Monday, April 21, 2008

Barack Obama's Strange Comment on the Credit Markets

The presidency doesn't come with training wheels, Mr. Obama...

Can Obama buy an election with the $41 million dollars he’s raised in March? Outspending Hillary Clinton 5 to 1 may not be enough to win the Democratic nomination as the layers of obfuscation begin to peel away from the Obama mystery. Obama has a great and sonorous voice but the facsimile of knowledge is not the same as the real knowledge required of a presidential candidate. Obama can no longer hide what he doesn’t know to begin with. One of the glaring Obama weaknesses became evident when, in a stump speech, he brought up the topic of the recent collapse in credit markets.

Obama was either dazed or outright lying as he told people that investment companies like Bear Stearns cheated people out of their homes by making loans they could not afford to pay back. Investment firms do not make home loans, Barack. What these investment firms do is “batch” mortgages into investment vehicles called “CDOs” or “collateralized debt obligations.” People then invest in the CDOs just as they do with stocks and bonds. It’s local banks and S&Ls who made the loans and they were encouraged to extend credit freely to potential home owners by free-spending politicians such as yourself.

Certainly, the greed factor comes into play, but if you’re going to criticize that then you must tell people specifically what you propose. Do you propose restoring down payments in the 15-20 percent range before loans can be made? Would you apply standard bank cash reserve rules on investment firms? The fact is that Barack Obama has no clue about how the U.S. economy works. However, the lack of knowledge will certainly not stop Obama from demagoguery on this issue or on any other issue.

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