AL AND HIL;THE MIL BY SPIRITED DONA

New President's To-Do List....We Need....

Jimmy Smith — Sat, 18 Oct 2008 10:56:30 EDT

First, restore confidence Forget four years. In the first six weeks of his tenure, the new president's to-do list will include: Restoring a sense of public confidence that the country can meet and solve the financial challenges ahead. At campaign rallies, Obama already has quoted FDR's admonition that "the only thing we have to fear is fear itself." Guiding implementation of the financial industry rescue plan, including figuring out which toxic assets Treasury should buy from struggling institutions and how much to pay for them. The move to use $250 billion of the bailout to buy stakes in banks will put the government in the unfamiliar role of part owner of institutions that embody free-market capitalism. Beginning to revamp a regulatory structure largely built during the Depression so that it reflects the complexity of the current global financial system. Deciding whether and how to begin the drawdown of most U.S. combat forces from Iraq. Obama says he wants to complete the withdrawal in his first 16 months in office. McCain says a reduction is on the horizon but hasn't set a timetable. Responding to the urgent request this month by Gen. David McKiernan, the top commander in Afghanistan, for more U.S. troops there. Army Times reports that Gen. David Petraeus, who takes overall command of the region on Oct. 31, plans to deliver a report to the president in February after conducting a "top-to-bottom" review. Submitting the federal budget for fiscal 2010 to Congress in early February. It presumably will reflect the costs of the bailout plan and the revenue impact of the economic slowdown. Being prepared for terrorists to strike during the transition, a timing they have used before. The World Trade Center was bombed five weeks after President Clinton took office in 1993; the Madrid train bombings took place three days before national elections in Spain in 2004; car-bomb attacks were attempted in London and Glasgow days after a new British prime minister took office in 2007.

New Orleans Hurricane

Frank Lynch — Tue, 02 Sep 2008 11:15:44 EDT

Yesterday, watching those poor people lining up for buses to yet again flee a hurricane, my heart broke.

With all our riches how can there still be people in America who are so obviously so impoverished and helpless?

Unfortunately, it is because our system of education is broken, failed, shameful.

How can any politician believe that property taxes from impoverished areas can pay for world class schools and world class teachers?

A factor in our broken system of education is that first, teachers are underpaid so that schools for teachers "sometimes" fail to attract the most talented people.

Second, the curricula are not teaching prospective teachers how to really teach.

I want every teacher in America to receive the same starting pay as computer programmers and engineeers.

I want better curicula for preparing teachers.

And I want 3,000,000 more, high paid, talented, dedicated teachers who are fully prepared to teach THE LOVE OF medicine, bioscience, math and engineering, starting in the first grade.

Let us all work for an America where everey child has absolutely equal and excellent education, so that in the future no American is so unprepared for life that they end up helplessly standing in line for buses to flee for their lives.

Please donate, tax deductible, to these goals at http://www.fluni.com

I cannot think of anything more consistent with the core values of our Democratic Party.

Respect Obama and our countries VP candidate

justsaynotohypocrites — Mon, 01 Sep 2008 17:01:33 EDT

STATEMENT FROM SARAH AND TODD PALIN

For Immediate Release

Contact: Press Office

Monday, September 1, 2008

ARLINGTON, VA -- Today, Sarah and Todd Palin issued the following statement regarding today's Reuters story:

"We have been blessed with five wonderful children who we love with all our heart and mean everything to us. Our beautiful daughter Bristol came to us with news that as parents we knew would make her grow up faster than we had ever planned. We're proud of Bristol's decision to have her baby and even prouder to become grandparents. As Bristol faces the responsibilities of adulthood, she knows she has our unconditional love and support.

"Bristol and the young man she will marry are going to realize very quickly the difficulties of raising a child, which is why they will have the love and support of our entire family. We ask the media to respect our daughter and Levi's privacy as has always been the tradition of children of candidates."

oops HS... did it again

justsaynotohypocrites — Mon, 01 Sep 2008 16:59:11 EDT

McCain, Obama agree: Don't use Palin's pregnant daughter as political fodder

http://www.suntimes.com/news/elections/rnc/1138831,CST-NWS-react01web.article

Maybe Obama should visit PB

justsaynotohypocrites — Mon, 01 Sep 2008 16:52:56 EDT

Obamas words:

"There is no evidence at all that any of this involved us. I'm hope I'm as clear as I can be. In case I'm not, let me repeat: We don't go after people's families. We don't get them involved in politics. It's not appropriate and it's not relevant. Our people were not involved in any way in this and they will not be. If I ever thought that it was somebody in my campaign who's involved in something like that, they'd be fired."

One more comment in Barack Obamas own words

justsaynotohypocrites — Mon, 01 Sep 2008 16:34:03 EDT

"I have said before and I will repeat again, I think people's families are off limits," Obama declared after attending a Labor Day picnic here. "People's children are especially off limits. This shouldn't be part of our politics. It has no relevance to Gov. Palin's performance as a governor or her potential performance as a vice president. So I would strongly urge people to back off these kinds of stories."

He continued, "You know, my mother had me when she was 18. How family deals with issues and teenage children, that shouldn't be the topic of our politics. I hope that anybody who's supported me understands that's off limits."

I am banning myself - what a bunch of idiots - you should all be ashamed.

justsaynotohypocrites — Mon, 01 Sep 2008 13:48:43 EDT

HERE ARE SOME OF THE COMMENTS I HAVE JUST READ BY THE BRILLIANT MINDS ON PB. A NEW LOW. THIS SITE IS NOT WORTH READING ANYMORE. WHAT A GREAT RESULT TO YOUR CENSORSHIP AND BANNING. I HOPE "NEW" DEMOCRATS THAT YOU ALL ARE REQRUITING DO NOT VISIT THIS SITE - IT WOULD MAKE ANYONE CRINGE.

We learned that Sarah Falin has a 4 months baby with down syndrome. Would you hire Sarah Falin as an ER/Internsive care doctor of a large hospital? You would be faced with the choice of releasing her to go take care of her son leaving over 50 critically ill patients with no help.

They are saying they think her 4 month old is the daughter's as well. Palin did not announce her pregnancy to her staff until she was 7 months along. Then the next month she "prematurely" gave birth.

With a mother who wants to give so little attention to a poor sick child, how could we not have expected this. The young girl would be on her own raising herself form early. If Palin is going to drop off babies for the daughter to raise while she chases her dreams, why not have one for herself...?

I am trashing Palin here if anyone because as mother who has had to deal with this issue and a plethora of others, I find it hard to believe she is showing good judgment by accepting this nomination when your teenage daughter is going to need you now more than ever. Moreover, she has a four month with down syndrome.

I am also concerned about Palin's older children and her husband.
No one has mentioned it that I know of, but what hit me really hard was that through-out Palin's acceptance speech, while her family stood by watching, it was the oldest daughter that held the 4 month old THE WHOLE TIME.
I believe that the oldest daughter is the one who most of the responsibility has fallen on for raising the younger children.'
Dad is to much of a man's man and has stated that he isn't going to be the "house mom" (para)

The Palin's are also uneducated and don't know how to use birth control. If they are against condoms, then just using "self control" is not something that they are capable of either.

On the front burner of feminism, has been "taking responsibility" for our bodies and how to stop bringing unwanted, or untimely children into the world that we cannot or don't want to REALLY care for.

This was/is an inconvenient child

A brilliant trap...an interesting article from NYC newspapers

justsaynotohypocrites — Mon, 01 Sep 2008 10:44:18 EDT

Is she a gamble? Definitely. But so is Barack Obama, who has himself dismissed experience as a prerequisite for leadership, despite his spot atop the Democratic ticket.

At this point, Palin is so unknown, there's no way to make a clear judgment about her. But listening to Obama supporters take to the airwaves to shriek with indignation about her lack of experience is just a little too rich. Where were they when Obama, two years into the Senate, announced his candidacy for president?

One Obama supporter and political operative blogged, "In picking an unknown, untested half-a-term governor from Alaska . . . John McCain is following in a long line of reckless men who have rolled the dice for a beauty queen."

Do we really have to do this again?

No sooner was Hillary Rodham Clinton out of the race, and a new woman is in the cross hairs.

link in comments

Michelle's First Date

Frank Lynch — Fri, 29 Aug 2008 10:57:41 EDT

This vignette touched my heart, because it has such relevant symbolism.

In the clips last night, Michelle Obama spoke of finally giving in to Barack's request for a date. She had been refusing his advances because she was very proper in the top law firm of Sidley & Austin, where she was a full fledged attorney and Barack was just a summer intern. Barack surprised Michelle when he took her, not to a fancy restaurant, but to a church basement where he gave a speech to steelworkers who were laid off when the local steel mill closed.

Michelle said Barack riveted everyone in the basement with a magnificent speech about how America actually was, and how America should be.

The clip showed a picture of the burly white steelworkers raptly listening to the young African American orator, demonstrating that the races were cooperating even back then.

I grew up in the same neighborhood as Michelle Robinson Obama, actually in between her house and Rev. Wright's church. I personally knew many of the steelworkers who forever lost high paying jobs to the slave labor wages of Indian and Chinese steelmills, and feel quite strongly about fair trade instead of free trade.

Those hard working men never, ever got jobs with pay remotely near what they earned in the mill, for very hard work.

Micehlle felt the same thing I did, and said that speech in the church basement made it all over, the end! She was in love with Barack.

A symbolic lesson for us all, united.

Proud To Be A Democrat

Frank Lynch — Fri, 29 Aug 2008 05:03:44 EDT

While I shall continue to post about how to improve our
Democtratic party and uplift the issues of our candidates, my heart burst with pride as I watched our great Democratic Party make history as the first major party to nominate an African American for President of the United States of America.

On the Fourth of July, 2007, I signed the papers to register as a Democrat and abandoned my life long membership in the Republican Party. What a great day!

May God Bless America, and God Bless our Democratic Party!

I Was Going To Join Jewish Democrats on PB When

SPIRITED DONA — Wed, 20 Aug 2008 19:22:41 EDT

I could not find the link. If you are in it, let me know! Thank you!

Mikheil Saakashivili-- Our friend who Should Be With Nato Officials in Tbillisi

SPIRITED DONA — Mon, 18 Aug 2008 18:47:54 EDT

Mikheil Saakashivili

Spirited Dona believes NATO and or UN officials should be standing strong with Mikheil, in the actual Tbillisi capital, or prepare to send him humanitarian packages. I saw police cars run over and tossed for fun aggression on television by the Russians in Georga, just what I expected, as Condoleeza came and left She was right to go, just not leave him, alone. I just saw a lady in a food line. The Russians killed her brother, her only relative. She asked "why" and "what" am I to live for now! Wars I and II started exactly like this. Now, I behold the hesitation, that honor requires of the world to take action, with mine own eyes. President Mikheil was born under Russian rule. Will he die under Russian rule?

Wake Me UP! George Bush

SPIRITED DONA — Sat, 09 Aug 2008 20:53:28 EDT

George Bush looks like he's on the Ed Sullivan show.

Celebrity Democrat; Edtion 3, Christie Brinkley, All American!

SPIRITED DONA — Sat, 09 Aug 2008 19:59:10 EDT

Just like my career, poster girl, great Democrat, and all around great American girl! Christie Brinkley! For those of you naysayers, I might be a poster girl, if fellow blogger, young Dine, has his dad take a poll in Iraq, that the troops need a poster girl, with a slight less snazz than Christie. We don't want to over occupy the thoughts of our troops!

The Stats

Christie has been to Democratic fundraisers, hosted them, too!

Is the mother of a music prodigy, Alexa Ray Joel, and horse lovers, son Jack, and daughter, Sailor!

A softie who won the Tough Cookie Award this year!

I think she is my latest girl crush!

American, Bantam Weight Gary Russell, Jr KO"D at China Olympics

SPIRITED DONA — Sat, 09 Aug 2008 10:31:05 EDT

AMERICANS SEEM TO BE DROPPING LIKE FLIES IN CHINA! HE IS OKAY, PRIOR TO BEING FOUND UNCONSCIOUS AND DEHYDRATED, TRYING TO MAINTAIN BANTAM WEIGHT IN CHINA! HOW DISAPPOINTED I AM FOR HIM! THE SECURITY HAS GOT TO BE BAD IN CHINA. BUSH SHOULD BE SCARED. DON'T MAKE ME PAY A RAMSOM FOR THAT MAN MAKING IT LOOK LIKE I WANT HIM. LOL!

Find Out What happened To Jacob Clark

SPIRITED DONA — Sat, 09 Aug 2008 09:36:11 EDT

pb member and obama supporter, Jake, had surgery for blood clots, Friday. when you find out how he is, somebody, let us know. Thank you!

Celebrity Democrat; Edition 2, Morgan Freeman is Free Again!

SPIRITED DONA — Sat, 09 Aug 2008 09:21:15 EDT

The misfortune of human being, ( the celebrity oriented always say actor), Morgan freeman was my first edition. This is the followup. Morgan has left the hospital. He is free and out amongst us again!

The bad stats

Morgan broke his arm with elbow and had surgery for nerve endings

The spotlight chooses Morgan, not the other way around. Due to the interest in his life, Morgan has said he has been seperated from hiis wife a very long spell, and, yes, it is ending in divorce. Even the wiseest of us have problems.

The Good stats

He was in the successful picture, "Dark Knight". Although, like a lot of you I go long periods without seeing Morgan, photos show him very involved.

He owns a restaurant in Clarksdale, Mississippi and Memphis called "Ground Zero. a Blues club with southern cuisine!

He divides his time between his native Tennessee, his native Mississippi, and his adopted New York.

God bless, Mr. Morgan Freeman! A man who believes everyone is a regular American. Although, he is not officially involved in the campaign, he will vote our presumptive nominee, Sen Barack Obama.

Jacob Clark, Good Person, Barack Obama Supporter

SPIRITED DONA — Thu, 07 Aug 2008 21:49:08 EDT

Short but sweet.
Prayer. Jacob. clot surgery, Friday!

Clinton’s supporters petition to have her name on the ballot at the National Convention

Bob — Thu, 07 Aug 2008 11:28:37 EDT

Sen. Hillary Rodham Clinton says her defeating Barack Obama at a contested Democratic National Convention “is not going to happen” but she is looking for a way for her delegates to vent before getting behind the future nominee ahead of the November election.

Clinton, who battled Obama for 18 months but came up shy of the delegate votes needed to capture the nomination, told a mostly female group of backers at a California fundraiser last week that she wants unity in the party, but she is asked every day whether she will put her name on the ballot.

Clinton said that her delegates want to have a role and feel that their “legitimacy is validated,” before the group moves forward to back Obama.

“I happen to believe that we will come out stronger if people feel that their voices were heard and their views respected. I think that is a very big part of how we actually come out unified,” Clinton, D-N.Y., said to applause.

“Because I know from just what I’m hearing, that there’s incredible pent-up desire. And I think that people want to feel like, ‘OK, it’s a catharsis, we’re here, we did it, and then everybody get behind Senator Obama.’ That is what most people believe is the best way to go,” she said.

“Doesn’t work that way,” shouted one supporter. The video clip of her remarks was posted on YouTube accompanied by the one-word remark, PUMA, an acronym for a group of Clinton supporters who have not committed to Obama. PUMA stands for “Party Unity My Aâ€".”

Click here to see the YouTube video of Clinton.

In the video, Clinton, who endorsed Obama on June 7 after the final Democratic primary, said that she is fully behind Obama and actually has offered more help to him than other candidates have done for other nominees in previous years.

“I think it’s fair to say if you look at recent history, I have moved more quickly and done more on behalf of my opponent than comparable candidates have. And most of them didn’t endorse until the convention,” she said, naming Massachusetts Sen. Ted Kennedy, former California Gov. Jerry Brown and former Colorado Sen. Gary Hart, all past presidential candidates who lost the party nomination.

Obama spokesman Bill Burton nothing has been decided in terms of the role of Clinton’s delegates. He said Democrats remain united, despite the hard-fought battle between Clinton and Obama.

The Democratic convention is being held in Denver on Aug. 25-28, with the first three nights’ activities taking place at the 21,000-seat Pepsi Center. Obama is expected to accept the nomination at Invesco Field at Mile High, a 75,000-seat stadium where the Denver Broncos play. Convention planners said the venue would demonstrate the massive support Obama commands.

“You don’t have to be a delegate or party insider to witness this historic moment firsthand,” Democratic National Convention Committee CEO Leah Daughtry said, announcing the plans for credentials.

Ticket selection was designed “to showcase the gains the party has made in the West,” she said. Nearly two-thirds of the tickets will go to residents of the West and Southwest, including Colorado, where Democrats have made inroads in recent elections.

But several of Clinton’s supporters are insistent that the former first lady get a vote on the convention floor. One self-identified delegate at the California fundraiser said a petition had been formed to put Clinton’s name on the ballot.

Clinton did not oppose that idea, but said it won’t change the outcome.

“I have made it very clear that I am supporting Senator Obama and we’re working cooperatively on a lot of different matters, but I think that delegates can decide to do this on their own. They don’t need permission. They can decide under the rules of the DNC, and so I think it would be better if we had a plan that actually we put in place and everybody knew what it was and then we executed it because I just think that would go more smoothly,” she said.

Former Clinton campaign manager and Howard Wolfson also obliquely acknowledged Thursday that relations between Clinton’s and Obama’s delegates aren’t all roses and sunshine.

“You know the these two people ran against each other for 18 months there were some moments of … friction as you might imagine,” he said, stressing that Clinton is doing her part to contribute to Obama’s election.

“If you have some people that are concerned that they are not getting the respect that they are looking for, that the party not quite yet unified, what is the way to bring those people back into the party to make sure that they are enthusiastically supporting Senator Obama by the time the November election comes around? And one possible way of doing that is to have roll call that has Senator Clinton’s name placed in nomination, that is one option. There are other options and I think that the important thing is that this is going to get decided between Senator Clinton and Senator Obama in a way that I think both can agree unifies the party and bring people together,” he said.

Democratic strategist Bob Beckel added that a vote for Clinton would help relieve some of the tension between the Obama and Clinton delegates.

“They can’t stop them if they want to do it. They cast their vote for Hillary Clinton and before the final roll call is finished they are going to go back through and make it unanimous by state. That’s one way I think to let a little bit of the pressure out of this pressure cooker, but it’s there. I mean it’s bound to be. You can’t have a convention with 1,800 delegates out of 4,400 be for somebody else and not expect there is still going to be some latent animosity,” Beckel said.

Clinton is expected to deliver a prime-time address to delegates on Aug. 26, the second night of the gathering. Typically the vice presidential nominee delivers the address on the third night of the convention.

Freddie Mac and Fannie Mae Update

Bob — Tue, 05 Aug 2008 13:56:52 EDT

As the one-year anniversary of the housing and credit crunch approaches, investors in Fannie Mae and Freddie Mac have nothing to celebrate. They won’t see an end to the losses at these mortgage finance giants until after next year.

Moreover, a report from the regulator of the two mortgage finance giants gives embarrassing new detail on how Fannie (FNM: 12.25, +0.42, +3.55%) and Freddie (FRE: 7.94, +0.42, +5.58%) were mindlessly gunning the securitization engines well after the housing bubble had burst and Wall Street backed off.

Freddie Mac will report its second-quarter financial results Wednesday. Fannie Mae will release its results on Friday. Freddie Mac’s shares are down 88% this year, while Fannie’s shares have dropped 83%. More losses and writedowns for the two are likely on the way.

The Office of Housing Enterprise and Oversight says in a new report that the two combined own about $217 bn in securities minted by Wall Street firms that are backed by the shakiest home mortgages dating to 2004 and 2005, the height of the housing bubble.

The mortgages here are subprime and Alt-A loans, just a notch above subprime. To the extent that Wall Street firms book fair value losses on this pool, “Fannie Mae and Freddie Mac may have to do so as well,” OFHEO says.

As delinquencies and defaults on subprime loans continue, and increasingly even prime loans bellyflop, Fannie and Freddie will continue to book losses into 2009, says Credit Suisse. Some analysts say they may lose an additional $24 bn or more.

This should alarm both taxpayers and investors across the country.

Elected officials enacted a $300 bn housing bailout bill that gives these two carte blanche without any statutory limits on their colossal $5.3 tn book of business (Lehman Bros says the two have another $3.3 tn in hedges, among other items, off the balance sheet). The two have reported more than $11 bn in pre-tax losses over the last three quarters and have a history of accounting misdeeds (on a fair value basis, Fannie incurred a loss of $13.3 bn, Freddie, $24.7 bn, OFHEO says).

The housing rescue now lets the government inject tens of billions of taxpayer dollars into these two publicly traded companies, who clearly have failed in their fiduciary responsibilities. The government can now use tax dollars to buy unlimited equity stakes in the companies and their bonds if needed.

The thinking is, the Treasury will simply mint more debt and use that resulting capital to inject more liquidity into Fannie and Freddie, despite their history of accounting misdeeds, losses, misstatements and repeated dilutive equity raises that prove that these two companies do not know what they are doing. Also, the two can now borrow at the Federal Reserve.

Fear is now rampant that if the rescue doesn’t work, the US government must spend more than what the Congress said it would cost to bolster Fannie and Freddie, $25 bn, a sum it cooked up in order to sell the $300 bn housing bailout bill.

Remember, the government’s estimate of the cost to taxpayers for the S&L crisis rose from an initial $50 bn to more than $124.6 bn (not inflation adjusted).

More importantly, Congress spitballed that $25 bn number even though just this past month it sent in bureaucrats from the Federal Reserve and the Office of the Comptroller of the Currency to go find out what the heck is really sitting on Fannie and Freddie’s books, as it clearly doesn’t believe the management at these two levered up examples of crony capitalism.

The fear is, too, that the government may have to swallow these two obesities, causing the US dollar to plunge in anticipation of the need to mint more dollars, creating more inflation (not to mention the $99 tn in unfunded liabilities at Social Security and Medicare, according to Fed stats).

In effect, US taxpayers have been loaded into the backseat of Congress’s spaceship pointed directly at the center of the sun.

Because the market believes the US government has given Fannie and Freddie an “implicit guarantee”of their debt, for years both have used that backing to execute a sweet carry trade, where they can borrow money much more cheaply than banks and then turn around and use that money to buy things such as higher-yielding mortgage-backed securities from lenders, in turn injecting liquidity into the lending system to make more loans. The two also sell guarantees against defaults on loans for a fee.

For years, Wall Street believed their obligations were “nearly as good as Treasurys themselves,” notes Dennis Gartman of The Gartman Letter. Indeed, their securities traded as if the government backed them, and US government debt traded as if the government did not back them.

Fannie Mae was born in 1938 as part of FDR’s New Deal to get the country out of the Great Depression and provide home ownership. Back then, millions of Americans were struggling to buy homes, and also faced foreclosures, as banks weren’t lending and mortgage money had dried up.

For years Fannie sat on the government’s books, helping to expand the real estate industry. In 1968, the LBJ administration, worried about the effect of the Vietnam War on the federal budget, moved Fannie Mae off the government’s books, and Fannie became a publicly traded company.

When the savings-and-loan industry wanted its own mortgage financing creature to play with beginning in 1968, Congress obliged and in 1970 Freddie Mac was born. The two quasi-socialist mortgage finance giants then became to the US economy what off-balance sheet vehicles were to Enron, Gartman says.

When Freddie Mac and Fannie Mae were limited in the dollar amount of mortgages they could buy and securitize, to $417,000, in the ‘90s, Wall Street stepped in to securitize these loans.

Wall Street then manufactured all sorts of subprime paper, paid the credit ratings agencies to get rosy ratings, and then sold this drunken daisy chain of paper to all sorts of unwitting investors from here to the Arctic Circle, now sitting as landfill in portfolios run by pension funds, hedge funds and local governments.

Wall Street firms then kept a sizable slug of this bad paper off their balance sheets to keep financial results rosy, and then wrote themselves sweet bonus checks off the goosed-up numbers.

So Wall Street, with the help of Fannie and Freddie, shot these risky loans into the ether, thus breaking the bond between the overseer, meaning the lender, and the borrower. Why care about monitoring a borrower who has no skin in the game with a zero-down mortgage when you’ve entirely offloaded that loan as a security?

As far back as 1987 the Financial Accounting Standards Board warned there was no adequate way to value these derivatives, and now Frankenstein derivatives are sluicing financial poison through the system.

Then Fannie and Freddie itself started buying Wall Street’s mortgage backed securities, securities backed by zombie loans given by banks such as Countrywide Financial (CFC), which already had pointed its conveyor belt of bad loans at Wall Street.

When the credit markets seized up in 2007, Wall Street stopped doing much of these securitization deals as its recycling machine for these cut and paste jobs had sand thrown in its gears.

But as Wall Street stepped back, check out how Fannie and Freddie stepped in big time.

OFHEO says in its recent report that while the volume of single-family mortgatges securitized in 2007 fell by 8% to $1.9 tn, as the number of single family mortgages originated declined, “Fannie Mae’s and Freddie Mac’s combined share of MBS [mortgage-backed securities] issuance rose substantially to 61.6% from 46.7% in 2006.”

Indeed, OFHEO says Fannie and Freddie “increased their MBS issuance by nearly one-third in 2007 as competition” from Wall Street “virtually ceased in the second half of the year,” though OFHEO says the two started to curtail their purchases of securities backed by shoddy loans. Too little too late.

Now teetering atop Fannie’s and Freddie’s painfully razor thin $54 bn in net worth is a pyramid of $5.3 tn in debt that is nearly half the size of the US gross domestic product. The two have much higher leverage ratios than banks or hedge funds, but lower borrowing costs due to their implicit government backing. The two whittled down their capital cushions after they gunned their lobbying engines on Capitol Hill, showering elected officials with money.

JPMorgan Chase (JPM: 41.10, +0.96, +2.39%) or Bank of America (BAC: 33.69, +1.07, +3.28%), for example, have almost as much bank-level capital as these two “combined supporting one fifth of the commitments,” says the research website The Institutional Risk Analyst, published by Lord, Whalen LLC.

So the fear is that, as mortgages belly flop right and left and an increasing number of homes go into foreclosure, the two are insolvent. Former Fed official William Poole has said as much of Freddie Mac.

But instead of reining in their colossal, outsized portfolios which has caused such danger to taxpayers, the new housing rescue legislation went in the opposite direction. It would increase the statutory limit on the national debt by $800 bn, to $10.6 tn, as the two would now get to buy and back jumbo loans worth $625,000.

And as economist Edward Yardeni points out (his reports are a must-read), both “have been scrambling to plug all the holes in their huge mortgage portfolios.” Citing the Wall Street Journal, Yardeni notes that at the end of last year, the two “started guaranteeing payments on loans that back mortgage securities held by others to delay recognizing losses on some delinquent loans.”

Yardeni adds that “earlier this year, in their most shocking (desperate) tactic to reduce losses, Fan and Fred started making loans of up to $15,000 to people who have fallen behind on their mortgage payments.”

Here are the stink bombs, potholes and steam pipes bursting in these two reckless publicly traded companies:

*Both have a total of a microscopicâ€"did you see it, did you catch it?â€"$54bn in net worth, generally assets minus liabilities (don’t listen to the $81 bn figure tossed around for their total capital, that’s a pro forma fake number that doesn’t include certain losses).

*Teetering atop that razor thin wedge is a pyramid of $5.3 tn in debt.

*One stink bomb is the total of $260 bn in securitized assets backed by subprime and Alt-A loans, loans which sit in between subprime and prime. Those sums dwarf their capital positions.

*Freddie has $156.8 bn in level three assets, those illiquid securities it can’t get a pricetag on because no one wants them now. Remember, under US accounting rules, it gets to assign its own values to these assets, they could be worth more, they could be worth less.

*Fannie has $56.1 bn in level three assets, or about a seventh of its fair valued assets.

*Fannie and Freddie have combined debts of $1.59 tn, borrowings they made merely to operate their businesses. Again, that’s against just $54 bn in total net worth. Their guaranteed liabilities were 29 times their net worth at the end of the first quarter.

*They each have $2.25 bn pipelines into the Treasury, which the government now wants to expand.

*Forty years ago, when they went public, Fannie had debt of about $15 bn. Do the math against Fannie’s $804 bn in liabilities today, and the pipelines should be about $120 bn each.

Still believe that $25 bn figure Congress is selling you?