Tuesday, September 30, 2008

Case - Shiller Price Indices

Year over year price drop for the 10 city Composite Index was 17.49%.

Monday, September 29, 2008

Largest Point Drops in The DJIA

Date                             Closing Value              Change (points)           Change (%)

09/29/2008                  10,365.45                   -777.68                       -6.98%

09/17/2001                  8,920.70                     -684.81                       -7.13%

04/14/2000                  10,305.77                   -617.78                       -5.66%

10/27/1997                  7,161.15                     -554.26                       -7.18%

08/31/1998                  7,539.07                     -512.61                       -6.37%

10/19/1987                  1,738.74                     -508.00                       -22.61%

09/15/2008                  10,917.51                   -504.48                       -4.42%

09/17/2008                  10,609.66                   -449.36                       -4.06%

03/12/2001                  10,208.25                   -436.37                       -4.10%

02/27/2007                  12,216.24                   -416.02                       -3.29%

07/19/2002                  8,019.26                     -390.23                       -4.64%


The proliferation of debt is necessary for the expansion of the money supply. A fiat based, fractional reserve system is employed in the United States of America. Under this system, there is no limit to the expansion of the money supply as long as there is an ability to issue more debt. Borrowing money entails the payment of interest on the outstanding balance owed, in addition to the repayment of the loan itself. Therefore, additional money supply is needed to create the funds necessary to make the interest payments. This additional supply is provided by the same mechanism: debt creation. Once again, there is no limiting device in a fiat based, fractional reserve system. A loss of confidence in the ability of the system to facilitate debt issuance is the endogenous variable. This loss of confidence could emerge as expectations of future earnings growth (personal income, net earnings, tax revenue, etc.) deviate from the growth rate of debt issuance. Default is born.

The housing market just happened to be the chosen arena of exploitation. The public rushed to real estate after the collapse of the internet bubble, buoyed a dovish central bank, loan securitization and the structured asset market, the expansion of niche loan markets (sub-prime, Alt-A) and Government Sponsored Enterprises, increased marketing of certain loan variations (piggy-back, pay-option, ARMs), and the liberalization of underwriting standards (no/little documentation loans).

A house is a manufactured good. It depreciates. Historically, home prices only keep up with inflation (no real return).

Does the Market Know How Congress Works?: Redux

Final Tally:

228 Nays
205 Yeas

I am surprised that this did not pass, but I am not shocked that the Republicans did not turn out for a lame duck President. Loyal reader Flip makes a good point: perhaps the House pressed the vote today so it WOULD fail. The lack of a package pushed the Dow to a 777 point loss today. When voters see their financial assets smacked around in the morning's paper, they might not object as vehemently to the bail out. Without the threat of a voter backlash, the House can pass a revised bill and save face.

Zoinks ! Wall Street is Shocked by Nay Votes

Emergency Economic Stabilization Act of 2008 is voted down in The House of Representatives.

Bank Troika USA

Some pro forma numbers for you (based on 6/30/08 FDIC data):

Citigroup + Wachovia ------- $688 billion in domestic deposits
JP Morgan + WaMu ---------- $690 billion in domestic deposits
*Bank of America + Merrill - $840 billion in domestic deposits

Total: ------------------------ $2.218 trillion in domestic deposits

Banking Industry Total: ------ $7.029 trillion in domestic deposits

That would be 32% of domestic deposits in the hands of 3 holding companies.

Citigroup + Wachovia -------- $1.295 trillion in total deposits
JP Morgan + WaMu ---------- $1.027 trillion in total deposits
Bank of America + Merrill ---- $1.022 trillion in total deposits

Total: ------------------------ $3.344 trillion in total deposits

Banking Industry Total: ------ $8.573 trillion in total deposits

That would be 39% of total deposits in the hands of 3 holding companies.

Please note that these numbers may be a bit off since they are 3 months old. However, the implication for the banking public is clear: pricing power is building and the consumer is in more trouble than ever before.

* There is an FDIC statute that prohibits an institution from holding more than 10% of domestic deposits via acquisition. The numbers I used included Countrywide Bank, FSB, which does not roll up into the Bank of America holding company. I will research this.

Wachigroup, Inc.

Citigroup buys the commercial banking assets of Wachovia for $2.2 billion in Citigroup stock. Also included are Wachovia's private bank, middle markets & investment bank. The retail brokerage arm and the mutual fund company are NOT included.

Citi plans on raising $10 billion in capital via common stock offering. In addition, Citi will cut their dividend in half ($1.28 to $0.64 per share)

Citigroup, in essence, buys puts on the mortgage stuff from the FDIC for $12 billion in preferred shares & warrants.

Citi really rescues the bondholders of Wachovia in this trade. More to come later.

Sunday, September 28, 2008

Emergency Economic Stabilization Act of 2008

According to the media, an agreement in principle has been struck in Congress. The vote may take place between Monday & Wednesday of this week. Call me a glass half empty guy, but if it was that agreeable of a deal, why aren't they voting now? I'm thinking that they are several votes short. Anywhoo, I'm reading the draft copy now, it will be a long night.

Side note: The New York Times is reporting that Citigroup & Wells Fargo are bidding for Wachovia. Does the winner get Wachovia?

The Wall Street Journal reports that Banco Santander is still considering a bid, but haven't they had enough with that terrible Sovereign Bancorp trade (they bought 20% of the company and calls struck @ $40 for $2.4 billion back in 2005, the calls have since expired)?

Saturday, September 27, 2008

A Note on Derivatives: Size of the Market

Much has been written about the size of the derivatives market. According to the Bank of International Settlements, the notional amount of over the counter derivatives outstanding was $596 trillion on 12/31/07. However, unlike conventional securities markets (or even exchange listed derivatives), market conventions do not include an embedded netting mechanism. For example:

Suppose a speculator believes that interest rates will move higher. The speculator may choose to sell a Treasury note short. If interest rates do move higher, the speculator can buy the Treasury back at a lower price and pocket the difference. On the other side of the trade, another participant initially goes long and will sell the note back to the speculator.

At the end of the trade, both parties have a zero position and one party collects a profit.

The speculator could also pay fixed in an interest rate swap to achieve a similar exposure to selling the note short. The difference is that the position is frequently closed by entering into a new, but principally offsetting, position. Periodically, the dealer community will net positions together and transfer payments based on the net present value of the trades. But at any given time, the number of contracts outstanding may not be an accurate reflection of an institution's risk.

This short post does not do the topic justice, please drop me a line if you would like to discuss further.

Senate Passes Bill: $634 Billion in Funds

No, not THAT bill. Deliberations on the "Paulson Plan" are still going on. This is the bill making appropriations for the Department of Homeland Security (H.R. 2638). Some highlights:

---- $25 billion in loans to U.S. automobile manufacturers

---- $488 billion for the Department of Defense

---- $23 billion for hurricane assistance, elderly assistance and home heating subsidies

About the loans for the auto manufacturers: It is Section 129 of the bill. Of the $25 billion, it authorizes $10,000,000 for the administration of the loan program. The loans are subsidized by the Federal Government, meaning the loans will carry an interest rate that would be substantially lower than the interest rate the financial markets would charge the auto companies (assuming they could borrow in the first place). An Associated Press article estimates that the subsidy will cost the taxpayer $7.5 billion.

Biden did not vote

Obama did not vote

McCain did not vote

Clinton did not vote

Of course, both NJ Senators voted yea


The Quintessential Anti - Hero

Paul Leonard Newman
January 16, 1925 - September 26, 2008

Cool Hand Luke, The Hustler and The Sting on WPIX are some of my favorite movie memories. Over $220 million donated to charity from his product lines.

JPM & WM Follow Up

The FDIC has confirmed via a press release that the unsecured creditors of the Washington Mutual BANKS, will have to go the route of petitioning the receiver. Back of the line fellas, wait and see what nuggets you get. "...the FDIC as Receiver for Washington Mutual Bank does not anticipate that equity and subordinated debt holders of the bank will receive any recovery on their claims. "

My estimate of potential losses was too high. JPM also assumed secured debt of the WaMu Banks. Instead of $20 billion, I am guessing $7 - $10 billion. I may adjust this again as more data on deposit amounts and other goodies become available.

Washington Mutual, Inc. is, of course, still toast. The holding company and an investment subsidiary have filed their Chapter 11 paperwork. Although I am obviously thrilled about the $0 bill from the FDIC, this is a total demolition of equity holders and creditors. I would love to see this become the new model for failures.

This has essentially shut down the interbank market, not that the money was flowing like wine before this. According to some sources, Wachovia 30 year subordinated debt is trading @ 45 cents on the dollar. So the credit markets are closed too. What they need is a massive inflow of cash with very few strings attached and a Wall Street insider to pass out the checks.

Friday, September 26, 2008

The Difference a Year Makes


AIG_______ $67.53
BSC_______ $123.00
FNM _______$61.59
FRE _______$59.55


BSC________Acquired by JPM for $10

Thursday, September 25, 2008

Now I get It...I think

OK, so JPM buys the assets of WaMu's banks from the FDIC for $1.9 billion. The press release states that all of the deposits and "certain liabilities" will be included in the transaction.
JPM is assuming $265 billion in liabilities. Using the data from the 6/30/08 call reports, the 2 WaMu banks held $193.1 in deposits and $69.1 billion in FHLB Advances. Add them together and we get $262.2 billion. Pretty close to the $265 billion figure.
Total liabilities equaled $299.4 billion, so let's say that leaves roughly $34 billion in liabilities unaccounted for.
Total assets less goodwill and intangible assets totaled $339.2 billion. JPM is acquiring $296 billion in assets, leaving $43.2 billion in assets to pay off the liabilities and capital holders.
Hold on though. JPM is acquiring $31 billion in net assets for only $1.9 billion. So we take the $29.1 billion from the $43.2 billion and they have only $14.1 billion left.
For argument's sake, let's say that WaMu could sell those $14.1 billion in assets and actually raise $14.1 billion. Liability holders are in the hole for $20 billion and equity capital holders get nothing (listed at over $53 billion on 6/30/08).
So, we have a situation in which not only are the holding company creditors TOTALLY hosed, but those who lent to the BANKS are hosed. This does not happen very often and could have dramatic repercussions. Rating companies have traditionally bestowed higher ratings to banks because that is where the assets actually reside. The FDIC is certainly not obliged to share in the pain to mitigate the situation of bank creditors. However, I do not recall such dramatic losses at the bank level since the S & L Crisis.

.....For JPM Shareholders?

“WaMu’s strong brand and irreplaceable retail banking franchise have enormous potential, especially in today’s environment, and I am thrilled to have this opportunity to create value for shareholders.”
-- Alan H. Fishman, upon his appointment as WaMu’s CEO on September 8, 2008

Dissension at The Federal Reserve?

Dallas Federal Reserve Bank President Richard Fisher said the proposed $700 billion rescue of financial institutions backed by Fed Chairman Ben S. Bernanke would plunge the U.S. government deeper into a fiscal abyss. The plan by Treasury Secretary Henry Paulson to buy troubled assets from financial institutions would put "one more straw on the back of the frightfully encumbered camel that is the federal government ledger," Fisher said today in the text of a speech in New York. "We are deeply submerged in a vast fiscal chasm."

Courtesy of Bloomberg, L.P.

Washington Mutual (banks only) Sold to JP Morgan Chase

"JPMorgan Chase acquired the assets, assumed the qualified financial contracts and made a payment of $1.9 billion. Claims by equity, subordinated and senior debt holders were not acquired."

-- FDIC Press Release

WaMu was closed tonight by the OTS & FDIC. JPM acquired the banks only (Washington Mutual Bank & Washington Mutual Bank FSB), leaving common share holders, preferred share holders and debt holders holding the bag. The $1.9 billion payment was made to the FDIC as receiver of the failed institutions.

No losses to the FDIC, finally some good news for the taxpayer. Although how there will be no losses absorbed by the insurance fund is a wonderful question. Details about the plan are not plentiful at this point.

House of Representatives Passes Bill: Auto Aid Package

$25 billion in loans

Details to come.

Congress now has the bill, why not pass it?  


So I checked the NYSE website to see if any other additions were made to the no short list. Indeed there were, bringing the total to roughly 1,000 companies (exchange traded & over the counter combined). By the way, as of 12/31/07, the NYSE states that there are "nearly 4,000 listed companies" on the exchange. So much for capitalism, a number of companies equivalent to 25% of their listings can't be shorted.

Anyway, CVS Caremark was added this morning. Yep, that is the holding company for all of those pharmacies. Not that I am a conspiracy fan, but the only possible reason for this is to mess with hedge funds. CVS is working on acquiring Longs Drug Stores (LDG). Typically, an investor would short CVS and buy LDG to make a convergence bet. Upon announcement of an acquisition paid for in stock, the prices of the two equities in question would begin to converge to the stated payment ratio. This does not happen all at once because there is some risk that the deal may fall through (remember the Sprint & MCI deal, hedge funds lost on that one). So a small, but high return on capital, profit can be made on this bet.

And.........economic reports today: durable goods orders fell more than expected, initial jobless claims were higher than expected, GE lowered earnings guidance and equity futures were higher.

Strange days indeed.

Wednesday, September 24, 2008

How Much is TOOOOOOO Much ?

Although the details are still to be determined, it appears that the U.S. Treasury will spend $700 billion to buy unattractive, illiquid and unhedgeable mortgages and mortgage backed securities. What makes the Government think that they can trade a product that no other desk could, a product for which there is no data, no history, no reliable models....got me. The securities are "bad" for a number of reasons: bad collateral, bad pricing (initial rates of return were too low), bad structures (leveraged, embedded options, contractual catches, etc.).

I sense that am going to rail on and become incoherent because I am truly upset by the amount of execution risk that talking heads are arrogant enough to assume. So, I'll stick to the facts:

U.S. Government General Fund Debt: $ 9.7 trillion

Office of Management & Budget 2009 Deficit Estimate: $ 482 billion

That brings the debt to roughly $ 10.2 trillion next year. Assuming GDP growth is 4% (yeah, I know. But I'll run with the Budget Office's estimate.), the debt to GDP ratio would be 68%. The last time we hit that high water mark, President Eisenhower was working hard to pay off the WW II debt.

Since the plan summary presented to Congress included a request to increase the debt limit by $ 700 billion, it is safe to assume that Treasury securities will be issued to fund the acquisition plan. Hmmm, borrowing money to buy crap bonds.....sounds like a winner.

That now brings the debt to $ 10.9 trillion or 72.7% of GDP. The S & L Crisis took roughly six years to clean up, a pretty impressive feat. This resolution is bigger and messier, so I'm going to guess eight years. More guessing: half will be funded by T-Bills, 30% in 2 year notes, 15% in 5 year notes and the remainder in ten year notes.

Remember, the Treasury is kind of, sort of on the hook for Fannie & Freddie stuff. Based on GSE debt rolling off in 2009, we need to add $400 billion. I'll ignore credit losses for now, I don't have the models.

$ 11.3 trillion

75% of GDP

Wow. There is no margin for error. If you think the Chinese government played games with our debt markets before, what on Earth is next? Where will the capital come from after the Treasury itself sucks up the liquidity? I'm going to sleep.

International Business Machines, NA ??


I could be misreading this, but IBM is now on the no short list? Why?

Need Your Help

I heard on CNBC this morning that the GS preferred shares that Buffet bought were puttable @ 90 cents on the dollar. If that is the case, Buffet makes 10% if the market is flat, participates in a rally thanks to the warrants and can only lose 10% if it is puttable.

I have been trying to confirm this, but I have not been able to thus far. Anybody know?

Thank you.


Today is the ex dividend date. The amount of the distribution is $3.82302 per share, to be paid on 9/30/08.


SEC Bans Negative Thoughts and Complaining

I don't know how I missed this, but 137 more companies were added to the ban on short selling (936 total now). GM & GE were added since their net incomes are highly dependent on financial transactions. Moody's was also added. Moody's ???? A rating agency? The one that is 19.7% owned by Buffet? Hmmmm, and Buffet invests $5 billion in GS 2 days later, a move that one would think bolsters confidence in the market? M & T Bancoporation was also added to the no short list (Buffet owns a chunk of this one as well), but this is bank after all.

Buffet & GS


Berkshire Hathaway will buy $5 billion of perpetual preferred stock

The coupon will be 10%, it is callable anytime at a 10% premium

Berkshire will also receive 5 year warrants to buy roughly 43.5 million shares @ $115.00

So, Buffet can double his money in 7 years on the preferred shares alone if the market is flat and he participates on the upside. On the downside, he is clearly depending on the acquisition fund to support the overall market.

Separately, GS will sell $2.5 - $5.0 billion in common shares to solidify their equity position.

(Totally separate, Capital One Financial will sell 14 million shares today. So Goldman & Cap One can sell short their own shares but I can't?)

Bernanke Gets an "F" in Game Theory

As I mentioned in a previous post, the proposed U.S. acquisition fund would have to pay a premium over the market price for the bad assets to nudge the banks to action. However, Chairman Bernanke suggested in his testimony yesterday that the price should be close to the "held to maturity" value of the assets. Well........

- How was the held to maturity value determined?
- Who determined that value?
- Will the U.S. Treasury be able to verify these prices in a timely fashion?

As a tax payer, I want the lowest price possible. As an economics student, I understand that a concession is necessary. As a prudent person, I want a market to determine the price.

One more thing: this is not a "bail out". The pending legislation would authorize a sum of money ($700 billion or so) for the purchase of assets. These assets could appreciate in value and hopefully result in some benefit to the tax payers down the road. The key elements of the plan should be pricing, size of fund, eligible participants and management.

Tuesday, September 23, 2008

Your Government & Your Financial Markets

Seems like a good time to review the governmental & quasi governmental rescues so far:

Bear Stearns - 3/14/08

The Federal Reserve Bank of New York provided JP Morgan with a $29 billion loan to facilitate JPM's acquisition of Bear Stearns. The loan is backed by mortgages and mortgage backed debt. It is a non-recourse loan: if the stated mortgage collateral is insufficient to pay back the loan (should JPM not repay), The Federal Reserve can't lay claim to any other JPM assets. This is not a U.S. Government rescue since the Federal Reserve is not part of the U.S. Government

Fannie Mae & Freddie Mac - 9/7/08

Fannie & Freddie were placed into conservatorship, run by the Federal Housing Finance Agency. Conservatorship is established by a court order and cedes legal control of an entity to the conservator. It does not eliminate the rights of shareholders and management (such as in a receivership), it simply transfers those rights. The U.S. Treasury Department commits $200 billion dollars to acquire preferred stock in Fannie & Freddie. The preferred stock will pay a 10% dividend. In addition, the U.S. Treasury Department will receive 20 year warrants representing a 79.9% equity stake each entity. The debt of Fannie & Freddie, as well as the mortgages they guarantee are NOT explicitly guaranteed by the Federal Government in this action. The "implicit"guarantee is strengthened. As such, the Federal Government is committed to at least the $200 billion used to acquire the preferred stock and at most the $6.1 trillion in Fannie & Freddie debt and guarantees. The taxpayer is on the hook for this one, this is a Government rescue.

AIG - 9/16/08

The Federal Reserve Bank of New York provided AIG with an $85 billion 2 year loan. The Federal Reserve will receive warrants representing a 79.9% equity stake in AIG. The interest rate on the loan is 3 month LIBOR + 8.50% (roughly 11.4% for the first set). The collateral on the loan is comprised of the total assets of AIG, non-regulated and regulated subsidiaries included. This is not a U.S. Government rescue since the Federal Reserve is not part of the U.S. Government

Note: The Federal Reserve Bank of New York is the main operating entity of the Federal Reserve System. Open market operations are conducted by the New York branch on behalf of the entire System. The System is owned by private banks and is charged by the U.S. Government to conduct monetary policy. It is supplied with a credit line from the U.S. Treasury Department.

We All Need a Little Chuckle

Economists Warn Anti-Bush Merchandise Market Close To Collapse

Game Theory

Game Theory is the branch of mathematics that attempts to quantify social decision making. When two or more parties are involved in a mutual decision making process, it is necessary to create a profile or approximation of the other party's behavior. This is particularly relevant in an auction process.

As I have mentioned before, the sale of these poor quality assets will depress the amount of capital on the seller's balance sheet. The amount of capital depletion depends on the difference between the most recent marked to market price and the execution price. As a result, the seller may reveal the fact that they are insolvent. It is also a signal to regulators that the institution has risk management issues. Information of this type is quite valuable. When (if?) short selling is allowed, speculators would easily see the target on the backs of these banks.

Therefore, in order for the process to get rolling, the Government would actually have to pay a premium to the seller to compensate them for the follow through effects of the sale. This is where Game Theory comes into play: how much of a premium do the Feds pay?

Side note: Paulson just finished his testimony in front of Congress. He sounded pissed.

Does the Market Know How Congress Works?

Surprise, surprise.....no package yet. Paulson & Bernanke will be running their roadshow today, who is the dog & who is the pony? I haven't mentioned the money market situation, but it deserves attention.

Breaking the buck hasn't happened often. LEH & AIG short term debt and commercial paper falling off the cliff was the culprit. The panic that ensued pushed T-Bill yields to essentially zero. Bernanke admitted that last Thursday was the closest we have been to a total meltdown.

Meredith Whitney cut estimates again for the money center banks.

Equity futures are modestly higher, gold is down a bit, oil is down a bit (remember, we rolled out of the Oct contract).

Wait and see mode.

Monday, September 22, 2008

Wrap - Up

The DJI gave up up of its Friday gains (and a wee bit more) today. The buying vacuum was in full effect as the short sell ban worked as it should have, although not as it was intended. As of 5:52 PM EDT, the Congressional bail-out plan is still being worked on.

Bank stocks were hammered as the interbank market has, quite simply, stopped functioning. Any day now, 3 month LIBOR will carry us over the turn. This will probably be the messiest turn since 1998.

Posted below is my comment from last Friday:

This is a shameful day in the history of the U.S. financial markets. What makes us any different from the shady characters that run the Russian, Chinese or Pakistani capital markets? Changing rule on the fly to suit the needs of the connected few and hurt legitimate traders, remove the ability of an American to have an opinion.

It is now impossible to short the stock of 799 financial companies. Some of these companies' shorts as a percentage of float was as small as 5%, tough to claim short sellers were depressing the price. ETFs have been halted. Since you can't short, option traders are hamstrung. They can't hedge puts, so how can they sell them effectively.

On Black Monday (Oct, '87) the Dow fell 20%. ONE DAY !!!!! 20% DROP !!!! No short selling ban was instituted. The Dow has dropped 20% in 10 months and we need to destroy our integrity? Why shouldn't poor management in the financials be punished by the same forces that made them multi millionaires?


- This does not replenish the capital of these financial institutions, some of whom were not even rated (so you can't claim that shorting damaged collateral agreements). Several of these companies will still need to add capital because THEY OWN CRAP on their books.

- A financial company bail out will have the following impacts: mark to market and equity dilution. The new RTC (or whatever it will be called) is not going to buy the paper at par. They will buy it or transfer it to their books at however many cents on the dollar the paper warrants. No more mystery pricing will be possible, the paper will only have a new home, not par pricing. If there are bail outs, guess what? Equity dilution. Why are people bidding stocks higher when the only possible scenario is dilution in the near future? i don't know either.

- Pakistan initiated a similar short selling ban in June of this year. the market rallied from 11,000 to 12,000 in 2 sessions. it is now trading at 9,000.

2 Minutes Until the Equity Close.....

..and we are near the lows of the day. The forced "forward buying" from last Friday has faded like Jim Cramer's hairline. He mentioned today that the financial press should get their collective act together in commenting on valuation multiples with regards to investment and commercial banks. Specifically, (he owns GS in his charitable trust, I am short GS via an SKF long) Cramer thinks that the P/E of GS reflects value relative to commercial banks. Well, just because a P/E is low, doesn't mean it can't go lower. Investment banks trade at a P/E discount to commercial banks for a reason: volatility of earnings. The fact that an institution has a large amount of leverage DOES NOT mean that it should trade at a large multiple of earnings. In fact, it often means the opposite. GS has done well not because of leverage itself, but because they made the correct trading decisions with that leverage. Their ability to earn large profits will be compromised by becoming a bank holding company. P/E convergence will happen when they decide on a merger target, but GS @ $200 per share is years away.

Crude Oil Rally

Crude oil futures contracts are moving substantially higher: The contract for October delivery has traded as high as $130.00 per barrel. However, contracts further out on the curve have not rallied as much. The high for the November contract is $109.75 and the December contract high is $109.35.

Massive short covering is the explanation for the outperformance of the near contract. The October contract expires today and the down leg in crude prices over the last few weeks led to establishment of bearish positions. In addition, I would imagine that liquidations by hedge funds and broker-dealers helped push prices below $100.

The message form the markets is clear though. The only way for the US to get out of this financial mess is to reflate the economy: Treasuries are off, the Dollar is off, commodities are higher.

Boy, John McCain is On My Last Republican Nerve

Apparently, John McCain would tap Andrew Cuomo for the job of SEC Chairman if he is elected. Arguably, the person most responsible for the irresponsibility at FNM & FRE, would be his choice? Wow, first the economy is fundamentally sound, now this. I am voting for Ron Paul on the conservative ballot, case closed.