If there were any way to create sympathy for Rick Perry on pure humanitarian grounds, his appearance on CNBC this morning achieved it.

Perry, who was in a remote location(for good reason) and stood in soft focus in front of the American flag was incoherent, uninformed, unprepared and rambling. If Perry actually does have a near average native intelligence, his handlers have so bound him up that he looks like a confused post brain-surgery patient.

According to Matthew Dowd we have a "hot" electorate and the "temperature" of candidates is important. Especially in the Tea Party dominated Republican party, "Passion" is the watchword. "Cool" Presidential contenders just don't cut it. Republicans think the time is right. They see a chance to throw Obama out of the Lincoln bedroom but on the other hand they don't want to end up getting it on with the Manchurian candidate.

So far I think each of the Republican presidential contenders have given the Republican base voters good reason to let the moment pass, change their front door locks, and sign up for another dating service. 

Take Herb Cain, as Palin called him, "the flavor of the week". His staying power is at issue. But frankly any guy who thinks he's going to get laid after giving his date pizza for dinner is a loser whether or not he owns the pizza company. Stop him at the door.

Despite Perry's poor debate performances and his current whipping boy status among Republican pundits as well as Fox News, I am not one who thinks this guy is out of the running for winning the Republican Primary. 

Perry's handlers made the choice to start Perry the Pitcher in a Playoff series his first week out of the minors and he has lost his first three games. It's of course 20/20 hindsight but his handlers should not have made him the immediate target of the other "contenders" but should have had him play nice with the others for a while and stick to attacking Obama until he got used to the national stage. Maybe they suspected such attacks on Perry's vulnerabilities and concluded that the Alpha Male ploy was the best shot. He certainly throws his chest out and bends his knees appropriately. 

I think Obama may be looking for a stimulus and jobs deal with Congress in the wrong places. While parts of the jobs bill may be passed, time is being lost and the continuing acrimony is making the economy weaker. The Tea Party is attempting to bring down both Obama and establishment Republicans with a no compromise strategy aimed at killing confidence and destroying the rest of an already weak economy. Obama's strategy to either get cooperation from Congress or run against a "do nothing" Congress may work, but it is not the best strategy.

The essence of the economic crisis is a banking crisis. The essence of the banking crisis is housing and mortgage finance. The answer to the economic crisis is to fix housing--both in terms of working through excess inventory and foreclosures, and to allow a broad spectrum of homeowners to refinance their current mortgages to lower rates. Geithner's policies have done little to address housing. Hamp and Harp have been ineffective because of bank resistance and self defeating regulations.

Normally I only watch CNBC with the sound turned off but this morning I forgot to turn the volume down and Nelson was being interviewed. I say "Nelson" because the little capitalists were "stroking" Nelson shamelessly, he warmly responded to their cues and as I do with T.V. characters like "Dexter" and "Roger Sterling" I began to think of "Nelson" as a friend. I felt so much at one with Nelson and his worship of capitalism that I overcooked my oatmeal and then spilled my skim milk.

About breakfast--Nelson is a noted investor in "food" and runs the Trian Fund. He has doubled and trebled his wealth by investing variously in Wendy's, Arby's, Snapple, Cadbury, and most notably in this morning's money-orgy discussion, the Kraft foods company. I must admit I felt a momentary lapse in my adoration for Nelson because all the food "brands" I just mentioned I wouldn't touch with a ten foot pole, and count part of my longevity to having avoided consuming such "brands". (Of course, that's just my opinion and not the opinion of the management of this site.)

Shortly before Obama's jobs speech I posted that it should include a Mortgage Refinancing program. What actually happened was a 15 second reference in the speech to working with the FHFA to facilitate more refinancing. The next day a CBO report, a generic study of refinance obviously on-going before O's speech, underwhelmed the entire idea of Refinance, particularly in scope and possible stimulative effect. Others stated in the Senate Housing Subcommittee hearing two days ago that the CBO's "take-up" estimates of 2.9 million borrowers were far too conservative.

The fact is that the existing stakeholders in the mortgage mess constitute a circular firing squad, each entity trying to maximize its own agenda against the interests of others. Until a consensus is formed which balances all of the interests, including tax payers and borrowers, any movement in mortgage refinance is going to be limited. Leadership from Obama is essential, but so also is action from Congress. Here are some of the stakeholders, their positions and some other facts.  

Richard Fisher is the President of the Dallas Fed and I would like to have overheard his personal reactions to Ponzi Perry's physical threat against the mild mannered Fed Chairman, Ben Bernanke. It seems that Ponzi and the Tea Party just love to beat up on the Fed, particularly, QE2. Actually, Richard Fisher doesn't care much for QE2. And as a Dissenter at the the Fed's FOMC meeting in August, Richard Fisher has become an instant hero of tea baggers who have positioned him as a rough riding adversary of Uncle Ben and the librul FOMC.

Before the shot clock rules took effect in the NBA and Collegiate basketball, the practice of "freezing the ball" was used to sit on a lead in the last minutes of the game. I don't think there was anything more frustrating than the losing team being unable to get their hands on the ball. It seemed somehow unfair, un-American, even.

I thought one of the most effective lines in Obama's speech was the one, "We've got 14 months to go. The American people can't wait for 14 months".

If the Republicans stonewall Obama's efforts to increase hiring and to help those who are unemployed I think they are taking a huge risk. Fourteen months is a long time to try and freeze the ball. Think about how much time 14 months is. For example, the NFL just started. This season will end and we'll be in week eight of the next NFL season in 14 months. Think about that, Republicans!

I doubt if anyone would argue that a world wide asset bubble created the financial crisis, the worst component of which was residential mortgage abuse.

Inferior and fraudulent RMBS's and bad servicer practices were the essential problem of the economy in 2009 and remain so today. The banks have an incentive to foreclose instead of modify loans, but consumers have learned how to fight foreclosures. When foreclosure inventory is still overhanging the market, consumers are smart enough to know we haven't hit bottom on prices, so they hold off on purchases. Loan modifications haven't worked very well, but the issue goes back to bank incentives, not to mention continued fraudulent practices.

The lack of a housing industry rebound is the single biggest factor in high unemployment. No less than Buffet has said that when new housing starts get up into the range of a million units a year, unemployment will drop to 7%. The log jam in foreclosures and the disincentives of banks to modify loans are helping to keep the economy in limbo.

(or perhaps, the reverse?)

Why the suits and huge potential fines? The timing pertained to a statute of limitations. But is there a subplot relating to a refinancing program?

The FHFA bank suit is aimed at 17 banks and recovering nearly $160B in losses based upon banks' faulty originating, securitizing and servicing of RMBSs. Because of these abuses, the tax payer had to bail out the GSEs. This is payback time.

It is being reported that the Fannie and Freddie conservator known as FHFA will sue B of A and about 10 other banks for losses stemming from improper origination and servicing of loans. Goldman, JPM, Deutshe Bank and others are expected to be included. The FHFA has a deadline of next Tuesday to file the suits. The deadline is a statute of limitations provision in the formation of FHFA itself on Sept 7, 2008. FHFA was given six years to bring actions under Contract law and three years for tort claims.

There is a tangled web of litigation against B of A/Countrywide which preceded the FDIC's decision to intervene in a $8.5B settlement between B of A and a group of 22 "investors" in MBS's securitized by Countrywide.

In February a group of investors (known as Walnut Place) in Countrywide MBSs (three MBS trusts) filed an action against BNY Mellon - who is the Trustee. The action is meant to force the Trustee to sue Countrywide to take back the non performing MBS's. The case was assigned to Judge Kapnick in the New York Supreme Court.

On June 29, an $8.5B Settlement between B of A /CW and 22 large investors, engineered by BNY Mellon, was announced; simultaneously BNY Mellon filed a petition with the NYSSC to approve the settlement. The 22 investors represent less than 51% of all the investors in the subject 530 trusts. The  petition was filed under Article 77 for the purpose of trying to make the settlement binding on all the investors in a total of 530 trusts, including those in the 3 trusts at issue in the  Walnut Place filing. BNYM requested Judge Kapnick to be assigned, under the premise that Walnut Place's prior filing re three trusts would be adjudicated under the overall $8.5B settlement for all 530 trusts.

Buffet is swimming in more Bank of America cross currents than an ocean salmon fighting his way up the Rogue River to spawn.

Buffet's announcement today of a $5B investment in preferred shares of BOA is a monumental event in a raucous day on the stock market. Despite the gyrations today, partly on European news and party positioning for Bernanke's speech tomorrow, Buffet's actions should have near term favorable implications for BOA, bank stocks in general, the stock market in general, and as all boats are lifted and affluent consumers step up to the Christmas season, the re-election of Obama--and the pressures on Ben Bernanke.

Rick Perry has just warned Federal Reserve chief Ben Bernanke not to come to Texas because "we would treat him pretty ugly".

Economics Professor Nouriel Roubini tweeted: "This Texas thug is making murder threats on the Fed Chairman."

I wonder what the good Republicans think of Perry's threat? It's an ugly threat. The 2012 election is only going to get worse. Will good Republicans, in the name of a 3% tax hike, help put Perry in the White House. Or will some of them say enough is enough!