Wall Street melt-downs? Banking industry bailouts? Hedge fund hanky-
panky?
Multi-million dollar Wall Street bonuses? Collapse of the dollar?
National
debt default? Economic collapse?
---
call a dem or repub for a bailout ... their ability to take from
Americans is limitless
On Jan 3, 3:51 pm, Travis <baconl...@gmail.com> wrote:
> This fits right in with the "Repo Man" article.
>
> http://newmediajournal.us/indx.php/item/4050
>
> *What Every American Should Know*
>
> Paul R. Hollrah
> January 3, 2012
>
> Wall Street melt-downs? Banking industry bailouts? Hedge fund hanky-panky?
> Multi-million dollar Wall Street bonuses? Collapse of the dollar? National
> debt default? Economic collapse? Who can possibly make sense of it all? How
> did it happen, and who's to blame? Did George W. Bush create the mess and
> leave it for Obama to clean up, or were Democrats to blame all along and
> Obama was just too incompetent to know what to do about it? What is the
> truth of all this?
>
> Now that the Securities & Exchange Commission is finally pursuing
> wrongdoing at Fannie Mae and Freddie Mac, it's time the American people
> knew the root causes of our current economic difficulties. We all need to
> have a basic understanding of the mess...one that will allow us to explain
> it to our Democrat friends in terms that even they can understand.
>
> First, it must be said that the Community Reinvestment Act (CRA), a Carter
> administration initiative, was not a totally bad idea. It encouraged
> lenders to make loans to qualified borrowers who had previously been denied
> solely on the basis of the color of their skin. The CRA was intended to
> reduce or eliminate a practice known as "redlining," in which realtors and
> lenders discriminated against potential buyers in low-income and depressed
> neighborhoods, approving home loans for lower-income whites but not for
> middle or upper-income blacks.
>
> Throughout the Reagan and Bush (41) years, between 1981 and 1993, the CRA
> was enforced in a straightforward manner. Lenders were encouraged to
> abandon the "redlining" practice and to meet the credit needs of all
> members of the community, consistent with sound lending practices.
>
> However, when Democrats regained control of the White House in 1993, in the
> person of Bill Clinton, Democrats began to act like Democrats. They decided
> that the CRA, if strategically enforced with a political end in mind,
> provided a unique opportunity to purchase the votes of those at the lower
> end of the economic ladder.
>
> Under the Clinton administration, regulators paid particularly close
> attention to the lending practices of banks and savings & loan
> associations. In other words, were lenders meeting the credit needs of all
> borrowers in their local communities, regardless of borrowers' ability to
> repay their loans? Accordingly, they began to use the results of those
> examinations to determine whether or not to approve mergers and
> acquisitions, and whether or not to approve applications for new branch
> banks. Lenders soon found that the CRA was more stick than carrot.
>
> As a result, lenders abandoned traditional lending criteria and made
> mortgage loans to almost anyone who applied, regardless of their income
> level or credit worthiness. Under normal circumstances, no prudent lender
> would ever lend money to those with little or no ability to repay, but
> these were not normal circumstances. Two of the Democratic Party's favorite
> patronage cesspools...Fannie Mae and Freddie Mac...were standing ready to
> buy up any and all mortgages. And why should Fannie and Freddie worry about
> the quality of the mortgages they bought? They had no reason to worry
> because, as quasi-public institutions, they had the cash assets of the
> American taxpayer...the U.S. Treasury...at their disposal.
>
> Here's how it worked. When a home buyer took out a home loan from a bank or
> a savings & loan association, the mortgage was then sold to what was known
> as a Government Sponsored Enterprise (GSE), i.e. Fannie Mae or Freddie Mac.
> Fannie and Freddie then bundled the loan with other sub-prime mortgages and
> sold the bundle to private investors...promising not only attractive
> returns, but a high degree of security as well. By year end 2010, Fannie
> and Freddie had acquired more than half of the $11 trillion mortgage loan
> market in the United States.
>
> However, the sale of mortgages to private investors was not a totally
> arms-length proposition because, even though Fannie and Freddie had sold
> the bundled mortgages, they continued to have a financial interest in them.
> They guaranteed the securities for the investors, promising to continue
> making payments on the mortgages even if the homeowner stopped paying. In
> 2008, when the overheated real estate market collapsed and a great many
> homeowners stopped paying all at once, the cash reserves of Fannie and
> Freddie were soon depleted, forcing them to default on their guarantees and
> precipitating a major economic crisis.
>
> One might ask, how could something like this happen directly under the
> noses of our political leaders without anyone taking notice? The fact is,
> shortly after taking office in 2001, the Bush administration did notice and
> took steps to reform Fannie Mae and Freddie Mac. What they apparently
> failed to understand was that Fannie and Freddie existed in a world of
> their own, a world in which Democrats who were either owed big favors, or
> who were being paid to keep their mouths shut for one reason or another
> were well taken care of.
>
> Among these was Franklin Raines, former Clinton White House budget
> director, who served as chairman and chief executive officer of Fannie Mae.
> Raines took "early retirement" from Fannie Mae on December 21, 2004 after
> the Office of Federal Housing Enterprise Oversight (OFHEO) accused him of
> participating in widespread accounting irregularities, including the
> shifting of losses so that senior Fannie Mae executives could earn large
> bonuses. Some $90 million was paid to Raines based on overstated
> earnings...earnings initially reported at $9 billion but later found to be
> in the neighborhood of $6.3 billion.
>
> Tim Howard, Chief Financial Officer under Raines, is a former Senior
> Economic Advisor to Barack Obama. When Howard was terminated at Fannie Mae
> he walked away with a "golden parachute" reported to be worth approximately
> $20 million.
>
> Jim Johnson, a former Lehman Brothers executive who headed Obama's vice
> presidential search committee, is also a former Fannie Mae CEO who was
> forced to resign. Johnson's 1998 Fannie Mae compensation was reported at
> between $6-7 million. In truth, it was $21 million.
>
> And last, but not least, we have former Deputy Attorney General in the
> Clinton administration, Jamie Gorelick, the woman who erected the infamous
> "Gorelick Wall" which prevented the CIA and the FBI from sharing
> intelligence that could have prevented the 9/11 attacks on the World Trade
> Center and the Pentagon. After leaving the Justice Department she
> resurfaced as Vice Chairman of Fannie Mae from 1997 to 2003. And although
> she had no training or experience in finance, whatsoever, during the six
> years she worked at Fannie Mae she earned over $26 million.
>
> While serving as Vice Chairman of Fannie Mae, Gorelick participated in the
> development of an accounting scheme which allowed Fannie's Mae's top
> executives – whose bonuses were tied to earnings-per-share – to meet the
> target for maximum bonus payouts. For example, in 1998 the target earnings
> for maximum bonus payout at Fannie Mae was $3.23 per share. Fannie Mae
> reported earnings of exactly $3.2309. (Don't you just hate it when that
> happens?)
>
> So how was this arranged? Because of lower interest rates in 1998, Fannie
> Mae found itself facing an extraordinary expense estimated at $400 million.
> Johnson, Franklin, and Gorelick decided to recognize only $200 million of
> the $400 million expense, deferring the remainder to the next fiscal year.
> This fortuitous "coincidence" resulted in maximum bonus payouts: $1.932
> million to then-CEO Jim Johnson, $1.19 million to CEO-designate Franklin
> Raines, and $779,625 to accounting whiz Jamie Gorelick.
>
> Democrats do have an uncanny way of taking care of their own.
>
> In the 2 years and 11 months that Barack Obama has been in office,
> Democrats have waged an uninterrupted and unabashed attack on George W.
> Bush, insisting that he did nothing to forestall the Fannie and Freddie
> disasters that we now face. However, the facts are these: The Bush
> administration warned Congress of impending insolvency at Fannie Mae and
> Freddie Mac in April 2001, May 2002, November 2003, February 2004, August
> 2007, December 2007, March 2008, April 2008, May 2008, and June 2008. In
> addition, officials of the Bush administration testified before Congress,
> calling for reform of Fannie and Freddie, in September 2003, June 2004,
> April 2005, and February 2008.
>
> In each instance, their warnings were either ignored or were subjected to
> strong push-back from leading Democrats, who charged Republicans with
> opposing home ownership by the poor and minorities. In each instance, the
> principal push-back came from Senator Chris Dodd (D-CT), Chairman of the
> Securities and Investment Subcommittee of the Senate Banking Committee, the
> recipient of major "sweetheart" loans from now-defunct Countrywide
> Financial Corporation; and Rep. Barney Frank (D-MA), Ranking Member of the
> Housing and Community Opportunity Subcommittee of the House Financial
> Services Committee. Not surprisingly, one of Frank's homosexual partners,
> Herb Moses, was a high-ranking official of Fannie Mae at a time when he and
> Frank played house together on Capitol Hill.
>
> In short, the financial crisis that our country now faces is exclusively
> the product of Democratic political excess. It is further proof that, when
> government interferes in the private economy in order to guarantee what
> liberals and Democrats see as "fairness" and "equal outcomes," the
> unintended consequences are always predictable, but never pretty. What
> would be pretty would be to see Christopher Dodd, Barney Frank, Franklin
> Raines, Jim Johnson, Jamie Gorelick, and other Obama cronies being led away
> in handcuffs. The current charges being investigated by the Securities &
> Exchange Commission are a good beginning.
--
Thanks for being part of "PoliticalForum" at Google Groups.
For options & help see http://groups.google.com/group/PoliticalForum
* Visit our other community at http://www.PoliticalForum.com/
* It's active and moderated. Register and vote in our polls.
* Read the latest breaking news, and more.
