Monday, August 18, 2008

Pakistan's Players Prime The Pump

Time to shift gears from the Veepstakes, Ossetia, and Fannie Mae and look at today's other big story which may be far more important in the long run...Pakistan's Pervez Musharraf has stepped down from the post of President rather than face impeachment.
Facing imminent impeachment charges, President Pervez Musharraf announced his resignation on Monday, after months of belated recognition by American officials that he had become a waning asset in the campaign against terrorism.

The decision removes from Pakistan’s political stage the leader who for nearly nine years served as one of the United States’ most important — and ultimately unreliable — allies. And it now leaves American officials to deal with a new, elected coalition that has so far proven itself to be unwilling or incapable of confronting an expanding Taliban insurgency determined to topple the government.

“Whether I win or lose the impeachment, the nation will lose,” Mr. Musharraf said, explaining his decision in an emotional televised speech lasting more than an hour. He will stay in Pakistan and will not be put on trial, government officials said.

The question of who will succeed Mr. Musharraf is certain to unleash intense wrangling between the two rival political parties who form the governing coalition and to add a new layer of turbulence to an already unstable nuclear-armed nation of 165 million people.

“We’ve said for years that Musharraf is our best bet, and my fear is that we are about to discover how true that was,” one senior Bush administration official said, acknowledging that the United States had stuck with Mr. Musharraf for too long and developed few other relationships in Pakistan to fall back on.

Much like Saddam Hussein in the 80's and our string of Iraqi leaders currently, Pervez Musharraf was a necessary evil. He was the devil you knew in a Muslim country in the Middle East that had nuclear weapons. The fate of Pakistan is now up for grabs...and when anyone says that the fate of Pakistan is in the balance, they are talking about Pakistan's nuclear weapons. Keep that in the back of your mind.

So what now? As the NY Times reports, we don't know a whole lot of other folks in Pakistan and the government there was basically united on the fact everybody hated Pervez Musharraf. He's gone now. Now the real fun begins. Saeed Shah at McClatchy News has more.

The Bush administration, which since 9/11 has based its Pakistan policy largely on Musharraf, now must chart a different course at a time when the Islamic insurgencies in Pakistan and neighboring Afghanistan, economic unrest in Pakistan and tensions with Pakistan's arch-foe India are all on the rise.

Despite the administration's bet on Musharraf, Islamabad's role in the war on terror has been ambivalent at best, with evidence that members of the country's security and intelligence forces have been secretly backing Taliban militants. The Army decides the country's policy toward its tribal areas, which border Afghanistan and have become a refuge for Taliban and al Qaida militants, and its broader security policies.

"If this continues, I strongly suspect that Pakistan will move from the ally category to the foe category," said Christine Fair, a senior political scientist at the RAND Corp, a private U.S. research organization. "The impeachment (threat) is a very necessary step to restoring the constitution and getting civilian control over the military."

In Washington, President Bush heaped praise on Musharraf Monday but was quick to underline his commitment to the new government.

"President Bush appreciates President Musharraf's efforts in the democratic transition of Pakistan, as well as his commitment to fighting al Qaida and extremist groups," said White House spokesman Gordon Johndroe. "We're confident that we will maintain a good relationship with the government of Pakistan."

While the prospect of impeaching Musharraf brought the country's largely dysfunctional civilian coalition together, analysts said there now could be a tussle over who'd succeed Musharraf as president and whether judges he fired would be restored. Nawaz Sharif of the Pakistan Muslim League-N wants the judiciary reinstated, but Asif Zardari, the leader of the rival Pakistan People's Party, is thought to remain reticent.

"There's no stable settlement. These two guys (Sharif and Zardari) will now start slugging it out," said Najam Sethi, editor of Pakistan's Daily Times newspaper. "The political interests of the two are diametrically opposed."

Got that? There's five major players in Pakistan now that Musharraf is gone:

  1. Asif Zardari, Benazir Bhutto's widower, and his party, the Pakistan People's Party (PPP). Zardari is clever, charismatic, and the PPP is in charge for now based on the outpouring of grief and rage at Benazir Bhutto's assassination, they took a large chunk of parlimentary seats in February. With that, they were able to put in place their man, Yousef Raza Gilani, as Pakistan's new Prime Minister. But they don't have enough to run the country alone without...
  2. Nawaz Sharif, and his party, the Pakistan Muslim League-N (PML-N). Sharif is a former two-time Prime Minister of Pakistan and is very popular among the country's religious groups of Sunnis (Pakistan is a majority Sunni Muslim country.) Both Zardari and Sharif hated Musharraf...and both wanted him gone so they could run the place themselves. The PML-N's big cause is getting Pakistan's Supreme Court judges reinstated after they were stripped of power by Musharraf several months ago. Zardari and the PPP have been dragging their feet on this, and Sharif is playing it up for all it is worth. But neither one wants to cross...
  3. The Pakistani Army, currently led by General Ashfaq Parvez Kayani. They've got the guns, bombs, and tanks, and the army has ruled Pakistan for fully half its existence. They have a long and storied tradition of ruling the country with an iron fist, and without the Army's support, nobody in Pakistan makes it long. Gen. Kayani is Musharraf's hand-picked successor, but not even he was able to save Musharraf's hide when the call for impeachment came earlier this month. Gen. Kayani's agreement to go along with Musharraf's impeachment was the signal that Musharraf was done. And General Kayani gets to be the big boy with the big toys in town. But even he treads lightly around...
  4. The Pakistani military intelligence service, the Inter-Services Intelligence (ISI). The ISI is, not to put a fine point on it, crooked as hell. They make the CIA look like nice, upstanding Rotarians. Prime Minister Gilani order their control transferred from the Army to the Prime Minister's directorate. The ISI told Gilani to go fuck himself, and Gilani agreed to put them back, sort of. The real problem with the ISI is that they basically support terrorists, and they run all kinds of black bag jobs to assist Islamic terror organizations. It's the worst kept secret since, well, the CIA in Vietnam, but they get away with it anyhow. It's mainly disconcerting because they are big supporters of...
  5. You guessed it, our old friends in Al Qaeda. The remote tribal regions of Pakistan that border Afghanistan, the North Waziristan area, is prime terrorist real estate. Osama and his buddies are rumored to be hiding out here along with whatever evil plans they are hatching, and the locals and the ridiculously moon-like terrain make it impossible for anyone to really go in there and clean the place most of Pakistan would go into open revolt if anyone tried. Remember, AQ is a Sunni organization, and Pakistan is roughly 80% Sunni. He's a hero to the locals. The Paks cut a peace deal with the tribal leaders, and that basically pissed off everyone...but Musharraf had no choice.

Now that Musharraf's gone, what happens in Waziristan? Who will be elected President now? What will the army do and which candidate will they support? Will the government even last without the common enemy in Musharraf?

The nightmare scenario is that Gilani's government falls, the Army and the ISI take over, and they decide delivering Pakistani nukes to Osama and his pals is a good idea. This would be bad...and it's certainly more within the realm of possibility than it was even a few weeks ago. The US is scambling to support the Gilani government and forge a relationship with the PM, because if Gilani goes down, the game is over.

Pray our next President has a better idea on what to do with Pakistan. Our local strongman is history. Everybody wants his job...and those nuclear weapons. Oh you think India next door is going to just sit by and do nothing should Gilani go down? They have nukes too, you know. They already hate the ISI. You think they'll let the ISI get a hold of Pakistan's arsenal?

Pay attention, folks. More than Iraq, more than Iran, THIS is the real heart of the Warren Terrah. And everyone's got a knife looking to cut it out and claim it for themselves.

Obama's Pick By Wednesday?

Several news outlets are reporting that Obama has made his Veep pick and will be announcing it tomorrow morning or Wednesday.

“As The Ticket previously reported, the campaign says it will make the announcement first via e-mail to supporters who’ve signed up. We’ve had false alarms in both camps already,” the LA Times noted. “They may be accidental. But they also serve a campaign’s purpose of hyping interest and anticipation first among the media and then the voting public.Politico reported earlier this morning that an announcement was expected this week.

“A person familiar with the campaign’s planning noted that Obama’s schedule at the end of this week is open, but said the announcement could come ‘as late as the weekend,’ according to the online newsmagazine. “Obama and his inner circle have held his intentions tightly, while a wider circle of aides in Chicago has been kept far enough out of the loop that they’re willing to speculate freely on the possible choice.”

“There are plenty of tea leaves to read,” Politico added. “Obama’s schedule this week takes him through the home states of a few possible contenders: He’s spending Monday in New Mexico (Gov. Bill Richardson) and Wednesday in Virginia (Gov. Tim Kaine and former Gov. Mark Warner).”

My gut instinct tells me that if I had to make a choice right now, I'd be betting on Gov. Tim Kaine at this point. We'll of course know soon.

Why Kaine? He can deliver Virginia, Obama would be taking on the GOP machine in the South directly, and Kaine would help Obama in North Carolina and possibly Florida too. However, Kaine himself as recently as this weekend (where he was stumping for Obama) says his selection is not "likely".

On Saturday, Kaine spoke to Obama supporters in Winchester, Leesburg, Manassas and Warrenton, Virginia. Sunday, the governor began his day in Washington, D. C. representing the Obama campaign on "Meet The Press" and rounded out his weekend with a rally and Town Hall in Richmond, where he once served on the City Council and as mayor.

At nearly every stop, Kaine faced questions about his chances of running as Obama's Vice Presidential candidate. In Warrenton, Kaine told the room “It has been really nice to be mentioned, my mom loves it. I never thought it was very likely, for a variety of reasons.”

If he's sandbagging, he's doing a good job.

Then again, the case for New Mexico Governor Bill Richardson is pretty strong as well.

US presidential hopeful Barack Obama was courting the Hispanic vote in New Mexico yesterday amid swirling rumours about his possible choice of running mate.

New Mexico Governor Bill Richardson, who has also been touted as a possible vice-presidential pick for the youthful senator, said he was glad to see the Democratic Party leaving past rivalries behind.

''The point is, the party is united. We're coming together,'' Governor Richardson said yesterday. Senator Obama was ''doing everything'' possible to bring all supporters of his former rival, New York Senator Hillary Clinton, into the fold.

Richardson would all but guarantee a massive Hispanic turnout for the Democratic ticket, and those numbers are going to be very important in swing states, plus it would signal the growing power of the Democrats in the West. Even the GOP would have to tread very carefully on the race issue with an Obama/Richardson ticket...and let's not forget Richardson is a former US Ambassador and highly respected in foreign policy circles.

Then again, Obama may surprise all of us. Again.

Global No-Confidence Vote: Fannie And Freddie Fallout

Things are looking increasingly dim for Fannie Mae and Freddie Mac. Analysts foresee both companies being unable to raise the capital they need to continue sometime in the next 45 days.
Fannie Mae and Freddie Mac tumbled to about 18-year lows in New York trading on concern the government will be forced to bail out the mortgage-finance companies, wiping out common stockholders.

Fannie slid as much as 18 percent, and Freddie fell 19 percent after Barron's said the Bush administration anticipates the government-chartered companies will fail to raise the equity capital they need, prompting the U.S. Treasury to step in. Fannie is down 84 percent this year. Freddie has fallen 86 percent.

``It is very, very likely to happen before the end of the third quarter,'' Ajay Rajadhyaksha, the head of fixed income strategy for Barclays Capital Inc., said in an interview. ``Without government help, we think there is very little chance of Freddie completing a significant capital raising.''

A rescue of the companies, which own or guarantee 42 percent of the $12 trillion in U.S. home loans outstanding, would include preferred stock with a seniority, dividend preference and convertibility that would wipe out common stockholders, Barron's reported, citing an unidentified source in the Bush administration.

Treasury Secretary Henry Paulson, who on July 31 received the unprecedented authority he requested from Congress to help the companies, has said a bailout won't be needed.

``We aren't going to comment on speculation,'' said a Treasury spokeswoman, Jennifer Zuccarelli. ``As the Secretary has said, we have no plans to use these authorities.''

Fannie Mae was down $1.40, or 18 percent, to $6.51, at 12:02 p.m. in New York Stock Exchange composite trading. Freddie fell $1.07, or 18 percent, to $4.78.

The bailout of Fannie and Freddie is coming. It's just a matter of time now. The Fed will have no choice, or $5 trillion in mortgages collapse overnight, wiping out the real estate market, the US economy and the global economy.

Both companies will need to raise as much as $15 billion, Paul Miller, an analyst at Friedman, Billings, Ramsey & Co. in Arlington, Virginia, said earlier this month.

Fannie paid a record high yield in a $3.5 billion sale of three-year benchmark notes last week that drew less demand from Asia, the second-biggest buyer of Fannie's debt and mortgage- backed securities. Asian investors bought 22 percent of the issue, almost half the demand of three months ago and about two- thirds of Asia's usual buying.

Treasury data show that private and government investors in Japan slowed purchases of their debt to $770 million in June, from $4.5 billion a month earlier. China bought $9.6 billion in Fannie Mae and Freddie Mac debt, down from $14.9 billion in May.

There's no choice. With the rest of the world seeing increased effects from global recession, the market for Fannie and Freddie's debt is drying up. They can't afford it anymore...because there's no chance they will be paid back.

Standard & Poor's cut Fannie and Freddie's preferred stock and subordinated debt ratings by three levels last week to A- from AA-. S&P affirmed the companies' AAA senior debt rating, reflecting perceived government support.

A rule that made it harder for investors to bet against Fannie and Freddie's shares also expired last week. The Securities and Exchange Commission on July 21 imposed a temporary order that tightened rules for 19 stocks, including Fannie and Freddie, prohibiting firms from so-called naked short selling, where they sell shares without actually borrowing them.

The cost to protect the subordinated debt of Fannie Mae and Freddie Mac from default climbed to a record. Credit-default swaps on Fannie's subordinated debt increased 18 basis points to 296 basis points, while contracts on Freddie Mac jumped 23 basis points to 300, according to CMA Datavision.

Wall Street is convinced the bailout is happening and happening soon. When it does happen, taxpayers will be out billions...and the Fed is running out of money on its balance sheet to shore up the faltering US economy. The Fed will have to make some tough choices soon about who gets saved and who goes under. Not everyone is Too Big To Fail.
Ben S. Bernanke is still trying to define which financial institutions it's safe to let fail. The longer it takes him to decide, the tougher the decision becomes.

In the year since credit markets seized up, the 54-year- old Federal Reserve chairman has repeatedly expanded the central bank's protective role, turning its balance sheet into a parking lot for Wall Street's hard-to-finance bonds and offering loans through its discount window to investment banks and mortgage firms Fannie Mae and Freddie Mac.

The lack of clearly defined limits may put the Fed's independence at risk as Congress discovers that its $900 billion portfolio can be used for emergency bailouts that might otherwise require politically sensitive appropriations and taxes.

``There is some hard thinking that needs to be done,'' Philadelphia Federal Reserve Bank President Charles Plosser said in an interview last week. ``The Fed has a terrific reputation as a credible institution. We have to be cautious not to undertake things that put that credibility at risk.''

The expanding role of central banks will be the hottest topic in the room when Bernanke addresses his counterparts from around the world at the Kansas City Fed's Jackson Hole, Wyoming, symposium Aug. 22.

Since taking on $29 billion in Bear Stearns Cos. assets to facilitate the failing firm's takeover by JPMorgan Chase & Co., Bernanke has made several moves that imply further expansion of the central bank's mission.

The Fed has already spent more than half of its balance sheet on bailouts so far. Fannie and Freddie would certainly require billions more, and that means other institutions like smaller banks, hedge funds, and insurance companies may be next on the list to bail out...and the Fed may not have the cash. Of course, the financial houses aren't done yet. Goldman Sachs is always a prime target of speculation, but a strong bearish outlook is shared by many involving the very survival of Wachovia and Merrill Lynch.
The year-old financial crisis is not only far from over but could actually get much worse, bringing more big shocks to the US economy and stock market, a host of experts said Monday.

Among the predictions: the failure of some of the country's biggest financial institutions, the collapse of 1,000 banks and a possible government bailout of mortgage giants Fannie Mae and Freddie Mac .

"I think the financial problem is halfway through the cycle," David Kotok, chairman and chief investment officer from Cumberland Advisors, told CNBC. "There's another shoe to drop ahead of us and it could be more severe."

Kotok thinks Merrill Lynch , Wachovia and other financial companies are at risk of failure as the cost of raising capital soars at a time when the banks need to pay settlements over auction rate securities.

The cash companies need to shore up bad investments, "is up to about $50 billion and will probably top $100 billion before it's over," he added.

"Those firms—Merrill, Wachovia and others—are going to have to raise that cash," he said. "They are either going to have to get it from the Federal Reserve, through some direct or indirect means, which means more leverage, more Fed balance sheet, more regularly oversight or they're going to have to get it in the capital markets."

Everybody needs Federal handouts these days, and the Fed is tapped out. Somebody's going to have to pay for these hundreds of billions in bailouts. If you want a hint who, look in the mirror.

And be prepared.


Over at BT, BooMan connects the dots from Clinton spokesman Lanny Davis (now a FOX Noise contributor) to indicted Senator Ted "Series of Toobs" Stevens of Alaska. Why is Lanny Davis defending Ted Stevens in the Washington Times?
But it does not say that Lanny Davis, or his firm, has been retained by Ted Stevens or that Lanny Davis is being paid to represent Ted Stevens. But I wonder. Lanny Davis was probably the most high profile person that has never held public office to advocate for the Hillary Clinton campaign. Hillary Clinton is a Democrat. Ted Stevens is a Republican. Ordinarily, Democrats do not race out to write opinion pieces in right-wing rags reminding people of the principle of the presumption of innocence when high-ranking members of the Republican Party get indicted. I don't begrudge the point that Mr. Davis is making. Ted Stevens deserves a fair trial, competent counsel, and all the civil rights that Americans have been taught to expect are their birthright.

But why is Lanny Davis offering this free service to Ted Stevens? Is it really a free service? Is it possible that he and the Moonie Times neglected to disclose something here? I don't know any lawyers as exalted as Lanny Davis but my understanding is that their services don't come cheap. I can see how Mr. Davis might be moved by friendship and political affinity to donate his services as an advocate to the Clinton family. But it's harder for me picture exactly why Mr. Davis would do the same for an 84-year old Republican from Alaska.

And of course, it makes no sense unless you realize what's really at stake here:

With a client list that has included Pervez Musharraf's Pakistan and 'corporations and government contractors' and with a history of backing DLC champions like Hillary Clinton, Joe Lieberman, and Evan Bayh, maybe it isn't all that surprising that Lanny Davis is willing to provide pro bono services to Sen. Ted Stevens.

Once the primary was over, Fox News was quick to snap up Team Clinton members Howard Wolfson and Lanny Davis as 'political commentators', and Clinton 'chief strategist' Mark Penn immediately went into business with Karen Hughes. Lanny Davis also joined Clinton advocate James Carville in his character witnessing and apologistics for Scooter Libby. Carville, you might remember, is married to former Cheney staffer Mary Matalin, who is the publisher of the latest 'swiftboating' book on Barack Obama. This is something that disgusts even Wanker Emeritus Joe Klein.

What, exactly, is it that Mr. Lanny Davis of the law firm Orrick, Herrington & Sutcliffe sees as such a threat from the election of Anchorage Mayor Mark Begich to Ted Stevens' seat in the U.S. Senate? Why are Evan Bayh and Lindsey Graham so eager to promote Lanny Davis' books? Wonkette thinks Lanny Davis is off his meds, but I think Wonkette fails to understand the nature of the bipartisan permanent government that seeks to maintain control of both parties, no matter who wins individual elections. They are the people that agreed to embark of George and Dick's Excellent Adventure in Mesopotamia and that, ever since, have sought to cover-up for that mistake and protect their interests.

The Village is both Democrat and Republican, and they protect their own. Ted Stevens is arguably the most powerful single Senator in Washington...or was until he was indicted by the Bush Justice Department at age 84 for crimes that they couldn't even ignore any longer. A lot of folks have a great big stake in keeping the status quo going, and Stevens outlasted his usefulness to it. There's no way the Bushies would have proceeded to indict the longest serving GOP Senator in the country unless it was time for him to go.

We need to change it, and part of that change is realizing who the bad guys are. They include Lanny Davis for sure, but note who he's buddies with these days in Lindsey Graham and Evan Bayh.

If there's any more evidence that Evan Bayh should not be Obama's Veep, then there you go. He's part of the Village.

Then again, there's the argument that Obama is part of it as well.

Arizona John And The Volcano Of Doom

Reporter David Kirkpatrick takes Arizona John McSame apart in the NY Times. It's not that hard to deconstruct somebody so prone to self-destruction. Half the work in taking the target apart is already done for you, you just have to unscrew a few bolts.
Now, as Mr. McCain prepares to accept the Republican presidential nomination, his response to the attacks of Sept. 11 opens a window onto how he might approach the gravest responsibilities of a potential commander in chief. Like many, he immediately recalibrated his assessment of the unseen risks to America’s security. But he also began to suggest that he saw a new “opportunity” to deter other potential foes by punishing not only Al Qaeda but also Iraq.
Iraq was McSame's focus from day one, just like Bush. How does this qualify him for anything?
“Just as Sept. 11 revolutionized our resolve to defeat our enemies, so has it brought into focus the opportunities we now have to secure and expand our freedom,” Mr. McCain told a NATO conference in Munich in early 2002, urging the Europeans to join what he portrayed as an all but certain assault on Saddam Hussein. “A better world is already emerging from the rubble.”

To his admirers, Mr. McCain’s tough response to Sept. 11 is at the heart of his appeal. They argue that he displayed the same decisiveness again last week in his swift calls to penalize Russia for its incursion into Georgia, in part by sending peacekeepers to police its border.

His critics charge that the emotion of Sept. 11 overwhelmed his former cool-eyed caution about deploying American troops without a clear national interest and a well-defined exit, turning him into a tool of the Bush administration in its push for a war to transform the region.

“He has the personality of a fighter pilot: when somebody stings you, you want to strike out,” said retired Gen. John H. Johns, a former friend and supporter of Mr. McCain who turned against him over the Iraq war. “Just like the American people, his reaction was: show me somebody to hit.”

McSame is a hothead, a loose cannon who has repeatedly lashed out throughout his political career and been wrong about doing it. It gets worse.
Whether through ideology or instinct, though, Mr. McCain began making his case for invading Iraq to the public more than six months before the White House began to do the same. He drew on principles he learned growing up in a military family and on conclusions he formed as a prisoner in North Vietnam. He also returned to a conviction about “the common identity” of dangerous autocracies as far-flung as Serbia and North Korea that he had developed consulting with hawkish foreign policy thinkers to help sharpen the themes of his 2000 presidential campaign.

While pushing to take on Saddam Hussein, Mr. McCain also made arguments and statements that he may no longer wish to recall. He lauded the war planners he would later criticize, including Defense Secretary Donald H. Rumsfeld and Vice President Dick Cheney. (Mr. McCain even volunteered that he would have given the same job to Mr. Cheney.) He urged support for the later-discredited Iraqi exile Ahmad Chalabi’s opposition group, the Iraqi National Congress, and echoed some of its suspect accusations in the national media. And he advanced misleading assertions not only about Mr. Hussein’s supposed weapons programs but also about his possible ties to international terrorists, Al Qaeda and the Sept. 11 attacks.

McSame was wrong, wrong, wrong about Iraq. His answer is always more war, more troops, more guns and bombs and deaths. This is the kind of thing that a McSame presidency will mean: more and bloodier wars with more countries, more crushing trillions in debt, more Americans drowned in the red ink of a failing economy. And yet Obama is supposed to be weak on foreign policy. It's far past time McSame was called out on his temper and his critical mistakes on Iraq. He's not fit for command, and we need to stop pretending he is.

POW: Prisoner Of Words

Atrios calls out McSame's camp on the "Cone of Silence" issue at the Saddleback Church forum.
Interviewed Sunday on CNN, Mr. Warren seemed surprised to learn that Mr. McCain was not in the building during the Obama interview. A spokeswoman for Mr. McCain said he was en route to the church.

Nicolle Wallace, a spokeswoman for Mr. McCain, said on Sunday night that Mr. McCain had not heard the broadcast of the event while in his motorcade and heard none of the questions. “The insinuation from the Obama campaign that John McCain, a former prisoner of war, cheated is outrageous,” Ms. Wallace said.

Bullshit. If McSame wasn't listening, then his campaign staff was, bet your life. This guy can't even cheat (something you kind of expect from a politician) without looking like a twit. It means either McSame's a liar, or Rick Warren is.

We've Got An Usurious Problem Here

Ohio's Payday loan usury law is expected to go into effect next month, and the battle is on between the loan industry and Ohio Governor Ted Strickland.
Ohio, having dealt a blow to its payday loan industry by enacting a usury law, is teeming with charges of deceit in a petition drive to reverse the law.

HB 545 was signed in June by Governor Ted Strickland, and will go into effect in early September. Under the law, the APR for a payday loan will be capped at 28%, and an Ohioan would be limited to four loans per year. Opponents of the legislation argued that outlawing such small, short-term loans, with an APR of up to 391%, will eliminate 6,000 jobs in Ohio and force as many as 1,500 statewide store locations to close.

If an industry needs 391% interest to operate, there's a problem...and the 6,000 jobs is a bluff. After all, just across the river in Kentucky payday loan centers are all over the place, and the interest rate? 459%.

It's a scam, preying on the poor and uniformed. $15 on every $100 borrowed for a finance charge, plus $17.59 in service fees? Those fees pile up every two weeks. It's legalized loan sharking and it's good, good business, because in Northern KY near Cincy where I live, there's a good 6 or 8 of these places within a couple square miles, and not just the poor parts of town. Any strip mall in Florence or Covington or Crescent Springs has one. Some have more than one. And more and more people are turning to these places and getting wiped out, having to take out loan after loan after loan to keep up.

In KY a $500 payday loan gives you two weeks to pay back about $675. If you don't, the fees start adding up frighteningly fast. And it's all legal. Ohio put a stop to it. Kentucky needs to do the same now that Steve Beshear is in charge.


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