Peter Schiff, a capital fund manager from Connecticut, is considering taking on Chris Dodd in the 2010 Senate race. Schiff has received credit for correctly predicting the recession and would provide a sharp contrast against Dodd who was sleeping at the wheel as Senate Chairman of the Banking Committee when the financial crisis unfolded. Schiff, for whom a draft effort is up at www.Schiff2010.com, is a strong fiscal conservative who backs individual liberty and state’s rights. He also has solid grassroots support including a wide base of small donors.
On Thursday Schiff was interviewed by Justin Fox from Time magazine. While the journalist tries to paint his fiscal viewpoints as extremist, Schiff counters by saying that he believes the mainstream will move closer to his position once more people realize the failure of existing liberal spending policies.
Peter Schiff is loud–a decibel or 12 above everybody else. And it’s hard to get him to stop talking. Ask the man a simple question and you get a 10-minute harangue in response. This harangue is likely to feature libertarian political opinions that are by Schiff’s own admission pretty extreme–inherited as they were from a father currently in prison (at age 81!) for refusing to pay income tax.
Yet Schiff, 46, is not just some opinionated boor. He possesses a self-awareness that renders him a bit less obnoxious than I’ve described, and he happens to have done a better job than just about anyone else of forecasting in 2006 and early 2007 what was about to happen in U.S. financial markets. This wasn’t a broken-clock-is-right-twice-a-day thing: Schiff appeared on the national scene just as the credit bubble was reaching maximum inflation and offered a critique of the nation’s unsustainably debt-fueled economic trajectory that is now–after the fact–widely accepted.
As markets collapsed late last year, Schiff, who runs the Connecticut-based brokerage firm Euro Pacific Capital, briefly got to bask in the glory of his spectacular call. He ran a victory lap of sorts on the cable news networks. A fan put together a 10-minute YouTube clip of his precrash predictions on CNBC and Fox News–complete with smirking and dead-wrong rebuttals from the likes of Arthur Laffer and Ben Stein–that has been watched more than 1.3 million times.
Schiff’s potential opponent, Chris Dodd, is considered to be the most vulnerable democratic Senator up for election in 2010 due to scandals involving AIG and Countrywide. Last Summer Dodd ran into trouble when it was revealed that he had received favorable terms from Countrywide on his home mortgage.
Senator Dodd received two loans in 2003 through Countrywide’s V.I.P. program. He borrowed $506,000 to refinance his Washington townhouse, and $275,042 to refinance a home in East Haddam, Connecticut. Countrywide waived three-eighths of a point, or about $2,000, on the first loan, and one-fourth of a point, about $700, on the second, according to internal documents. Both loans were for 30 years, with the first five years at a fixed rate.
The interest rate on the loans, originally pegged at 4.875%, was reduced to 4.25% on the Washington home and 4.5% on the Connecticut property by the time the loans were funded. The lower rates save the senator about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home. The former employee says the float-downs were free. Senator Dodd’s wife, Jackie Clegg, said in a brief interview that two other lenders they checked with offered comparable interest rates. The senator’s office said Thursday afternoon that it is preparing a response.
Countrywide has also contributed a total of $21,000 to Dodd’s campaigns since 1997. While a presidential candidate last year, he filed a bill to ban lenders from charging prepayment penalties and steering home buyers to more costly loans—both practices in which Countrywide reportedly engaged. He also called for criminal charges for such predatory lending.
The hot water surrounding Dodd increased to scorching boil in March when it was reported that the Senator provided a loophole for AIG executives to continue receiving million dollar bonuses after the company was given billions in government aid.
Senate Banking committee Chairman Christopher Dodd told CNN Wednesday [March 18] that he was responsible for language added to the federal stimulus bill to make sure that already-existing contracts for bonuses at companies receiving federal bailout money were honored.
Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.
…He said Wednesday that the “grandfather clause” language “seemed like innocent modifications” at the time.
Dodd’s level of support has weakened to below 50% is his home state of Connecticut where he is extremely vulnerable to a challenge from a strong fiscal conservative like Peter Schiff.