Filed under: Politics, Housing

The Wall Street Journal [subscription required] adds a new wrinkle to the story of efforts by subprime mortgage lender Ameriquest to use campaign cash to curry favor with the government. Ameriquest’s parent, ACC Capital Holdings, has paid $325 million to settle regulators’ claims that it charged excessively high mortgage rates and didn’t adequately disclose loan risks. The Journal’s story today highlights the $20.5 million Ameriquest spent at the state and federal government levels to block legislation that would have limited its predatory lending practices.

But as I posted in August, Ameriquest’s cash helped boost the fortunes of president Bush. Bush, who used home ownership politics to get re-elected, received $7.8 million from Ameriquest for his 2004 reelection campaign, his inauguration and for Laura Bush’s library foundation.

Ameriquest’s most interesting pay-to-play technique was to give Rolling Stones tickets and cash to state legislators. For instance, according to the Journal, “Arnold Schwarzenegger’s campaigns received at least $1.4 million, along with stacks of tickets to a Rolling Stones concert that were used to lure big donors.” And Ameriquest also handed out Rolling Stones tickets to state legislators in Georgia, Maryland, Nevada, Oregon, Utah, Washington and California.

What did Ameriquest get for all its giving?

It got two state legislatures to overturn legislation that blocked its business and kept a third say from introducing such legislation. In Georgia, the subprime industry helped overturn a law it opposed that required proof that a refinancing of any home loan less than five years old would have a tangible-net-benefit. In New Jersey, the subprime industry also rolled back the tangible-net-benefit rule. And In Texas, Ameriquest’s contributions helped block a law that would have restricted home appraisers from overvaluing homes — a contributor to subprime problems.

Will the subprime disaster become part of president Bush’s legacy? Ameriquest’s cash and Rolling Stones tickets recommend it already is part of the legacy of several say government officials.

Perhaps Ameriquest’s CEO, Roland Arnall, was inspired by the lyrics of the Rolling Stones’ song Sympathy for the Devil:

Please grant me to introduce myself
I’m a man of wealth and taste
I’ve been around for a long, long year
Stole many a man’s soul and faith.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

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Filed under: Before the bell, Market matters, Merrill Lynch (MER), Economic data, Housing

That’s it, today is the last trading day and time has all but run up on anyone wanting to still impact their portfolio for 2007. Stock futures were higher this morning, indicating U.S. stocks could open on a positive note on 2007’s last trading day. And how fitting that this day, the latest reading on the ailing housing market — a subject that was key to 2007 — will be released.

Judging from the last holiday week, trading will continue to be thin and while stock markets are open regular hours, bond markets will close early at 2 p.m. EST.

No doubt, many recaps and summaries will be done this day, but the year isn’t over yet and at 10:00 a.m. EST, the National Association of Realtors is due to report November existing home sales. After already setting a record low last month with an annual rate of 4.97 million, economists are looking for annual growth ranging between 4.7 million to 5.15 million according to Bloomberg, pointing to continued housing recession in 2008 that’ll continue to weigh heavily on the economy.

Overseas, Asian markets have already wrapped-up their year. “This year, the world discovered the Chinese stock market.” Indeed, the Shanghai Composite index soared 97% this year, making it the world’s best-performing major benchmark index. Other Asian exchanges finished the year higher as the MSCI Asia Pacific Index advanced 12% in 2007.
While several European markets are still open at this time, in general, markets are declining, “leaving the Dow Jones Stoxx 600 Index on track for its first annual decline since 2002” of 0.2%.

Not performing superior than the Nasdaq composite, bonds beat the S&P 500 so far in 2007, having the ideal year since 2002. Treasuries returned 8.7%, according to a Merrill Lynch & Co. index, as losses tied to subprime mortgages stoked demand for the safety of government debt.

Conversely, the dollar traded at a two-week low versus the euro and yen today. As of Friday, it has lost 11.4% this year against the euro, and 6% against the yen this year.

Also in corporate news this morning:
Kirk Kerkorian’s Tracinda said it is going to purchase 35% of Delta Petroleum (NASDAQ: DPTR) for $684 million, or $19 a share. DPTR shares are up 22.5% in premarket trading to $19.

According to The Observer, Merrill Lynch & Co (NYSE: MER), despite a recent huge injection from Temasek , is in speaks with Chinese and Middle Eastern sovereign wealth funds that could lead to the sale of another big stake.

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Filed under: Politics, Housing

The Wall Street Journal [subscription required] adds a new wrinkle to the story of efforts by subprime mortgage lender Ameriquest to use campaign cash to curry favor with the government. Ameriquest’s parent, ACC Capital Holdings, has paid $325 million to settle regulators’ claims that it charged excessively high mortgage rates and didn’t adequately disclose loan risks. The Journal’s story today highlights the $20.5 million Ameriquest spent at the state and federal government levels to block legislation that would have limited its predatory lending practices.

But as I posted in August, Ameriquest’s cash helped boost the fortunes of president Bush. Bush, who used home ownership politics to get re-elected, received $7.8 million from Ameriquest for his 2004 reelection campaign, his inauguration and for Laura Bush’s library foundation.

Ameriquest’s most interesting pay-to-play technique was to give Rolling Stones tickets and cash to say legislators. For instance, according to the Journal, “Arnold Schwarzenegger’s campaigns received at least $1.4 million, along with stacks of tickets to a Rolling Stones concert that were used to lure large donors.” And Ameriquest also handed out Rolling Stones tickets to state legislators in Georgia, Maryland, Nevada, Oregon, Utah, Washington and California.

What did Ameriquest get for all its giving?

It got two say legislatures to overturn legislation that blocked its business and kept a third say from introducing such legislation. In Georgia, the subprime industry helped overturn a law it opposed that required proof that a refinancing of any home loan less than five years old would have a tangible-net-benefit. In New Jersey, the subprime industry also rolled back the tangible-net-benefit rule. And In Texas, Ameriquest’s contributions helped block a law that would have restricted home appraisers from overvaluing homes — a contributor to subprime problems.

Will the subprime disaster become part of president Bush’s legacy? Ameriquest’s cash and Rolling Stones tickets recommend it already is part of the legacy of several say government officials.

Perhaps Ameriquest’s CEO, Roland Arnall, was inspired by the lyrics of the Rolling Stones’ song Sympathy for the Devil:

Please allow me to introduce myself
I’m a man of wealth and taste
I’ve been around for a long, long year
Stole many a man’s soul and faith.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

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