Don't Let Obama "Devour" Your Wealth!

Obama's Dangerous "Eating Problem." Don't Let it Gobble You Up...

Dear Concerned American,

President Obama keeps lecturing about our “obesity epidemic.” But he’s the one who can’t stop eating (or smoking)!

No, not food. It’s worse! Obama is devouring the entire free-enterprise system.

In his first 100 days as president, Obama gobbled up two major automakers, wolfed down nearly 600 banks, gorged on blue-chip companies, and scarfed down the U.S. credit industry. Now he wants dessert.

President “Obama the Hungry” makes King Henry VIII look like a compulsive dieter!
I know something about overeating. It can kill you. Back when I was governor of Arkansas, I was so overweight I developed Type II diabetes. Doctors told me to lay down the knife and fork -- or else. That scared me. I cut the calories and lost 110 pounds. Only then did I regain my health.

Does bloat scare Obama? Heck no. He’s hungry for more! Fresh from gulping down $800 billion of our money to load up his Washington smorgasbord, he’s planning yet another massive banquet. Obama wants to belly up to the table and swallow the best health care system in the world. And you and I will pay the tab for this gargantuan pig-out!

As sure as heartburn follows a chili-dog, this massive “Obama-binge” will trigger hyperinflation. There’s only one way for the President to pay for this feast and you know what it is. Yes, get those presses rolling and print trillions of inflated dollars.

I’ll bet you’re thinking -- well, what can I do about it? True enough, Obama can pretty much do what he wants -- at least until the 2010 mid-term elections come along and we Americans can send him a “slim-down or else” message.

But right now, you and I need to protect the money we’ve earned and invested over the years -- before Obama’s hyperinflation chews our buying power down by multiple percentage points. This is a serious concern, believe me. It’s so serious I won’t pretend, as a politician and talk-show host, to have the answers for you. But I know someone who does.

I urge you to consider the proven financial guidance of Doug Fabian -- the renowned investing advisor who saw the financial meltdown of 2008 coming and saved a whole lot of people a whole lot of money.

Subscribers to Successful Investing, Doug’s newsletter, knew the meaning of terms like “housing bubble” and “sub-prime” long before they became headline news and the source of financial misery for millions.

This is what Doug wrote in 2006, nearly two years before the crash:

“Pay little heed to the real estate industry’s PR campaign to play down the coming housing price slump. It’s happening. The bottom is falling out for many banks, investors, and homeowners right now.”

This is what Doug is writing today:

“Never mind the endless speculation about inflation and interest rates -- they’re going up.”

Doug ’s not just warning his readers about hyperinflation, he’s steering them to investments that make money during inflationary periods. He reminds us that many fortunes were made in the 1970s when America was ravaged by high inflation and brought to the brink of collapse by Jimmy Carter -- a president eerily similar to Barack Obama.

Look, I’m no investing wizard. But I invest. I have to. So do you. Counting on Social Security while Obama is in office is a little like saying, “The Light Brigade is about to charge? Sign me up!”

But having someone with the proven know-how and track record of Doug Fabian is a comfort. That’s some track record, by the way. Successful Investing has generated double-digit annual returns for ordinary investors for 32 years and counting. Best of all, Doug does all the work for you.

Don’t just take my word. Investor’s Business Daily called Doug “one of the best market timers in the business.” And The Hulbert Financial Digest -- the watchdog of investing newsletters -- rated Doug’s trading services in the Top 10 for 2008 -- out of 186 financial publications over all.

Count on it, the “Obama-binge” will result in hyperinflation. ($800 billion in government spending makes it all but inevitable). You can’t control that. But when the day of reckoning comes, you can be one of the few whose portfolio is already adapted to profit from it. Could you ask for anything better? Well, you can. But you’ll have to wait till 2012 before we elect a new president!

Sincerely,

Mike Huckabee

Power Grab

The Obama administration is engaged in the most sweeping power grab in modern American history, but few people seem to care. In barely four months, we've witnessed the president and his minions taking over insurance companies, banks, and car companies, forcing private companies to sell off assets, appease unions, and stiff bondholders. Administration officials have insisted some companies take government handouts even if they don't want them and told others they can't pay back the money they've borrowed until the government gives them permission. Now, the president has decided he'll appoint a "compensation czar" whose job it will be to decide what constitutes fair pay for corporate executives. Why stop there? And, of course, they won't.

The latest move -- the appointment of Washington lawyer Kenneth Feinberg to oversee pay of the top employees at seven companies that have taken government funds -- may not seem radical, but it is. Earlier this year, in response to public criticism of the retention bonuses paid to some executives at the troubled insurance giant AIG, the administration proposed capping executive pay at $500,000 at firms receiving government assistance through the Troubled Asset Relief Program. But Treasury Secretary Tim Geithner abandoned that plan when he finally figured out that the execs would simply bail on the company, leaving the government without experienced and talented hands on deck.

So now the administration is moving to Plan B: Forget about pay caps per se but appoint a government overseer to set pay individually. Until now, in publicly traded companies that job fell to the board of directors and its compensation committee, whose legal and fiduciary responsibilities entail acting on behalf of shareholders. Directors are elected by the people who own the company: from individuals who own a few shares of stock to institutions and mutual funds that may own millions of shares.

The government, primarily through the Securities and Exchange Commission, oversees the board's stewardship, while other entities play a role as well. The securities exchanges -- the New York Stock Exchange, NASDAQ, etc. -- also have rules that govern the conduct of boards of directors, including restrictions on who sets executive compensation. The compensation committee at publicly traded companies must be composed of entirely of independent directors -- those who have no direct ties to the company or its management either by current or, in certain instances, former employment, for example.

Compensation committees act independent of management, but they don't act in a vacuum. They often hire compensation consultants (who must have no ties to the company) to advise them on the best pay practices. They evaluate their pay structure compared to other companies of similar size and complexity or who are in the same line of business. They evaluate the performance of key executives against financial results, the achievement of personal and company objectives, and other criteria. It is a long and arduous process (I know, for more than a decade I've served on and now chair the compensation committee of a NYSE company).

And the rules governing disclosure of executive compensation have become much stricter in recent years, especially since the enactment of Sarbanes-Oxley, federal legislation that passed in the wake of Enron and other recent corporate scandals. The law now requires that, in addition to a Compensation Committee Report on executive pay, management must produce an extensive compensation discussion and analysis to be included in proxy statements sent to all shareholders. The information includes a table showing exactly how much the CEO, chief financial officer, and three highest-paid employees in the company earn, including bonuses, stock options and grants, and what benefits and perquisites they are entitled to and their cost. Similar information is provided for director compensation. If shareholders don't think they're getting their money's worth from these executives or directors, they can dump the board of directors at the next election. Or at least that's how it is supposed to work.

But enter the Obama administration to rewrite the already extensive rules. Now one man -- the compensation czar -- is going to oversee this process at seven major corporations. And who oversees him?

From the president on down, the Obama administration is filled with people who have little or no idea how the market works. Most have never drawn a paycheck in the private sector, much less had to meet a payroll or make a profit. But they're convinced they know how to run things, down to the last detail. There's no word adequate to describe the sheer arrogance of this group.

by Linda Chavez - Chairman of the Center for Equal Opportunity and author of Betrayal: How Union Bosses Shake Down Their Members and Corrupt American Politics

Source: Townhall.com

Posted: Knowledge Creates Power

Related Resources:

• We Warned You About Czars – Jim Harper and Fox’s Neil Cavuto Discuss “Cyber Czar”
• Palin blasts Obama administration: Government wants to "control the people"
• White House Set to Appoint a ‘Pay’ Czar
• Obama the Destroyer
• End of Free Speech - Endoffreespeech.com
• American Progressivism – A Must Read
• Liberal Fascism – Just out in paperback

Senior creditors: Chrysler deal violates 5th Amendment

If the Obama administration expected the senior creditors of Chrysler to fold their tents under political pressure, they may have gotten a rude shock today.  Thomas Lauria, who accused the White House of threatening the creditors withn humiliation at the hands of the White House press corps, has filed a motion to halt the administration’s machinations on behalf of the UAW in the Chrysler bankruptcy.  Lauria and his allies claim that the Obama administration has violated the Constitution in their bid to devalue the senior creditors’ holdings on behalf of junior creditors, and have some precedent to support the allegation.

The heart of the argument starts on page 8 (via HA commenter Outlander):

III. The Taking of Collateral through a Direct or Indirect Use of TARP Authority is Unconstitutional.

13. The Treasury Department relies on TARP as the purported authority to justify the disparate treatment under the 363 Sale, even though TARP was enacted after the Senior Lenders’ liens on the Debtors’ property were already in place. The Supreme Court long ago recognized, however, that a secured creditor’s interest in specific property is protected in bankruptcy under the Fifth Amendment. Louisville Joint Stock Land Bank v. Radford, 295 U.S. 555, 594 (1935). That case involved a Depression-era statute that was intended to help bankrupt farmers avoid losing their land in mortgage foreclosure. The statute in Radford provided that the bankrupt debtor could achieve a release of the security interests either (i) with the lender’s consent, purchasing the property at its then appraised value by making deferred payments for two to six years at statutorily-set interest rates; or (ii) by seeking from the bankruptcy court a stay of the proceedings for up to five years during which time the debtor could use the property by paying a rent set by the court, which payments would be for the benefit of all creditors, with a purchase option at the end of that period. Id. at 856-57.

14. Justice Brandeis noted that the “essence of a mortgage” is the right of the secured party “to insist upon full payment before giving up his security [i.e., the property pledged].” Radford, 295 U.S. at 580. In invalidating the statute, the Court stated that “[t]he bankruptcy power . . . is subject to the Fifth Amendment,” and that the pernicious aspect of this law was its “taking of substantive rights in specific property acquired by the bank prior to the act.” Id. at 589-90 (emphasis added). Thus, Congress could not pass a law that could be used to deny to secured creditors their rights to realize upon the specific property pledged to them or “the right to control meanwhile the property during the period of default.” Id. at 594. That is precisely what the Treasury Department would have Chrysler do here, with respect to the Chrysler Non-TARP Lenders’ property rights that were acquired prior to the enactment of TARP.

15. Relying on purported authority provided by TARP, the Treasury Department is demanding that Chrysler’s assets be stripped away from the coverage of the Senior Lenders’ liens – thereby impairing the rights of the Senior Lenders to realize upon those assets – so that those assets may be put in New Chrysler and used to the benefit of unsecured creditors in this proceeding, who will then be paid much more than the Senior Lenders. But, even assuming that TARP provides the Treasury Department with authority to provide funding to the Debtors and impose the transfer of collateral away from the Senior Lenders, TARP was enacted long after the Senior Lenders contracted with the Debtors and received senior liens on the Debtors’ property. Radford specifically disallowed the use of a law to retroactively alter existing liens on property.

16. Here, the proposed sale of the Debtors’ assets will leave the Senior Lenders with a diluted pool of assets and no further interests in the operating assets covered by their specific liens. The Constitution forbids this application of a law retroactively to undercut the Senior Lenders’ pre-existing property rights in favor or inferior creditors.

17. Finally, that the Treasury Department would take these unconstitutional actions to help the United States address difficult economic times is not an answer. Indeed, the same justification was expressly rejected in Radford, where Justice Brandeis noted that a statute which violated secured creditors’ rights, but which was passed for sound public purposes relating to the Great Depression, could not be saved because “the Fifth Amendment commands that, however great the nation’s need, private property shall not be thus taken even for a wholly public use without just compensation.” Id. at 602.

18. What is really striking here is that what is being proposed by the Sale Motion would strip the Collateral away and allow it to be put to use as new capital in New Chrysler for the benefit of existing and other creditors – even though the Chrysler Non-TARP Lenders have been given no opportunity to realize upon that Collateral to the point of full repayment ahead of at least $14 billion of selectively identified unsecured creditors.

One might think that a Constitutional scholar like Barack Obama would have already known that, but either this precedent escaped him or he doesn’t care about it at all.  Brandeis acted to uphold contract law, especially in the face of a government interest in paying off politically-connected unsecured creditors ahead of the senior creditors.  There is no other reason for Brandeis to make that decision, as only government could insert itself into the contractual relationship during a bankruptcy proceeding — just as Obama has done with Chrysler.

Lauria’s argument seems very compelling here, especially given Brandeis’ rather clear assertion that bankruptcy proceedings have to fall within the 5th Amendment — and that government can’t implement a taking to satisfy its own arbitrary aims by ignoring the relationship of the creditors to the default.  We’ll see whether the court rebukes Obama.

POSTED AT 1:36 PM ON MAY 4, 2009 BY ED MORRISSEY