john maddente | midwestern clarity

H edge fund executive Oscar Schafer in a Barron's interview (January 12, 2009, "Hang on Tight!") described our current economic condition thus: " The world is experiencing a giant margin call ." Yes, a giant margin call enabled by easy credit extended to millions of people who couldn't afford as much home as they purchased, or cashed out equity to finance a lifestyle they couldn't afford, before defaulting on their mortgages which equated to securitized time bombs that were gobbled up by over-leveraged financial institutions.  How did it all happen?  It began with policy makers in Washington who wanted to guarantee home ownership for anyone with a pulse. The Fed left open the spigot of cheap money by keeping rates too low for too long and America became intoxicated by illusory home price appreciation. This party was joined by money center moguls trying to juice returns by making big bets upon this whole sorry misuse of credit, until the house...

I felt sorry for him as he approached the lectern with a sheepish smile. A s Kissinger reminded Nixon, history will treat him better than his contemporaries. His policies precluded another attack since 9/11. To conclude otherwise is to posit that the other side simply stopped trying to harm us after 9/11.  The President deserves credit and at least grudging acknowledgement from his political opponents -- for stalwart efforts to fight terrorism and protect Americans.   I'm reminded of another parallel with Nixon. Richard Nixon asked readers this question in one of his later books: if America does not lead in this world -- who will? I repeated the question in one of my columns and a rebuttal came from a letter writer who declared that the correct answer to this question is -- the "leaders"  of other countries .  Unfortunately, the world has always been replete with 'leaders' like Stalin, Hitler and Hussein that refuse to back down.   This Presid...

Regarding point #2 from my previous post concerning Al Franken, I'd like to thank my nephew who alerted me to an outstanding  political cartoon (from  Michael Ramirez  a two-time American Pulitzer Prize-winning editorial cartoonist.).   Even if I could draw, I couldn't improve on the way Mr. Ramirez makes his point in IBD.