News-Record.com

(I'm waiting for the shallow sarcasm: "OH THE HUMANITY" )

Do these things surprise anyone? Our government is controlled by big business, pure and simple. We, the people, are screwed.

"It seems to be OK to save the “fat cats” of our country but not the shrinking, burdened and uninsured middle-class Americans."

That's not the American way, but that IS the Republican way.

It seems that the fat cats of Fannie Mae were Democrats, not Republicans; Franklin Raines, Jim Johnson, and Jamie Gorelick.

The Republicans sponsored legislation in 2005 that would have significantly improved regulation of these GSE's, and Democrats solidly against it. It was not brought to the floor because it would have failed on a a straight partisan vote. John McCain warned in 2005 that an economic crisis wold result if regulation wasn't strengthen by legislation.

Again the Democrats remain blameless, BS.

Do a little research on who pushed for these sub prime and worthless loans. I think you'll find a lot of your favorite Democrats and their cronies behind it.
Try finding ACORN's connection to all of this mess.

This mess didn't pop up overnight you know.

Now our government steps in to save these institutions at a cost of at least $1 trillion.

"Granted, it’s necessary to save us from a repeat of the 1929 stock market crash, but believe it or not, this also is socialism."

I believe it, so don't do it!

Great article Freddie!

It underlines the fact that "socialism" can be used as a prejorative by republicans when referring to basic social needs of the average person like health care, education or any number of other issues, but then when they need it for their failed policies and vison, they conviently change the definition to suit them and their political purposes.

The newest version of republicanism is deft at changing meaning on a dime and calling something the exact opposite of what it really is. Black is white, up is down, same policies = reform.....it goes on and on.

Notice the Republican straw-man arguments popping up everywhere? It's the Democrats' fault because in 2005, McCain was somewhere in Washington when someone else introduced some sort of legislation to try and sieze control of Fannie Mae to PREVENT regulation proposed in 2001,2002,2003,2004 and 2005 by the Democrats from being enacted.

So the Dems opposed handing FNMA over to Treasury (who by the way is run by Goldman Sachs crony and crook Hank Paulson) so that GWB can sieze further power of our financial system. But it was Republicans who voted consistently as directed by lobbyists and the CROOKS IN THEIR ADMINISTRATION (Paulson and Bernanke) to deregulate, underenforce and understaff enforcement saying "The Market Knows Best".

So the Markets have rendered their verdict and the Republican whiny victims are now asking for MY KIDS COLLEGE MONEY so they won't miss payments on their frigging yachts.

I want you to understand that I think the Dems are a bunch of stinkers, but I am not going to let Republicans shove off their responsibility here. They are always pointing fingers and saying how America is a nation of whiners and needs to stand up and take responsibility but when the barrel is pointed the other way they whine and squirm. They are like the bully on the playground who finally gets thrashed and runs and tells the teacher.

You said it, Verelse. I am ready to see what will happen with a change at the White House, and I hope in Congress...not voting for any incumbents.

Forgot to point out the obvious; Republicans controlled the Senate in 2005 and are the ones that blocked a floor vote, McCain himself was not involved nor did he sponsor or recommend the bill to anyone.

Ever curious, yesterday I watched Shuford’s recommendation of a " brilliant" video called:
BURNING DOWN THE HOUSE: What Caused Our Economic Crisis?
http://www.youtube.com/watch?v=1RZVw3no2A4&feature=iv&annotation_id=even

I then consulted with Bernanke and others. Here’s a blow-by-blow ring-side account:

CAVEAT 1: This is a bit of a re-write of recent and personal research and posts.

CAVEAT 2: Because this is personal research, I ENCOURAGE responses and critique. You have a comment or (hopefully) correction? Go to the source: Cybernalt@triad.rr.com.

==

Video Time 0:06: - I had to laugh: Con’ies citing the Fair Use Doctrine .. the same doctrine over which Con’ies have for decades been screaming, “NASTY - NASTY”.
Too funny.

Video Time 1:08: - Jimmy Carter Caused it .. I KNEW IT ..

Video Time 1:26: - “The Democrats Added Massive New Provisions”.

Not according to Ben Bernanke:

“The CRA regulations adopted in 1995 established … a new rule that allowed small banks to meet their requirements by means of a streamlined examination focused on lending activities .. reviewing the regulations in 2002 … bankers and community organizations generally agreed that the fundamental elements of the regulations were sound and that the agencies should maintain the overall structure of the 1995 regulations …”

http://www.federalreserve.gov/newsevents/speech/Bernanke20070330a.htm

After the 1995 removal of regulations, Clinton signed in 1999 the Graham-Leach-Bliley Act that removed a wall of separation between banking, insurance and brokerage activities. BTW - Phil Graham received $1,000,914 in campaign contributions from the Securities & Investment Community.

Good Republicans applaud deregulation - so why are they now whining?.

==

Video Time 2:39: “Remember the banks had to issue Sub-Prime Mortgages or pay big penalties .. “

I looked hard for to find what “required” the banks to issue Sub-Prime Mortgages or pay big penalties. Here’s what I found:

Fannie is not currently allowed to purchased bundled loans that contain an insufficient percentage of loans to low income neighborhoods (see Video Time 4:02) .. but that’s not forcing “the banks” to make stupid decisions with other people’s money. They can prosper well by cashing it quick with this g-man subsidy .. and they know it.

Rather, “Good Republicans” (and therefore “producers”) should be scorning g-man subsidies.

I think “pay big penalties” means the banks / brokers / investors would have to hold these toxic loans themselves .. take the hit direct - that how they "pay big penalties". Instead - they dump trash onto Freddie or Fannie and the American People.

==

Video Time 4:02: “Why is the expansion of the Community Reinvestment Act to blame?

It’s not. The Community Reinvestment Act is the Straw-Man Mr. Tom Shuford keeps insisting is me.

The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (also completed under Clinton) “requires Fannie Mae and Freddie Mac to meet certain affordable housing goals set annually by the Secretary of Housing and Urban Development. These goals specify the share of mortgages that the two GSEs are required to purchase annually from low-income, moderate-income and central-city homebuyers.”

Fannie Mae and Freddie Mac are required to purchase what may be subprime mortgages .. but the share .. the NUMBER as in a percentage from 0% to 100% .. is established by HUD. HUD “Mandates” .. see Video Time 2:39
http://www.ofheo.gov/about.aspx?Nav=55

WHO (WHAT) is OFHEO? See Video Time 7:14.

Who has been in charge of HUD?

http://www.hud.gov/library/bookshelf12/misc/martinezbio.cfm Jan. 24, 2001 - Dec. 12, 2003 “Under the leadership of Secretary Martinez, HUD is expanding homeownership opportunities to more Americans, particularly minority and low-income families, through innovative budget initiatives and partnerships with community-based housing providers … Secretary Martinez has brought a new commitment within HUD to those who have no home to call their own. Martinez is ensuring that the resources of the federal government work efficiently together to provide better services to the homeless, and ultimately, end chronic homelessness.”

http://www.hud.gov/about/secretary/jacksonbio.cfm Mar. 31, 2004 - April 18, 2008 “instilled a new commitment to ethics and accountability within HUD's programs and among its workforce and grant partners”

http://www.hud.gov/about/secretary/prestonbio.cfm Jun. 5, 2008 – “Secretary Preston has an extensive financial and capital markets background .. a passionate reformer who will act aggressively to help struggling Americans keep their homes, obtain affordable mortgages, as well as help ensure that all Americans have access to safe, decent, affordable housing.

YEH .. We’re in Good Hands.

==

Video Time 4:16: GEORGE TRIED TO FIX IT.

Consider instead this from an unimpeachable scoundrel (me): “Had in the Spring of 2003, GWB come out and said "We're going into Iraq [because that's how we'll capture Osama bin Laden], and we are also [going to] reshape Fannie and Freddie because they represent a different but still very real threat to the security of the United States" ... don't you think it would have sailed through?

==

Video Time 5:12: JOHN TRIED TO FIX IT ..

Baloney.

McCain said on May 25, 2006: "I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190#sMonofilemx003Ammx002Fmmx002Fmmx002Fmhomemx002Fmgovtrackmx002Fmdatamx002Fmusmx002Fm109mx002Fmcrmx002Fms20060525-16.xmlElementm0m0m0m

Sounds good, but by May 25, 2006 was 16 months after S-190 had been Introduced (1/26/2005) and 10 months after the Latest Major Action: 7/28/2005 and a couple weeks (May 12, 2006 ) after the committee sent a “Dear Colleague” letter to the leaders of the senate, including Bill Frist (R-TN) “asking that the GSE bill, S. 190, be brought to the Senate floor this year.” See Video Time 5:26

In other words, it wasn't DEAD, but it was on serious Life Support – before McCain became a co-sponsor.

http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary

MAYBE .. McCain was trying to revive it. If that is so, then it is a very poor cemonstration of his influence and my advice to him would be Bury, Baby, Bury.

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Video Time 5:26: … The Democrats Blocked It.

Absolutely not true and a bold face big ass lie.

S. 190 was approved along party lines – all it takes is s simple majority to get things out of committee. At the time (109th Congress), the make-up of the Senate Committee on Banking, Housing, and Urban Affairs was NINE DEMOCRATS: Paul S. Sarbanes (Md.), Ranking Member / Christopher Dodd (Conn.) / Tim Johnson (S.D.) / Jack Reed (R.I.) / Chuck Schumer (N.Y.) / Evan Bayh (Ind.) / Thomas R. Carper (Del.) / Debbie Stabenow (Mich.) / Robert Menendez (N.J.) and ELEVEN REPUBLICANS: Richard Shelby (Ala.), Chairman / Robert Bennett (Utah) / Wayne Allard (Colo.) / Mike Enzi (Wyo.) / Chuck Hagel (Neb.) / Rick Santorum (Pa.) / Jim Bunning (Ky.) / Mike Crapo (Idaho) / John E. Sununu (N.H.) / Elizabeth Dole (N.C.) / Mel Martinez (Fla.)

It passed the Committee. The committee tried to bring it to the Senate Floor .. but … and here’s the funny part - Senate Majority Floor Leader Bill Frist (R-TN) would not put it on the Senate agenda.

http://www.nlihc.org/detail/article.cfm?article_id=886&id=19

Why would Frist (R-TN) not put it on the Senate agenda? Perhaps because it was a mixed bag. It “contains no affordable housing fund” – so the Home Builder Lobbies were upset. It “drastically reduces allowed investments … it would require Fannie and Freddie to engage in a massive sell-off or run-down of existing holdings. [The National Association of Home Builders feels] this would disrupt the mortgage markets and greatly harm the housing finance system.”

http://www.nbnnews.com/NBN/issues/2005-08-01/Front+Page/index.html

So Senate Bill S. 190 DIED with the 109th congress.

http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary

==
Video Time 5:30: … It Came Back in 2007.

True .. re-introduced as S. 1100: Federal Housing Enterprise Regulatory Reform Act of 2007
Same Sponsor, but now McCain is conspicuously missing as a Co-sponsor.

http://www.govtrack.us/congress/bill.xpd?bill=s110-1100

==

Video Time 7:14: “Calling for Regulation of Fannie Mae Doesn’t Pay … “

Now we’re getting somewhere.

OFHEO was another Government Oversight Bureaucracy that no longer exists. Until recently it was run by James B. Lockhart, III .. nominated by President Bush and confirmed by the Senate in June 2006. He’s had two years to do something. Of course the problem was known about before Lockhart came to power

http://money.cnn.com/2005/04/04/news/fortune500/fannie.dj/

Before Lockhart there was Armando Falcon Jr. .. a Clinton appointee who .. apparently .. at least tried to reign in Fannie and Raines.

“[An] investigation of Fannie Mae [under Falcon’s tenure] resulted in the proverbial heat being turned up in the kitchen. Sen. Christopher S. Bond (R-Mo.) -- who, as chairman of a Senate Appropriations subcommittee, has jurisdiction over OFHEO's budget -- tried to withhold $10 million of the agency's funds until Falcon was replaced.

http://www.washingtonpost.com/wp-dyn/articles/A30436-2004Dec27.html

Here’s a note from someone BEGGING Armando to kiss Fannie Mae’s ass:

http://www.ofheo.gov/Media/Archive/docs/regs/rbcamend/6sdhda.pdf

One more note: OFHEO was also suppose to be “Prohibiting excessive executive compensation” .. so perhaps Raines should .. oh never mind.

==

Video Time 8:13: “A Bad Government Regulation that Made Main Street Banks Become Predatory Lenders”.

Bull Feathers. See Video Time 2:39.

Bernanke also refers us to http://www.urban.org/UploadedPDF/311418_Second_Housing_Boom.pdf:

“Both presidents Bill Clinton and George W. Bush have engaged in significant cheerleading for the growth in homeownership. At this point most of the cheerleading has been from the bully pulpit, since there has been very little new federal money behind the growth in homeownership.”

REPEAT: cheerleading … “most of the cheerleading has been from the bully pulpit.”
REPEAT: cheerleading … “little new federal money behind the growth in homeownership.”

Bernanke continues: “Several factors opened up housing markets. One clear factor is the disappearance of usury laws against unreasonable or excessively high interest rates … Many new mortgage brokers and subprime lenders have emerged .. Financial regulation of these new entities is a good deal less stringent than for the traditional banking sector … the 1977 Community Reinvestment Act (CRA) .. encouraged banks to make low- and moderate-income mortgage loans in redeveloping areas. To their surprise, banks often found these loans to be profitable.”

There’s that word again “encouraged” ..

==

END OF THE OFFICIAL JDR REPORT .. Which ANSWERED Two QUESTIONS:

QUESTION: What “required” the banks to issue Sub-Prime Mortgages or pay big penalties.
Answer: Nothing – or as Mona Lisa Vito said in My Cousin Vinnie, “It’s a Bull Shit Question”.

QUESTION: What “required” the Wall Street Guru’s to do stupid things with other people’s money?

Answer: Greed, pure and simple, enabled by the Freddie and Fannie system. HUD (who’s secretary is appointed by and reports to the Administration) had Tools Available to get this under Control (remember HUD’s job was to established the Sub-Prime Quotas available for Fannie / Freddie absorption), but those tools were simply not used.

Wow, JDR, may I write you in for President. But then, you research things, back them up with facts...no way you will win, but you have my vote.

Does the statement, United We Stand, Divided We Fall, ring a bell to anyone. Again the big guys have us little guys swinging at each other while they laugh all the way to the bank. What a sad state of affairs.

JDR

Like can you summarize that for us! Can you at least throw some humor or are you losing your talent. This reminds me of a college class and all you want to do is survive long enough for the keg party. Do you ever breath!

Response to LTE,

Off to another smaller point, many books will be written concerning this melt down, but one important event that will be part of this will the 2004 SEC action to allow the investment banks to have less of their reserves to cover debts, allowing for a 1 to 33 on equity to debt ratio. This was done to allow the investment banks to leverage like hell, including throwing in their mother for the goal of making big cash. Lehman Brothers, Bear Sterns, and others could not cover their financial obligations with the housing down turn, and the card game was over. GWB administration looked the other way. This is like buying a home with 1% down.

It is not about he said she said, or when the baby was born ie Reagan, Carter, Clinton, it is about an irresponsible administration supported by an irresponsible party, held by the gun of the religious idealogues. Where is the best of the Republican party, left on the tracks as the party was hijacked!

I do expect better results with the Democrat team. McCain had a message and a time, and it was eight years ago. He would have been recongized as a great leader. His party could not handle "reform" and still can not!

You Rock JDR. No Republican reponses yet? Hmmmm...
If a Republican whines in a forest and no one is there to hear it does it still sound like sniveling?