wonder if all the freaky-deaky videos of humanoid robots demonstrating ever more impressive feats of mobility has created a strange sort of PR problem for them. They don’t want every promo they do to seem menacing, however inadvertently. Soon they’ll have people breaking into their factory, trying to stop them before they build the first T-800. Time to do something whimsical instead.

This thing is set to go on sale next year, by the way. Not to everyday consumers; the price tag will likely ensure that it remains a corporate plaything. But you’ll be seeing them around sooner than you think. Plus, some ultra-rich tech bros are destined to buy them and show them off as look-what-I-got novelties. We all know who the first one will be.

Weird but true: In a few decades’ time, this thing shaking its ass in your face as it does a victory twerk might be the last thing you ever see.

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WOW! Claire McCaskill Speaks Out After Project Veritas Reveals She’s a Complete Fraud — Lies and Blames Hawley (VIDEO)

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James O’Keefe strikes again!

On Monday evening, Project Veritas released an undercover video of endangered Missouri Democrat Senator Claire McCaskill admitting to being deceptive about her stance on firearms and immigration policies.

McCaskill is a red-state Democrat Senator so she has to appear pro 2nd Amendment to her constituents because Missourians love their guns.

Claire McCaskill’s staffers were also caught on video saying she puts on a moderate front to get the Republican votes.

The top staffer then continued saying McCaskill believes everything Obama does.

THIS WAS A DEVASTATING VIDEO! Claire McCaskill was COMPLETELY EXPOSED!

Senator McCaskill’s staffers admitted she is pro-DACA, pro-DREAMERS and against the border wall even though she runs ads to the contrary claiming she is strong on border security.
The Project Veritas Video has been viewed over 267,000 times so far!

On Tuesday morning Claire McCaskill responded to the stunning revelations.
McCaskill went on Ozarks First to try to dig herself out of this deep hole.


Claire lied some more, blamed Josh Hawley for the undercover video.

Senator McCaskill: I’ve been very up front about all my positions. I remember this person was trying to get me to say something different than what my positions are… It is startling that Josh Hawley would be part of fraudulently embedding something in my campaign.

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Coincidence or corruption? In Andrew Cuomo’s government it’s hard to tell

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Given the parade of people in the orbit of New York Governor Andrew Cuomo who have recently either been shipped off to jail or come under investigation, it’s amazing that none of the dirt ever sticks to Cuomo himself. How does he account for the various people who funneled money toward his campaign, and then were later discovered to have benefitted from state government “generosity” and wound up in handcuffs? It’s all just a coincidence.

Today we’re hearing news of yet another of these amazing coincidences. This story starts with a situation we first covered more than a year ago and it dealt with some donors who helped Cuomo out during his 2014 campaign. A medical corporation named Crystal Run Healthcare was run by a few people who had funneled more than $400K to Cuomo’s campaigns over the previous four years. When the “Buffalo Billion” was announced (a plan to invest a billion dollars of taxpayer money into projects creating jobs in the western, upstate region) Crytal Run was at the front of the line. They wound up receiving more than $25M dollars for two new medical centers.

But there were some fishy elements to the story. First of all, they had actually broken ground on both of those new projects six months before the grants were even announced or applications were being taken. It’s almost as if they knew they had the money coming from somewhere. Then we found out that the Crystal Run had coughed up a flurry of maximum donations only weeks before the checks to them were cut. In addition to that, there was a meeting held less than two weeks after the announcement of the grants where Crystal Run executives met with state officials, including a top aide from inside Cuomo’s office.

How did Cuomo explain it? It was all just a happy coincidence and the meeting didn’t matter because they didn’t even talk about the grants. The meeting was about Medicaid.

But now the local press has gotten hold of emails from Crystal Run showing that they did indeed discuss their two new developments and the grants, and that the state representatives at the meeting were “very receptive” to their requests. (NY Post)

Now, despite earlier denials from everyone involved, it turns out company execs got a private sitdown with top state officials in 2015, just 12 days after Albany started seeking applications for $1.2 billion in development grants. Crystal Run wound up with $25.4 million of that (the only for-profit company to qualify) for two projects.

Team Cuomo insists those projects never even got mentioned at the meeting, saying it was only about Medicaid. Yet the Albany Times Union reports that an e-mail sent two weeks later by Crystal Run’s chief legal officer stressed that company execs had “shared our vision for growth,” including the two “expansions,” with the health commissioner and a top aide who worked in Cuomo’s office.

Both officials, the e-mail noted, “were, obviously, supportive, as we are bringing real jobs to real people” — and had agreed that “further discussion was warranted” with the state economic-development agency “at the highest levels.”

How much more evidence do we need at this point? Cuomo’s spokespeople obviously lied about what went on at that meeting. They have records from the company who benefitted from it after making massive contributions. (Two of the people involved in organizing these meetings, donations, and windfalls have already been convicted or indicted on related charges.) And yet Andrew Cuomo continues to insist that all the grants were handled fairly and above board. These are all just amazing coincidences. And somehow, while his closest aides head off to the crowbar motel, Cuomo floats along and prosecutors can’t seem to lay a glove on him. On top of that, he’s on track to cruise to electoral victory for another four years in office.

I guess that’s just a happy coincidence too, eh?

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