Michael Ramirez lobs in another...

John Bolton Unveils Foreign Policy Test for Candidates

Jazz Shaw -  Hotair

The timing for this probably couldn’t be better. It’s not that we don’t have plenty of domestic issues requiring attention, but we’ve reached a moment in the campaign where the focus of the nation is drawn to terrorism and affairs across the ocean. With that in mind, former United Nations Ambassador John Bolton is rolling out a new campaign to ensure that all of the 2016 candidates understand what’s at stake and push them to articulate their positions. But rather than leaving it up to the typical, vague talking points which campaigns love to roll out, Bolton is getting down to specifics. (Washington Post)

“You don’t make strategy by throwing a bunch of pick-up sticks on the table and seeing what emerges,” he said in an interview. “Tactics flow deductively from a real strategy. It’s not enough in my view for my candidates to deliver stump speeches written by their expert staffs. It’s not enough to download 50 ‘tough’ talking points and an ‘act natural’ algorithm.” 

Bolton, one of the few national Republican figures to pass on a 2016 bid, is kicking off a six-figure ad campaign, starting online to introduce a “Bolton Test” to the 2016 race — even though he really doesn’t want the debate to be about him. “I’m a policy wonk, not a PR person, but I acknowledge in a PR battle here,” he said. “My op-ed average is one a week. I’ve got appearances on Fox News God knows how many times per month. What I’m interested in is less affecting the candidates than affecting the discussion.”

Hopefully we’ll be seeing all of the candidates weighing in on “The Bolton Test.” This is one of the more concise sets of questions on foreign policy you’re going to run across and is fairly typical of Bolton’s style. Here’s a sample:

What is America’s proper place in the world? 

Do the candidates see a strong U.S. international presence as important to international peace and security? Or do they see American power as the cause of tension and conflict? Obama believes that America should apologize for its past foreign policies. 

What are the primary threats and opportunities America faces abroad? 

President Obama’s weakness encourages our enemies. We face threats from aggressive Russian and Chinese behavior, weapons of mass destruction and international terrorism. Candidates need to do more than answer questions with memorized talking points. They need the intellect and character to detect, analyze, and respond to threats and opportunities. 

How should America respond to those threats and opportunities?

Blaming Obama’s failures isn’t enough. We must restore the confidence of our allies while showing we are ready to protect our interests. How do the presidential candidates propose to do this? Unclear answers are not enough. For example, do the candidates understand the urgent need to restore our national missile defense system? After the Iran deal and years of ignoring North Korea’s nuclear threat, we are not prepared.

Nothing hyperbolic and completely lacking in inflammatory rhetoric. It’s a Just the Facts, Ma’am approach. And that’s pretty typical of Bolton. Last winter, when he was still mulling over the idea of running for president himself, the Ambassador gave us an interview where he expressed many of these same concerns. He’s a very focused guy, but he’s still got an interesting sense of humor. When he’s evaluating the current crop of candidates I have to wonder if he’ll be checking to see how many of them went to Yale Law. During our interview he dropped in the following gem:

“Everybody at Yale Law School thinks that they can become president and should become president if only the peasants would agree.”– John Bolton

Not too much to pick from in the current crop. Carson went to Yale, but it was the medical school. George Pataki studied History there but he went on to Columbia for his J.D. On the Democrat side, of course, Hillary Clinton went to Yale during the same era as Bolton, though they were not friends. (He talks about that in the interview.) Clearly both she, her husband and Bolton all had thoughts of moving into the Oval Office so… who knows? Perhaps there’s something to his theory.

The Stench of Freddie Mac Is Back -- An $18 Billion Spree Of Crony Capitalist Thievery

Shared by Col Mike walker, USMC (retired)

The Stench of Freddie Mac Is Back -- An $18 Billion Spree Of Crony Capitalist Thievery

 

By David Stockman, Former White House OMB Director and Congressman

 

Washington’s capacity to foster crony capitalist larceny and corruption never ceases to amaze. But according to the Bloomberg story below, Wall Street’s shameless thievery from US taxpayers is about to get a whole new definition.

 

To wit, Freddie Mac is handing three private equity billionaires deeply subsidized debt financing in order to undertake $18 billion in rental apartment deals. According to no less an authority than Morgan Stanley, the subsidy embedded in this cheap financing amounts to 150 basis points or roughly $150 million per year on the loan amounts in play.

 

Yet this largesse will serve no discernible public purpose whatsoever. Indeed, over the 10-year term of these loans the bonanza will amount to billions, but it will not generate a single new unit of housing. Nor will it provide a single dollar of incremental rent relief to any low or moderate income tenant.

 

That’s because the purpose of these giant loans is not to fund new construction of rental housing—– for which there is currently an arguable shortage. And it’s not even to incentivize owners to convert existing apartment buildings to so-called “affordable” housing.

 

Instead, its sole effect will be to put the taxpayers in the business of highly leveraged Wall Street deal making. That is, it will fund what amounts to apartment company LBOs being undertaken by the largest players in the private equity world including Barry Sternlicht's Starwood Capital Group, Steve Schwarzman's Blackstone Group and John Grayken’s Lone Star Fund.

 

Each of these cats are billionaires many times over and their remit most definitely does not include bolstering the social safety net. What they are doing is buying giant apartment companies in high priced takeover deals. These LBOs will shower sellers and speculators with windfall gains, and Wall Street dealers and themselves with prodigious fees now and the prospect of pocketing double, triple or quadruple their modest cash equity investments not too far down the road.

 

Freddie Mac, of course, is the one and same crony capitalist monstrosity that helped push the US financial system to the brink in 2008. If Washington had any common sense and gumption at all, it would have taken it out back and shot it years ago.

 

But the K-Street lobbies kept it alive during the dark days after the crash and have now invented a new mission to purportedly facilitate affordable rental housing. But that’s a crock, and the true purpose could not be more blatantly obvious than in the three deals described in the Bloomberg article.

Thus, Freddie Mac will loan the Lone Star Fund $5 billion to finance an LBO of Home Properties. Folks, the latter is a rental housing REIT that is publicly traded, more than adequately financed and in no need of help from the nation’s taxpayers whatsoever. In fact, it already has about $2.4 billion of plain old market debt.

 

But it can be well and truly said that the punters and hedge funds which own the stock have made out like bandits. Its share price has tripled since the March 2009 bottom, but more importantly, was up by 35% just in the 18-months prior to the June 2015 LBO announcement.

 

Did Home Properties earnings take-off in the last year or so, thereby warranting the stock price surge shown above?

 

No they didn’t. 

 

During the 12-months ended in June 2015, Home Properties earned $177 million or 4% less than the $185 million of net income it posted two years earlier for the June 2013 LTM.

 

So here is what was accomplished by putting US taxpayers in harms’ way in this instance.

 

A rental housing REIT with more than 100 communities and 40,000 apartment units, and which currently is comprised of about 30% “affordable” units under Freddie Mac’s elastic definitions, has been shuffled from public to private ownership.

 

The transaction was accomplished at the bubble era price of 25X net income—–a vastly inflated valuation which had been reached in June and which reflected the fact that the fast money boys had earlier piled on for the rumored takeover ride.

Yet without Freddie Mac’s funding of the takeout at this absurdly inflated price, the arbs and speculators who sold their stock into the recently completed deal would not have had a snowball’s chance of retaining their winnings.

 

That’s some public policy accomplishment, and its all there is.

 

Its proud new billionaire owner won’t be required to add a single additional unit of so-called “affordable” housing, and that term doesn’t mean much anyway. Freddie Mac’s definition includes about 60% of US households!

 

Well, there is one aspect which has changed, and not in a good way. What was a public REIT with $4.4 billion of equity market cap and $2.4 billion of debt has become a private LBO with $5 billion of debt and a deal fee tab in the order of $300 million.

 

As to the latter, it was some kind of Wall Street feast. Yet all of the deal commotion implied by this listing amounted to dead weight cost to society. This pointless LBO deal never would have happened on the free market:

 

BofA Merrill Lynch acted as financial advisor to Home Properties. BofA Merrill Lynch and Houlihan Lokey provided fairness opinions to the Home Properties Board of Directors in connection with the transaction. Goldman, Sachs & Co. acted as exclusive financial advisor to Lone Star. Hogan Lovells US LLP acted as legal advisor to Home Properties. Gibson, Dunn & Crutcher LLP acted as corporate legal advisor, Hunton & Williams LLP acted as real estate legal advisor, and Skadden, Arps, Slate, Meagher & Flom LLP acted as tax legal advisors to Lone Star Funds. Sidley Austin LLP acted as legal advisor to BofA Merrill Lynch, and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor to Goldman, Sachs & Co.

 

In other words, the fools in Washington have descended so far down the rabbit hole of “help for housing” that they have managed to double the debt on these 40,000 rental units in order to cash out public equity investors who had no claim whatsoever to taxpayer support. Oh, yes, and to pay enormous fees to the deal banker, Goldman Sachs, which by all rights should be paying back taxpayers for its 2008 bailout, not scalping them yet again.

 

But when it comes to lunacy in the rabbit hole nothing comes close to another deal mentioned in the article—— the $5.3 billion LBO of Stuyvesant Town-Peter Cooper Village by Blackstone. It appears that Freddie Mac will provide $2.5 billion of the takeover financing, meaning the annual subsidy will be in the order of $40 million.

 

Let’s be clear about “Stuy Town” as its called. It has absolutely nothing to do with poor people or any plausible notion of a social safety net. It is a monster housing complex on the lower east side of New York which encompasses 80 acres, 11,000 apartment units and upwards of 35,000 middle class inhabitants—–a good sized city in most of America.

 

It also happens to be ground zero for one of the more spectacular housing debt crashes last time around. It had been a $5.4 billion leveraged buyout in 2006 by Tishman Speyer and a BlackRock fund. The deal predicate was that this legendary rent-controlled complex originally built by MetLife for returning servicemen after WWII would slowly return to free market pricing as grandfathered tenants passed away or moved on.

 

But the Greenspan credit bubble expired before the rent-protected tenants did or before mysteriously failing heating, plumbing and electrical services could induce enough of the remaining rent-protected tenants to move along on their own two feet in order to make the pro forma financials work.

 

Not surprisingly, the deal blew sky high during the financial crisis and resulted in billions of losses for the mortgage lenders. For the past five years it has been operated by a consortium of creditors whose foolish investments in this fiasco deserved no quarter whatsoever from the nation’s hard-pressed taxpayers.

 

Indeed, as time passed the creditors consortium had become desperate to find a mullet stupid enough to buy them out at a premium to their written down loan values, but the going was exceedingly tough. After all, the giant complex was still financially radioactive after upwards of $3.5 billion of losses from the 2006 LBO.

Moreover, additional headwinds arose from the fact that Stuy Town is a perennial object of local politicians demagogueing on behalf of “affordable” housing.

Then again that’s why we have oily politicians like Senator Chuck Schumer. As a real estate industry publication described it:

 

Their proposal was almost the exact opposite of Tishman Speyer's 2006 bid: They would take on little debt and keep the apartments as rentals, eyeing steady returns instead of swift profits. And they deemed it essential to win over the city, tenants and local politicians -- perhaps in part to New York's senior senator, Chuck Schumer.

 

At a tenant meeting at Stuy Town last week, Schumer said the Tishman Speyer saga had taught him the need for "outside leverage." "And I found a way," he added. "I realized that to get such a huge mortgage, you need the backing of Freddie Mac and Fannie Mae.

 

So here is what’s going to happen. The busted lenders to the 2006 deal are going to make a killing by getting $5.3 billion for positions which are not remotely worth that.

 

At the same time, Blackstone will get subsidized financing from Freddie Mac, $225 million worth of benefits from New York City through an additional loan and uncollected taxes and the rights to sell the complex’s 700,000 square feet of air rights, which could be worth hundreds of millions.

 

Why all this largesse?

 

At the end of the day it will mean that a mere 500 units out of the 11,000 will be reserved for families making no more than $62,000 per year, and another 4,500 for families making up to $128,000 per year.

 

That’s right. The taxpayers of America are being dragged into a $5 billion LBO on the very site where an identical one blew up less than seven years ago—–purportedly to help families that are in the top 10% of income earners in the nation.

 

Needless to say, there is a simple alternative. Abolish Freddie Mac, Fannie Mae and all the rest of the Washington’s crony capitalist machinery and turn housing finance over to the free market where it belongs.

 

If there are citizens in need who can pass a means test and can’t work owing to age or genuine disability give them cash to fund their own shelter choices. And if they are able bodied and willing to work, top up their wages with earned income tax credits or similar cash transfers.

 

But let’s stop being stupid. Blackstone is not the United Way.

SHELL-SHOCKED BY PC WORLD

SHELL-SHOCKED BY PC WORLD, UNIVERSITY OF MISSOURI PRESIDENT STEPS DOWN

Paul Mirengoff, Powerline

University of Missouri president Tim Wolfe resigned yesterday after the school’s football team threatened to go on strike. The threatened strike was in support of student protests over alleged “systematic oppression” of blacks at the school.

As at Yale, I have seen no reports of violence directed at any African-American at the University of Missouri. The “systematic oppression” appears to consist of a few incidents of racial slurs directed at a couple of black students (as I understand it, the main offender who was identified, a drunken student, was removed from campus pending formal disciplinary action).

Approximately 35,000 students attend the University’s Columbia campus. How can the University guarantee that no student will ever utter a racial slur?

Rich Lowry argues that the black students are really complaining about not being sufficiently coddled. I haven’t been on campus, but Lowry’s claim finds support in complaints like this one from the Student Association: “In the months [following the Michael Brown shooting], our students were left stranded, forced to face an increase in tension and inequality with no systemic support.”

Why the shooting of a thug who attacked a police officer required the University of Missouri to provide “systemic support” to students is unclear. What was the University supposed to do, postpone exams?

The Student Association also declared:

The academic careers of our students are suffering. The mental health of our campus is under constant attack. Our students are being ignored. We have asked the University to create spaces of healing and it failed to do so.

Translation: coddle us. Oh, and President Wolfe, give us a handwritten apology that acknowledges your “white privilege.”

Concluding that it was no privilege to preside over the infantile, Wolfe resigned.

He never stood a chance in the deranged environment of the politically correct modern university. Unlike so many college presidents, Wolfe made his bones in the real world.

According to his Wikipedia page, Wolfe began his career as a sales rep for IBM in 1980. He worked his way up the industry ladder, becoming president of Novell Americas in 2007. It’s unlikely that anyone demanded coddling from Wolfe during his corporate career.

Wolfe was named president of the University of Missouri in 2011. I imagine that he saw his mission more as maintaining the financial viability of the institution than as promoting “the mental health of [the] campus,” which he probably assumed was okay. Little did he know.

With his resignation, Wolfe can enjoy a return to the sane world, the football players can get on with the business of losing football games (the team is 1-5 in SEC play), and the University can find a spineless career administration who will hire minority counselors to provide “systemic support” to the fragile and the hysterical.

However, the mental health of the campus seems beyond repair.

Carson, West Point and the Media

Carson, West Point and the Media

Col Mike Walker, USMC (retired)

All,

Ben Carson averred he had been offered a free ride to West Point when looking to go to college.

He was a teenager and exceptionally qualified student, one that the “best of the best” colleges and universities would seek out.

He had also joined JROTC in high school, making it inevitable that someone talked to him about going to West Point. 

He also wanted to be a doctor and ROTC and West Point at that time did NOT allow cadets to graduate and go directly to medical school so Dr. Carson never seriously pursued entry into West Point.

Given his age and low interest (he admitted a number of times over the last decade or so that he never formally applied), it is completely believable that he never mastered the specific application process.

He simply recalled that he was told he was a shoe-in, a lock, it was a done deal, if he applied. Given his background and resume that is absolutely correct. 

The Marine Corps, in which I served as an officer, has no academy but the Officer Selection Officers who recruit Marine officers would have crawled naked over broken glass to get Ben Carson to sign up.

Carson may not have total recall but he accurately presented reality.

So what about the journalists who wrote the story? 

They are professional investigators yet they got the facts wrong. They, like teenaged Carson, also miscommunicated the complex admission process to West Point and committed other errors.

So who is being either dishonest, incompetent or both?

It is not Carson. In looking closely at the retelling of a brief event from his late teenage years, everything Dr. Carson says rings true.

How about the professional investigators? 

They blew this story and were clearly either dishonest, incompetent or both.

What does it mean?

Over the decades, news reporters have gone from purveyors of the facts to advocates. They start with a preconceived answer and then cherry pick, ignore, and twist the facts to fit their narrative even when it is patently false.

That is what happened here.

Semper Fi,

Mike

TIPTOEING (Past the Graveyard of Formerly Free Speech)

THOUGHTS FROM THE AMMO LINE
Scott Johnson, Powerline

Ammo Grrrll goes TIPTOEING (Past the Graveyard of Formerly Free Speech):

Way back in my misguided leftist days in San Francisco, I knew two families with wildly-varying child-raising philosophies. One couple had a lively little boy who ran barefoot in damp, chilly, meeting halls that exhibited the same standards of hygiene as many radicals did personally. He ate hot dogs, chips and candy, some picked up off dirty floors. He was bright and energetic and never sick.

Another couple had a little girl who was a hothouse flower. She was fed organic baby food and kept far far from other ragamuffin children and any adult with even a sniffle. As anyone who knows anything about immunity would guess, she was sick most of the time.
My mother was a clean freak of the first order, but her sister (of blessed memory) bordered on the insane on the subject. She boiled her children’s Monopoly pieces and tried to put the board in the oven to sterilize it. (That didn’t work out.) Her kids (my cousins) couldn’t play in a sandbox. Every letter we ever got from them mentioned one or more of the kids being down with the flu.

When I was a young mother, I tried to chart a kind of middle course. I had learned by that time from observing others’ experiences, that it was a yuge mistake to tiptoe around when the baby was napping, whispering to everyone, “Shhhh…the baby’s asleep.” Consequently, our son learned to sleep through piledrivers on the street outside his bedroom and knock-down/drag-out (or more accurately, drag queen) fights coming from the apartment above us. That flat was occupied by two large, high-strung gay men. I gathered from the shrieking, this was not a monogamous couple, yet at least one person was not on board with that, or as the saying goes, “comfortable” with it. They may have been gay, but they still fought like men. It often sounded like a saloon fight choreographed by John Wayne.

A couple weeks ago, I opined on the horrendous damage to our language and our freedom by the cossetted SJWs and Pajama Boys who are allowed to have speakers disinvited, CEOs fired, and entire subjects closed because they feel “unsafe.” Everyone around them is forced to respond to “microaggressions,” a meaningless synonym for “nothing.”

The damage to our Republic by caving to this utter nonsense is hard to calculate. But what about the damage to the shrinking little violets themselves? I am totally serious. What happens to those around whom people are forced to tiptoe?

I know for a fact that if you always tiptoe around an infant, she will never sleep through a night and will startle at the drop of a pin. She will be anxious and fearful.

Life, my dear friends and readers, is very, very tough. Nobody escapes unscathed. I am not talking here about the extraordinary courage necessary to storm the beaches of Normandy, go house to house in Fallujah, or raise a flag at Iwo Jima. I am talking about ordinary life. If you can’t stand to have a speaker on campus with whom you disagree – for a speech you aren’t even going to attend! – you are going to fold like a cheap card table at the first sign of any real trouble. How are you going to survive a layoff? Where will you find the strength to take chemo? How are you going to deal with the sudden death of a spouse, the incomparable pain of the loss of a child, the very real possibility of some day ending up with a serious disability?

We pamper our children at their peril. It’s tantamount to denying them vaccinations to shield them from all adversity, challenges, and differences of opinion.

Not even to mention the peril to a legal system wherein the standard for a tort has traditionally been something that would be offensive to someone “not unusually sensitive” when EVERYONE is “unusually sensitive” and must be catered to.