Taking a Side
It's official — two of the Gramm-Leach-Bliley Act's three namesakes are backing Sen. John McCain for president.Given that all three former lawmakers — Phil Gramm, Jim Leach, and Thomas Bliley — were Republicans, the surprise was that one of them, Mr. Leach, said last week that he was supporting Sen. Barack Obama.
Mr. Leach, who chaired the House Banking Committee for six years, helped launch the group Republicans for Obama and said the Illinois Democrat's bipartisan appeal and his views on foreign policy would help the country.
"I'm convinced that the national interest demands a new approach to our interaction with the world," Mr. Leach said, according to published reports.
He made his comments the same week Mr. Gramm returned to the news.
The Texas Republican had stepped down as a top adviser to Sen. McCain's campaign after saying that economic problems were overblown, and that the United States had become a "nation of whiners." But ABC News reported last week that Mr. Gramm had been spotted in Aspen, Colo., in the front row at an event supporting Sen. McCain.
The Obama campaign seized on the appearance to argue that Mr. Gramm was once again advising the Arizona lawmaker.
It also raised the question — at least to us — of whom Mr. Bliley was supporting. In a brief e-mail exchange, he said he is "supporting Sen. McCain because he has the experience and leadership the country needs."
Other Republicans involved with financial services have followed Mr. Leach's lead, however. Lincoln Chafee, a former member of the Senate Banking Committee, joined Republicans for Obama.
Sen. Chuck Hagel, R-Neb., who is still a member of the banking panel, has not endorsed a presidential candidate, but he has been rumored to be a possible vice presidential pick for Sen. Obama and toured with the Democratic lawmaker during a visit to Iraq last month.
You're Rescued
The latest strategy for avoiding foreclosure has nothing to do with freezes, modifications, or Hope Now. Just have The Donald bail you out.Donald Trump, the billionaire real estate tycoon, has agreed to buy Ed McMahon's Beverly Hills home and lease it back to him, preventing the former Star Search judge and longtime Johnny Carson sidekick from losing it in foreclosure.
Mr. Trump told the Los Angeles Times in an interview last week that he has a soft spot for Mr. McMahon, 85. "I don't know the man, but I grew up watching him on TV. I'd watch him every night. How could this happen?"
The price has not been disclosed, but it was reported in June that Mr. McMahon was $644,000 behind on payments on $4.8 million of mortgages held by ReconTrust, a division of Countrywide Financial Corp., which filed a notice of default in February. (Bank of America Corp. bought Countrywide last month.)
Out of Retirement?
He has been gone from the Federal Reserve Board for more than two years, but for former Chairman Alan Greenspan, letting go is clearly hard.With his reputation being battered by the housing bust, Mr. Greenspan has begun a media blitz of sorts, giving interviews to The Wall Street Journal and Financial Times. And excerpts of a new epilogue to his book "The Age of Turbulence" conveniently wound up in the hands of The Economist.
In his interview with the Journal, he summed up his views of the government backstop for Fannie Mae and Freddie Mac in one word: "bad."
The government "should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted — with necessary taxpayer support to make them financially viable — as five or 10 individual, privately held units," he said.
Fed Chairman Ben Bernanke has said the central bank should serve as a systemic risk regulator, but Mr. Greenspan is pushing instead for a panel that could take over systemically important banks, according to the book excerpt obtained by The Economist.
"We need laws that specify and limit the conditions for bailouts, rather than circuitously through the central bank, as was done during the blowup of Bear Stearns," he wrote, according to the magazine. "Our country has long since abandoned the notion that we should leave crises to be resolved solely by the marketplace. The critical need … is to formalize … the procedures improvised in the case of Bear Stearns."
