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Hartlyboy
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Posted: Mon Sep 29th, 2008 11:14 pm |
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| Well, Nasty Nancy Pelosi had another 'done deal' pulled out from under her. She didn't help things any by trashing the other side about being unpatriotic BEFORE the vote. It will be interesting to see what she calls the 94 Democrats who voted against it along with about the same numbers of Republicans.
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cottoncandy
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Posted: Mon Sep 29th, 2008 09:24 pm |
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Mendavor wrote: This entire financial crisis just proves that capitalism doesn’t work. It is in total failure. This system has been totally discredited. Finally the states now will play a bigger role as will the mother central government........
Has anyone checked out the definition of Marxism? Does anyone here really want to live in a Marxist/Communist society? Are you ready for the government to destroy your freedom, tell you how much money you are allowed to make, how big a house you are allowed to live in, whether or not you can have a life-saving operation, etc.?
American Heritage New Dictionary of Cultural Literacy, Third Edition: Marxism
"The doctrines of Karl Marx and his associate Friedrich Engels on economics, politics, and society. They include the notion of economic determinism — that political and social structures are determined by the economic conditions of people. Marxism calls for a classless society in which all means of production are commonly owned (communism), a system to be reached as an inevitable result of the struggle between the leaders of capitalism and the workers."
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Mendavor
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Posted: Mon Sep 29th, 2008 08:23 pm |
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This entire financial crisis just proves that capitalism doesn’t work. It is in total failure. This system has been totally discredited. Finally the states now will play a bigger role as will the mother central government. With the finality of the defeat of Republicans and the total demise of their party, will be entering into a new system that has been developed in China and in Russia. This is the juncture just where we should be. Realize and be thankful that the country is fundamentally changing. The US dollar is going to become relative to all other currencies. The entire world wants this to happen. We are now entering onto an era of a one global currency, and it is not the U.S. dollar. China said yesterday that their banks can no longer make any loans to the United States. The UN says we should have a one world finance system. Several foreign ministers said capitalism is dead and it doesn't work. People of America, awaken. We have a dictatorship of the proletariat at hand. Seize the opportunity. Rid the nation of the capitalist vermin. Vote for Barack Obama for the salvation of the working man. He is the only one who has even mentioned relief for us whose hand tills the soil and oils the machines. Restore America’s greatness under a new banner.
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The Insyder
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Posted: Mon Sep 29th, 2008 05:51 pm |
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The insanity of this all is the fact that Franklim Raines, Jim Johnson, Chuck Schumer, Barney Frank, Charlie Rangel, Christopher Dodd, Henry Paulson, and Ben Bernake are the guys DIRECTLY responsible for allowing things to reach this point and now they are spearheading the bailout? They want to include ACORN for a 20% bailout figure? What the hell for? They were among those pushing to force banks to give out zero interest teaser rates for adjustables, no income verification loans, loans to unqualified minorities in low income areas. Bush warned them in 2001 and 2002, and McCain warned them in 2005 and 206 and co-aouthored legislation to stop the plunge. Thanks to the Democrats who continued to pander to the very-low income people they blaocked any meaningful efforts and now blame the Republicans. It's all in the Senate Reprts and the Congressional Record. Never mind the leftist news media. Look at the facts and follow the money trail.
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Someone
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Posted: Mon Sep 29th, 2008 12:29 pm |
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| Now since they say all this mess is because of bad loans, mostly on housing loans, on people who live in big house they can't pay for. My question is are these folks still going to be allowed to live in these houses they can't pay for. We have been working for years with good incomes and have been paying for the house we live in, but now it looks as if we have to pay for other folks homes. So is this going to be the case.
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Hartlyboy
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Posted: Sun Sep 28th, 2008 12:18 am |
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Serve, you make a good point about the concern about CEO pay being factored into the objections raised at the street level. The rescue plan is trying to accomodate that by yielding to political reality and putting some sort of limits on but it is far more likely that the market itself will keep those big profits and paydays from happening anytime soon. What has been given can't be taken back. What those people had to look forward to has been taken away, however. Stock options in Lehman Brothers aren't a big plus to your net worth these days...
I believe the Washington power structure will brush off many of the citizen concerns about a bail-out because they are also panicked about the possible result -and being blamed if it does come to pass. They could sure make it more palatable to the Republicans, though, if they took out the Dodd provision that gives ACORN and La Raza a piece of the action. Putting money into the hands of those dubious outfits makes it seem like there are too many giifts tied up in all this in addition to the obvious one to the banking system.
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Servenvolley
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Posted: Sat Sep 27th, 2008 09:51 pm |
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| Hartly, I think the biggest problem many have with the package is the perception that this means the CEO's of the last of the investment banks will get back millions of stock options and continue to vacation on a chartered yachts while we struggle to make ends meet. The biggest issue facing the prospect of no financial package from the government is this...without it, there is a huge credit freeze. People will have a much tougher time obtaining lines of credit, student loans will be harder to obtain.. The reason, many financial institutions don't have surplus cash to put back in the economy. Many firms are keeping their cash "under their mattress" in the event more people seek redemptions out of their mutual funds, money market funds, etc... By the government taking back the mortgage debt off the banks' hands, these banks will now be able to get money flowing more freely through the financial network. As time passes the hope is that the property values will start to increase again and the value of the mortgage backed securities will be tangible meaning there is an assignable value to these securities. The government could then sell these back and make back the 700 billion plus. Without it, the rebuilding process of the economy would be considerably slowed and who knows how long the task of fixing the economy would be. Even with the plan, it is a long road.
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Hartlyboy
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Posted: Sat Sep 27th, 2008 02:59 pm |
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I think one of the things lost in all this great concern about a Wall Street bailout is that it isn't really "Wall Street" in the traditional sense that is being considered for rescue. Most people think of Wall Street in context with the stock exchange. This buyback operation has more to do with investment banks who just happen to have most of their offices on Wall Street in New York.
The connection between them and Wall Street [stock exchange] is that the banks have stock sold on the stock exchange and if you own any, like many pension funds do, you have and will see your portfolio values go down. The other companies on the exchange are affected mostly by their ability to borrow money for operations or expansion [no banks, who will lend?]. The changes in the Dow Jones we have seen over the past weeks are mostly short term emotional reactions to something new and unprecedented. Most of our big companies will figure out how to weather this even if the investment banks don't. I'm not sure where all the talk of the Great Depression is coming from. It is our banking system that is overvalued with worthless paper , not our manufacturing companies assets as was the case back in 1929.
Maybe I'm not seeing something the rest of you see, but the impact of not doing anything would be hurtful, surely but to equate it with a complete economic collapse as some are saying in Washington makes me wonder if we are getting smoke blown at us.
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Servenvolley
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Posted: Sat Sep 27th, 2008 02:39 pm |
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| While Wall Street executives should not be absolved of their actions, the Republican alternative to Paulson's plan is not feasible. The crux of this issue is not executive's pay with the plan, but rather how do we price these securities that are in essence impossible to price at this time. Upon seeing the protests of the Wall St 700bil proposal, I stand by my assertion that the majority of people are stupid. Their assertions bordered on the ridiculous.
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smyrnawire
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Posted: Sat Sep 27th, 2008 01:45 am |
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How is the CRA a success story if these same blacks and latinos now have homes they cannot afford? How is it a success story if society pays the price for this ownership by having their homes loose value as a result of the many foreclosures in these same neighborhoods - black, white and latino neighborhoods alike have suffered.
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Tinkerbelle
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Posted: Sat Sep 27th, 2008 01:00 am |
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Thursday, September 25, 2008
LA Times article on May 31, 1999
It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites.
In 1992, [a majority Democratic] Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets.
Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.
The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers.
MP: Government policy turned million.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University in Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. Since 1997, Professor Perry has been a member of the Board of Scholars for the Mackinac Center for Public Policy, a nonpartisan research and public policy institute in Michigan.
Last edited on Sat Sep 27th, 2008 01:06 am by Tinkerbelle
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smyrnawire
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Posted: Fri Sep 26th, 2008 11:17 pm |
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Sometimes, I think all the smart people in the world simply come up with solutions to address problems they have not taken the time to understand. For example, the Community Reinvestment Act was supposed to make it so low-income people could sign on to homeownership. Did the authors of the CRA understand why low-income families did not own homes? Or was the CRA effort born of ulterior motives? I can not understand why the powers that be at the time would mandate homeownership for low-income people without guaranteeing that there would always be low cost houses for them to buy.
One of the splinters of todays' economic crisis was rapidly rising home values which then became the impetus for the booming refinance market which is where a good bit of the bad debt was cultivated. Low-income households and households of limited resources took advantage of the equity in their homes. In other words, they gambled and lost. Nonetheless, and not to place all the blame on them, it would have been nice if the crafters of the CRA had looked a little ways down the road just as I hope the the crafters of todays' bailout are looking ahead.
http://www.smyrnawire.blogspot.com
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Tinkerbelle
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Posted: Fri Sep 26th, 2008 09:47 pm |
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McCain knew what would happen to the economy due to the sub-prime loan situation created by the Clinton administration in the '90s. He tried to warn us, and tried to do something about it. What happened? What happened was.... Democrats continued to line their pockets, block reform, and get sweetheart mortgages. Now, they are excited and overjoyed that the financial sector is in trouble because they see it as opportunity to foist blame on the current administration as a campaign issue.
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Hartlyboy
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Posted: Fri Sep 26th, 2008 09:22 pm |
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The Dem leadership has been at it nonstop on the radio today complaining that the Republicans stopped the big rescue deal that was supposed to have been all but put to bed. I'm so tired of the posturing in all this that, despite my misgivings about a buy-out deal, I'm going to invite Biden and his buddies to just go ahead and do it.
That's right Harry and Nancy and Barney, use your control of both houses of government to put in the buy out plan for your Wall Street buddies and contributors. Go ahead. The Republicans can't stop you, you have the votes. Do it. Save the world. Earn the undying gratitude of the masses and make them part owners of all the worthless business shells that are going to be left. Your boldness will sweep your man to victory and the sun will come out from behind the clouds. You can't lose.
Hey guys, C'mon. Where's the old spirit? [crickets chirping]
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The Insyder
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Posted: Fri Sep 26th, 2008 06:56 pm |
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Posted at 11:45 am on September 17, 2008 by Ed Morrissey
With the financial sector in turmoil today, the media and the politicians have started throwing around blame with the same recklessness as lenders threw around credit to create the problem. Politically, the pertinent question is this: Which candidate foresaw the credit crisis and tried to do something about it? As it turns out, John McCain did — and partnered with three other Senate Republicans to reform the government’s involvement in lending three years ago, after an attempt by the Bush administration died in Congress two years earlier. McCain spoke forcefully on May 25, 2006, on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005 (via Beltway Snark):
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Hartlyboy
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Posted: Fri Sep 26th, 2008 03:54 pm |
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Serve, I'd have to agree that the genisis of the problem was with the ignorant or crooked people who signed on to the mortgages that got us in the mess. They were the needed tinder for the fire but to have mortgage companies lend money on no verified income or with no down payment and to knowingly participate in flipping schemes puts more of the blame on the next higher echelon. They were the bartenders who were serving alcohol to the obviously impaired. Then to have outfits like the investment houses and GSE's like Fannie and Freddie actually buy this junk and pretend it was valuable paper and loan more money to do it over again/?-that's just crazy. Used cars going out on the lot at auctions got more scrutiny than the packages these banks and secondary markets were selling to each other. Then , to top it off, the financial wizards invented other 'instruments' to hedge and insure their 'assets'. A house of cards waiting to topple.
To pass it all off on the private sector , though , is too easy. Bixby's post regarding Fannie and Freddie does show that the government oversight that was needed and recognized didn't come to pass for a lot of political reasons that should forever haunt the useless drones we pay for in Washington. We now watch as the Democrats try to demonize the Republicans and omit their own major role in the impending collapse and see the Republicans pointing their fingers back and saying "I told you so.." Lot of help any of that does.
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Bixby
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Posted: Fri Sep 26th, 2008 03:20 pm |
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White House warned about Fannie and Freddie time and time again. The Democrats, to the man, voted to block any meaningful reform.
September 23, 2008 - 0:49 ET
For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)
2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
(White House Press Release)
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Bixby
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Posted: Wed Sep 24th, 2008 07:23 pm |
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Part 4 of the Banking Mess
So why did all the dominos fall? Where were the watchdogs we hired to protect us? Who was protected? At the same time that FNMA was peaking and steeped in scandal, so was Enron. The MSM, especially the network news, focused on the Enron mess but almost virtually ignored the troubles at FNMA and FHLMC. What proof? The Internet search engines. A search for “Enron” came up with 3,017 hits on LexisNexis but only 37 hits for FNMA. The reason? Clinton appointees ran FNMA but Republican Ken Lay ran Enron. “I mean, they do all the things that, let’s face it, liberal journalists like, put home mortgages out there for poor people. And so right now, beating up on FNMA is kind of politically incorrect.” (Charles Gasparino, Newsweek) Who in their right mind would actually speak out against The Community Reinvestment Act.
When It was started back in the 1970’s under President Jimmy Carter, he and fellow Democrats claimed the “urgency” of investing in our communities again." (Boston Globe) A 1992 study by the Boston's Federal Reserve (funded by them) claimed to have found “subtle racism” in the banking system and they declared that it was blatant discrimination in lending. The study, although fatally flawed, was accepted by the Congress as “proof” of discriminatory lending in the mortgage banking industry. It was the policy of the banks of the day that loans would not be granted to those who had insufficient assets or verifiable income to support a mortgage loan. Banks The Fed used this flawed study that they brought to the Congress and used it to further legislation that would eventually create worthless paper and saddle the banks with unredeemable loans. In 1992 the discrimination in lending was the idea that banks wouldn't make loans in low income areas. It was known as “redlining.” So if you were in Detroit and you had a house that was selling for $100,000 last year and is now worth $10,000, the banks were stating that they were not going to loan anybody any money because the neighborhood didn’t support the income level for a loan. According to those in Congress, banks that had minimum lending requirements was considered to be engaging in racial discrimination in lending. Furthermore, they also determined that the application fee was a racist devise. Imagine that? The fact that you had to actually verify your income was racist. That was 1992.
In 1992 the liberal Congress wanted to revise the Community Reinvestment Act with provisions for penalties if it was determined that you were engaging in racial discrimination. Now, under the CRA, the banks had to convince a whole set of bureaucracies that they weren't indeed engaging in discrimination. There was a problem because just about anybody could accuse a bank of engaging in discrimination and being racist. All it took was a phone call or a visit to one of the community activist organizations. The Association of Community Organizations for Reform (ACORN) was very instrumental in declaring banks of engaging in racial discrimination. Let me point out to you again as I stated above, what was described as “discrimination” after the year 1992 was based on arbitrary, flawed and outdated criteria. That outdated or arbitrary criteria was income level, income verification, credit history and savings history. To the liberal Congress, this no longer mattered.
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Servenvolley
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Posted: Wed Sep 24th, 2008 04:45 am |
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| First. Bixby...the majority of the people of this country are dumb. I don't even think that's debatable. Second. While I applaud your ability to cut and paste from the internet, coming from someone in the finance industry-the culprits for our current predicament are many. I do find it comical to hear "the taxpayers are outraged that they have to bail out Wall Street." The taxpayers have to shoulder blame as well. The # of foreclosures is mind blowing and while government and Wall Street were profiting, the taxpayers were getting into mortgages they had no business signing up for. At some point personal accountability must take place. This does not give government and Wall Street a free pass from blame, but often people want to assign blame before owning up to it.
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Boo
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Posted: Tue Sep 23rd, 2008 10:22 pm |
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Hey, Bixby. Y'all left out James Johnson. He wuz the guy who was a vettin the Obama campaign till he wuz discovered as one of them guys responsible for the banking mess. And Raines is Obama's top financial adviser. Good to have a guy what knows how to cook the books on staff. Helps to hide things from them thar pesky auditors.
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Ben Franklin
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Posted: Tue Sep 23rd, 2008 07:23 pm |
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| I agree except for the fact that most americans do fall for spin. If we didnt we wouldnt be the largest consumers on the planet. Less TV and more books
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Bixby
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Posted: Tue Sep 23rd, 2008 05:18 pm |
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Part 3 of the Banking Mess
So exactly who were the FNMA fatcats responsible for the deception by “cooking-the-books?” It's both a Democrat and Republican problem -- while Nancy Pelosi and the left are just saying it's a Republican problem. That's a winning argument for McCain because the American people aren't stupid; they know the difference between spin and truth. Blaming something like the banking woes on just the Republicans is, to quote a great Greek God, 'just more of the same’. OK. So now we’ll take a look at those fatcats who cashed in on the FNMA cooked books. Let’s start with Chairman Franklin Raines, the Office of Management and Budget (OMB) appointed by President Bill Clinton. He got $52 million. Then we have the Vice Chairman, Jamie Gorelick who served as Clinton’s deputy attorney general. He is well known as the author of that infamous pre-9/11 “wall” that kept the FBI and CIA from intercommunicating with one another. He got $15 million. Let’s add Chairman and Chief Executive of FNMA, James A. Johnson. He is a lobbyist. Remember him as the one who presided over Barack Obama’s VP search committee but due to his role in the Countrywide Financial scandal he was removed. Well, anyway, he raked in $1,9 million. Subsequently, Raines and Chief Financial Officer J. Timothy Howard were dumped. So wasn’t anyone looking? Well, yes. In 2004, Alan Greenspan, Federal Reserve Chairman and John Snow, Treasury Secretary, both sounded the alarm to the Congress warning them about the potential for an economic disaster where both FNMA and FHLMC stood at the brink of. The question was asked, “What if these two companies, already standing on shaky ground, who are in control of better than half of the housing market in the USA, take a torpedo amidships? If they collapsed, would the taxpayers be taking the hit? Greenspan warned in no uncertain terms, “preventive action” needed to be taken “sooner rather than later.” There’s a lot more to come but let me ask you, do you think that this corruption is the only reason for the economic mess? What about the housing market and the loans made for the purpose of securing them? Did you ever hear of the Community Reinvestment Act and the part in played in all this? It turns out that the Democrats who have been inherently against cleaning house of FNMA and FHLMC even in light of the dire warnings posted by Greenspan and Snow. What they did instead is to come up with a “reform” package that mandated, through the Department of Housing and Urban Development (HUD), that FNMA and FHLMC start hounding out mortgages to minority and moderate income home buyers, regardless of their ability to pay. The idea that these new customers were not creditworthy didn’t bother the Congress at all. They had racial quotas to achieve in the housing market which, by now, they practically owned half of.
to be continued...
Last edited on Tue Sep 23rd, 2008 05:19 pm by Bixby
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They are all the same
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Posted: Mon Sep 22nd, 2008 10:23 pm |
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Go to this link to read more: http://en.wikipedia.org/wiki/Saving_and_Loans_Scandal
Under financial institution regulation, which had its roots in the Depression era, federally chartered S&Ls were only allowed to make a narrowly limited range of loan types. Late in the administration of President Jimmy Carter, caps were lifted on rates and the amounts insured per account to $100,000. In addition to raising the amounts covered by insurance, the amount of the accounts that would be repaid was increased from 70% to 100%. Increasing Federal Savings and Loan Insurance Corporation (FSLIC) coverage also permitted managers to take more risk to try to work their way out of insolvency so the government would not have to take over an institution.
Carter left office in January 1981, a year in which 3,300 out of 3,800 S&Ls lost money. In 1982, the combined tangible net capital of the industry was $4 billion. The chartering of federally regulated S&Ls accelerated rapidly with the Garn-St. Germain Depository Institutions Act of 1982, which was designed to make S&Ls more competitive and more solvent. S&Ls could now pay higher market rates for deposits, borrow money from the Federal Reserve, make commercial loans, and issue credit cards. They were also allowed to take an ownership position in the real estate and other projects to which they made loans and they began to rely on brokered funds to a considerable extent. This was a departure from their original mission of providing savings and mortgages
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Duncan Idaho
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Posted: Mon Sep 22nd, 2008 09:46 pm |
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They are all the same wrote: Vin, the practice of redlining was outlawed so to speak in the 1970's. It has been almost 40 years or more since the practice of redlining was made illegal.
Click on the link below to see what FDR had to say about the banking mess in the 30's. Sounds a lot like today.
Vindicator wrote: Congress passed the Community Reinvestment Act who forced the banks to loan money to high risk individuals........
Cotton Candy wrote:
Yesterday morning, I heard a caller to a radio talk show complain that Glenn Beck had said this all started when banks were forced to grant mortgages to low-income and minority borrowers who could not meet the qualifications for a mortgage. She felt this was an unfair, racist comment for Glenn Beck to make.
Yes, the redlining practice ended with the CRA signed by Jimmy Carter. This is what is meant by the beginnings occurred decades ago and is impossible to put the blame on one president or one congress. People foolishly blame Bush or even Clinton but the problem began long ago.
Cotton Candy: This is what the banks feared. To properly demand income verification to determine if a person has the financial ability to pay was indeed called "racist", absurd as it may be. After all, what bank or lender in his right mind would willingly accept a bad debt? So as a result, all this bad paper accumulated over the years until it overwhelmed the system. Last edited on Mon Sep 22nd, 2008 09:50 pm by Duncan Idaho
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bigeasy
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Posted: Mon Sep 22nd, 2008 09:03 pm |
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If my memory serves me right George W. was involved in the Savings and Loan scandle and his daddy bailed him out of it.
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cottoncandy
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Posted: Mon Sep 22nd, 2008 08:54 pm |
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Vindicator wrote: Congress passed the Community Reinvestment Act who forced the banks to loan money to high risk individuals........
Yesterday morning, I heard a caller to a radio talk show complain that Glenn Beck had said this all started when banks were forced to grant mortgages to low-income and minority borrowers who could not meet the qualifications for a mortgage. She felt this was an unfair, racist comment for Glenn Beck to make.
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They are all the same
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Posted: Mon Sep 22nd, 2008 07:51 pm |
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Vin, the practice of redlining was outlawed so to speak in the 1970's. It has been almost 40 years or more since the practice of redlining was made illegal.
Click on the link below to see what FDR had to say about the banking mess in the 30's. Sounds a lot like today.
http://www.yale.edu/lawweb/avalon/presiden/inaug/froos1.htm
edited to include link
Last edited on Mon Sep 22nd, 2008 08:07 pm by They are all the same
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Vindicator
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Posted: Mon Sep 22nd, 2008 06:55 pm |
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I can answer that if I may. There was an attempt by congress to eliminate "redlining" in low income neighborhoods. That was the practice of not lending money in high risk areas to high risk people based on their ability to repay the loans. Congress passed the Community Reinvestment Act who forced the banks to loan money to high risk individuals or risk being branded as "racist" and being charged with "racial discrimination." They even did away with income verification so thousands of people took out loans they knew that were unpayable and with the knowledge that their income would not support such a loan. As a result, the banks and mortgage lenders were stuck with "bad paper". It piled up and here we are today. This legislation was pushed by Charles Rangle and Barney Frank. Rangle, head of the House Ways and Means Committee used Jesse jackson and Al Sharpton to publically denounce any bank that had the audacity to ask minority applicans for income verification. Barny Frank is the only admitted Socialist in the congress.
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gene mullen
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Posted: Mon Sep 22nd, 2008 12:53 pm |
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Bix, you seem to have the scoop on the scandal. I have been hearing that in 1999 Clinton pushed and passed a bill changing the lending requirements of Fannie and Freddie which lowered the standards so more people could get loans they couldn't pay back. Any truth in this? I haven't had time to check it out.
Also, Obama's top campaign guy was involved and made millions off of this. As did several of his other campaign big wigs. Thanks
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Bixby
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Posted: Mon Sep 22nd, 2008 12:25 pm |
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Part 2 of the Banking Mess
There's been a lot of finger pointing going around on this economy craziness -- most of it (of course) is aimed at George W. Bush and John McCain. Who's really to blame? This just didn’t happen overnight and it’s not limited to one particular political party. There’s plenty of blame for all to share. If anyone would care to remember that after the brazen admission of years of using accounting schemes to under-report earnings (somewhere about five or so billion bucks) our two entities (FNMA and FHLMC) wound up as targets of the Justice Department. That was in 2003. The FHLMC was fined $125 million to federal regulators, judged to pay over $400 million in shareholder lawsuit settlements, and paid $3.8 million in civil fines and penalties to settle Federal Election Commission (FEC) charges of improper political fundraising activities. (As reported in the Washington Post) Are you beginning to catch the scent of things? Now things have begun to hit the fan. Well, if you think that was bad, let’s look at Freddie’s sister, Fannie. It makes Freddie’s “creative” accounting look like grade school arithmetic. There were two separate federal reports, one in 2004 and one in 2006 but few in Congress took any serious steps despite warnings by an alert few. The federal reports said that FNMA out-and-out cooked the books so that certain “friends” of influential people in Congress would scoop up billions of bucks in windfall profits. FNMA criminally misstated its earnings by around $10.6 billion dollars from 1998 to 2004. This was done so that million dollar bonuses could fraudulently be distributed to the FNMA fatcats and certain members of the Congress, and not just a paltry few. Some of this may just be getting out in the news media but they (the MSM) just don’t go far enough. The only paper that has given more than just a cursory look was the Washington Post. Why didn’t Congress act? Because the recipients of these monies were well protected and some of them still to this day. Want to know who they were? We’ll take a look at the real culprits and what those culprits were saying back in the mid-90s – and I will name names and all are well documented.
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Bixby
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Posted: Thu Sep 18th, 2008 05:37 pm |
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If you rely in the mainstream media or the blathering of the candidates, you will never know the series of events that brought on this economic crisis brought about by Congressional corruption, the fleecing of the taxpayer, and the cooking of the books by protected individuals. This did not happen overnight, over a few weeks, or months. It has taken years of unchecked corruption and the lack of any meaningful oversight by Congress, and political shenanigans by both parties. You hear Obama asking “where was McCain on all of this? He was in Congress for years and has done nothing.” Well, you can also ask, where was Biden in all of this? He was in Congress longer than McCain. And what has Obama done for the two short years in the Senate besides spending most of his time running for office? Questions can be asked of either party but you have to go pretty far back for the truth.
To begin with, the Federal National Mortgage Association, (FNMA or Fannie Mae) was not and is not a darling of the Republican Party. It was an FDR New Deal creation in 1938. The birth of FNMA was done with the best of intentions in that government would be able to help make homeownership easier for the majority of Americans, however, by the veery nature of its very lofty intentions, its operations were shielded from actual scrutiny, oversight and accountability.
The 1960’s housing boom caused the government to create yet another organization, similar in nature to FANMA in 1970 and called it the Federal Home Loan Mortgage Corporation, (FHLMC) or Freddie Mac) A red flag that was raised and ignored about these two mortgage companies in that both of them also had the distinction of being Government Sponsored Entities (GSEs). Both of them were created to make and keep profits like any private company but never had to worry about risk because our benevolent government assured them both a line of credit with a combined worth of $4.5 billion dollars. They can borrow money at interest rates far lower than private companies can, don’t have to pay any state or local income taxes, and the F3deral reserve was granted the power to buy any debt that they incurred.
By the 1990’s, they both have acquired more than half of the residential mortgage market in America and became government subsidized housing monopolies. Do you now see where this is heading? I should note that FANMA and FHLMC do not offer or grant mortgages directly. They buy them up from the thousands of banking and lending institutions on the secondary market.
To be continued…
I chose to do this in segments because of the length of the explanation.
Last edited on Thu Sep 18th, 2008 05:39 pm by Bixby
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