The United States should support Honduras against Manuel Zelaya

Some have asked for my views on the Honduran so-called “coup” in which the former Honduran President, Manuel Zelaya, was removed from office upon the order of the Honduran Supreme Court.   Having read the relevant documents in the original Spanish, I agree with Miguel Estrada that the removal was both legal and necessary.

For reasons set forth in more detail in Estrada’s Los Angeles Times op-ed (July 10), in the Corte’s Comunicado Especial (linked to the picture below), and in the documents supporting it, those who are full informed have every reason to applaud la Corte Suprema de Justicia Hondureña for legally and properly sending a would-be Hugo Chavez packing.

Corte Suprema

Like me (and unlike Barack Obama) Estrada speaks Spanish, actually works as an attorney and has read the Honduran Constitution and other official documents by which the Honduran Supreme Court legally ordered the removal of then-President Zelaya.  Americans (and Europeans) who think they know que pasa in Honduras would do well to read what Estrada has to say. Continue reading

Obama mortgage plan: Every American with a mortgage should call their lender

When I first watched commodities traders at Chicago’s CME denounce President Obama’s Homeowner Affordability & Stability Plan, I was on board with the traders. “How dare anyone ask that I help pay off my neighbor’s mortgage? If they bit off more than they could chew, that’s their fault!” But I began to have second thoughts . . .

. . . whose misdeeds in this crisis are worse? How are the mistakes of individual home buyers morally or financially worse than similar miscalculations by these very commodities traders or by Lehman Brothers, GM, Chrysler or Citigroup? These companies and professionals are also losers, aren’t they? They arguably took risks that they should never have taken, in many cases totally abdicating their professional duties of care and due diligence, going deep into debt to buy stuff they did not understand and could not afford. Continue reading

Stimulus bill features 344 pages of tax code changes, credit for plug-in electric cars

The House of Representatives this afternoon passed the 1,071-page Obama-Pelosi “economic stimulus” bill on a 246-183 vote with no Republican support and seven Democrats voting against.  One clear group of winners are tax advisors who can look forward to additional work parsing the bill’s 344 pages of tax changes.  Continue reading

Geithner nomination reduces Obama’s trust account

Timothy Geithner’s tax pecadillos should disqualify him for the nation’s top tax post.  Secretary of the Treasury is too high an office for a brilliant lawyer who repeatedly and apparently knowingly underpaid his taxes by thousands of dollars.  But to be fair, neither should Barack Obama be sworn in as President of the United States next Tuesday unless he first produces a valid birth certificate proving that he meets the constitutional prereqs for the nation’s highest office.

The disparity in the level of scrutiny applied to Geithner and Obama is remarkable.  On balance, a President’s qualifications for office should be viewed as more essential than those of the Treasury Secretary.  Yet, in this case, Geithner’s integrity and transparency are being examined far more closely than Obama’s. Continue reading

Not so fast, Johnathan Weil: Citigroup & the fair value illusion

Johnathan Weil called on Citigroup today to “properly confess” the “rot on Citigroup’s $2.1 trillion balance sheet.”  Weil is sure the rot is there because if it weren’t Citigroup “wouldn’t have needed last week’s government rescue [including] a new $20 billion investment by the Treasury Department, plus a guarantee covering about $306 billion of the bank’s assets against most losses.” I beg to differ.

The “rot” may well be an illusion created by poorly-drafted accounting principles applied in draconian fashion by auditors spooked by the specter of ruinous lawsuits.  Citigroup’s request for government assistance may well be an appropriate strategic response to the illusion.  In the market place, a good illusion beats a bad reality most any day.

Weil assumes facts not in evidence and arguably misapplies SEC regulations in demanding the Citi book losses now.  Under SEC rules, Citigroup would be obligated to “confess” losses on Form 8-K only if Citi’s board concludes that a material charge for impairment is required under generally accepted accounting principles.  If the board either has concluded that such a charge is not required or has not yet concluded that one is, no Form 8-K confession is called for. Continue reading

Jeffrey Miron: No bailout; abolish Fannie Mae & CRA

“Talk of [financial] Armageddon . . . is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.” So says Harvard economist Jefffrey A. Miron, writing today at CNN.

What does Miron say government should do now?  For starters, stop the cruel pretense that people who can’t pay back a freely-negotiated mortgage should be homeowners: Continue reading