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The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

Archive for the ‘Mortgage Crisis’ Category

Karl Rove on the mortgage crisis, whats to be done, and Roland Burris.

Posted by iusbvision on February 19, 2009

This is a rather excellent interview from Bill O’Reilly.

Sallee Comments:

This is all known, but the left wing media [elite media culture as we say here] refuses to report it. They are protecting Dodd and Frank, as they blame Bush. Maxine Waters, Meeks, Schumer and the rest of them are also guilty. Now you know why the left want to silence and censor talk radio and the Internet, they want to prevent the truth from coming out at all costs.

Not exactly how I would have worded it, but it is essentially accurate. Before you comment, no, Fox is not a part of the elite media culture.

Posted in Chuck Norton, Government Gone Wild, Journalism Is Dead, Mortgage Crisis | Leave a Comment »

CNBC Host: Time for a New Tea Party; Chicago Trade Floor Mocks Obama Plan!

Posted by iusbvision on February 19, 2009

UPDATE – Santelli rocking on the Today Show – Santelli’s Mortgage Plan is the same plan we have been pushing at IUSB Vision. Video HERE. Santelli explains what needs to be done in more detail HERE.

If we are going to help people out with the mortgage crisis, we need a plan that helps everybody, not just constituent groups who got houses they could never afford or rich yuppies who got caught “flipping” 2 or 3 houses and got over extended.

The anger and anxiety in the country is rising and people are starting to realize that Obama and the Democrats are letting us down already with the stimulus and now the mortgage plan.

Santelli wasn’t kidding. The Tea Party is on – http://www.facebook.com/event.php?eid=68704930659&ref=share#/event.php?eid=68704930659&ref=share

CNBC Official Video HERE.

Posted in Chuck Norton, Government Gone Wild, Mortgage Crisis, Obama and Congress Post Inaugration | Leave a Comment »

Its Criminal – Tax Breaks for Home Buyers Dropped in Porkulus

Posted by iusbvision on February 12, 2009

Help for the suffering housing market slashed so the Democratic leader can get more pork.

Is this the change you voted for????

Via Ed Morrissey at Hotair.com:

Thanks to a sleazy back-room deal between Barack Obama and Harry Reid, the city least in need of government bailouts will get a $8 billion pork project in the final version of Porkulus.  Now Southern California residents can have another way to lose their money, and we can all pay for the ride:

In late-stage talks, Obama and Senate Majority Leader Harry Reid, D-Nev., pressed for $8 billion to construct high-speed rail lines, quadrupling the amount in the bill that passed the Senate on Tuesday.

Reid’s office issued a statement noting that a proposed Los Angeles-to-Las Vegas rail might get a big chunk of the money.

And what got cut to ensure Reid’s pork bonanza?

To tamp down costs, several tax provisions were dropped or sharply cut back. A provision popular with Republicans and the big business lobby that would have awarded about $54 billion to money-losing businesses over the next two years was instead limited to small businesses, greatly reducing its cost.

A $15,000 tax credit for anybody buying a home over the next year was dropped; instead, first-time homebuyers could claim an $8,000 credit for homes bought by the end of August. Car buyers could deduct the sales tax they paid on a new car but not the interest on their car loans.

Posted in Chuck Norton, Government Gone Wild, Mortgage Crisis, Obama and Congress Post Inaugration | Leave a Comment »

Awesome: Informative and Entertaining Stimulus Video

Posted by iusbvision on February 11, 2009

I loved it, so will you. – This video also tells you step by step – in a fun way, how to fix the housing industry. Any good student of economics can tell you how to do it, so why isn’t Washington even addressing it seriously?

When there are a ton of foreclosures, too much supply, low consumer confidence resulting in low demand how do you fix it – you raise the demand. How do you do that? – Watch this video.

Posted in Chuck Norton, Government Gone Wild, Mortgage Crisis, Obama and Congress Post Inaugration | Leave a Comment »

Government to spend 9.7 Trillion in bailouts. Enough to pay off 90% of all mortgages. – UPDATE: 12.8 Trillion

Posted by iusbvision on February 9, 2009

But I don’t think you and I will see a dime.

Maybe I should go to work for ACORN (you remember these guys, the vote fraud people) as they are getting 4.1 billion in this porkulus bill.

Bloomberg News:

U.S. Taxpayers Risk $9.7 Trillion on Bailout Programs
By Mark Pittman and Bob Ivry

Feb. 9 (Bloomberg) — The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.

The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent almost $3 trillion over the past two years and pledged up to $5.7 trillion more. The Senate is to vote this week on an economic-stimulus measure of at least $780 billion. It would need to be reconciled with an $819 billion plan the House approved last month.

So almost all of us could have had our mortgaes paid off, no one would have had to lose their home, yet while banks are spending billions in our bailout money to buy each other up, how much of that money have you gotten, how much has given you more security, how much has helped you keep your home?

9.7 Trillion…… poof ….. granted not all of it is spent yet, but are you holding your breath?

Is there a better example that shows why government spending doesn’t work? They should have just given us the money or let you keep more of your own.

It would have been cheaper to suspend all taxes for eight months. Imagine what you could have done with that extra money. The middle class and the poor have been shafted again.

UPDATE:

I am watching Obama talk this evening and it is clear that he has decided to just lie about what is in the porkulus bill and lie about the Republican’s and 11 Democrats reasons for opposing it. Obama is saying that those people just philosophically believe that the government should do nothing.

I have watched this bill and the debate very closely and I have not seen anyone say that the government should do nothing. Some have said that doing nothing is better than THIS bill. As we have reported earlier Obama’s own CBO says that this bill will lower the GNP over time. Its a bad bill.

One great idea that has been proposed us to cut taxes in half for the first $30,000 of income for everyone. That would free up money in the economy now and raise consumer spending now which is good for jobs. That kind of policy has worked every time it has been tried. This bill doesn’t do that.

Obama said in this evening press conferance this is the worst economy since the great depression. This is also not true. The recession of 73 was worse, remember misery index and all that under Carter? The recession of 1981 was also worse. The numbers are well published for anyone who would like to look it up.

For those who are new just click the “Government Gone Wild” category link below or the “Obama and Congress” category link to see our previous coverage of the junk and payoffs and corruption that is what this bill is.  

Here is a great article with a video that explains what happend to cause this mess in a very brief yet intelligent manner. Read it – https://iusbvision.wordpress.com/2008/10/23/one-honest-democrat-journalist-finally-tells-the-truth-about-who-caused-the-mortgage-crisis/#comment-19370

UPDATE II – April 1. Bloomberg News now reports 12.8 trillion.

March 31 (Bloomberg) — The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.

New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008.

Posted in Chuck Norton, Government Gone Wild, Mortgage Crisis, Obama and Congress Post Inaugration | 1 Comment »

Democrats (and Hank Paulsen) promised to buy at risk mortgages – Almost 2 Trillion spent and it didn’t happen.

Posted by iusbvision on February 3, 2009

UPDATE II – Senate Republicans are pounding this issue and are trying to get some housing fixes in the bill. This is a good thing, but why does it seem that Republicans in Congress only want to do the right thing with domestic policy when they are out of power?

UPDATE – Obama Administration talks about buying up troubled mortgages, but still no action. It’s almost like this is an afterthought.

Obama’s Biggest Broken Promise

Editorial by Chuck Norton

This may prove to be one of the greatest political blunders of all time and president Obama’s approval numbers are falling fast. While Obama has reversed himself on lobbyist reform, CIA prisons, coerced interrogation and warrantless wiretapping, no broken promise seems to have the potential energy as this.

Peggy really believed what the campaign told her as you can see:

Democrats have controlled Congress since 2006. They have been in power there for two years. Congress wrote the first $700 Billion bailout on the promise that the government would buy at risk loans and take the time to renegotiate the loans with citizens who were impacted by the mortgage scandal. The money was spent and while Wall Street exec’s are taking vacations and handing out billions in bonuses to themselves with our money, the people with the bad mortgages did not get the promised relief.

The plan to buy up bad mortgages might have worked. The government can afford to buy the time needed to get this money back once the economy recovers whereas most private banks can’t. It seems that now we will never know if this plan can work because it doesn’t look like it has even been seriously tried. I am beginning to suspect that the primary goal of the bailout and mortgage plan is NOT toxic asset relief.

Congress is about to spend another trillion in a so-called stimulus package, which has ended up being nothing more than a payoff for the constituent groups who helped the Democrats get elected and no one is even talking about getting this done in the Senate version of the bill. The average voter and homeowner who was promised relief or at least some time to recover got fooled again. They got elected, are spending two trillion of our money, and we have nothing to show for it.

This brings us to the sad reality of racial politics. Many people voted for the Democrats because they wanted to see the first man of color in the White House. Due to destructive legislation such as the Community Reinvestment Act (pushed by Democrats) that targeted black Americans for these reckless loans (sub primes etc) the black community has been disproportionately affected by this crisis. Like Peggy, they believed the promises and have nothing to show for it.

I hope that the American people remember this come election day and Republicans better be watching this mindfully. If Republicans in Congress don’t start delivering on their promises of less intrusive, smaller and smarter government as they did in the 90’s it will leave an opening for a third-party that this country hasn’t seen in 100 years.

My fellow Americans, we need to stop behaving like this:

Posted in Chuck Norton, Government Gone Wild, Journalism Is Dead, Mortgage Crisis, Obama and Congress Post Inaugration | Leave a Comment »

Plot to Destroy All Fannie Mae Computer Data Foiled

Posted by iusbvision on January 30, 2009

I am sure that this has nothing to do with the fact that they gave $200 million to partisan interests (and that was your money folks), with the vast majority going to Democrats and Barack Obama taking the second highest amount of money from them in the Senate. Nope, I am certain the timing of this is a complete coincidence ../nods…..

URBANA, Md. (AP) – The Justice Department says it foiled a plot by a fired Fannie Mae contract worker in Maryland to destroy all the data on the mortgage giant’s 4,000 computer servers nationwide.

The U.S. Attorney’s Office says 35-year-old Rajendrasinh Makwana, of Glen Allen, Va., is scheduled for arraignment Friday in U.S. District Court in Baltimore on one count of computer intrusion.

http://www.breitbart.com/article.php?id=D961I79O0&show_article=1

Posted in Campaign 2008, Chuck Norton, Government Gone Wild, Mortgage Crisis, Obama and Congress Post Inaugration | Leave a Comment »

One Honest Democrat Journalist Finally Tells the Truth About Who Caused the Mortgage Crisis.

Posted by iusbvision on October 23, 2008

[Mr. Card makes the same case about the mortgage crisis that we did last month. All you doubters sending us the hate mail are eating crow on this one. This report is so accurate it is as if he obtained the information from the IUSB Vision. A journalist gets the story RIGHT and THATS news….pathetic state of affairs journalism is in isn’t it? – Editor]

Would the Last Honest Reporter Please Turn On the Lights?
By Orson Scott Card

http://www.ldsmag.com/ideas/081017light.html

Editor’s note: Orson Scott Card is a Democrat and a newspaper columnist, and in this opinion piece he takes on both while lamenting the current state of journalism.

An open letter to the local daily paper — almost every local daily paper in America:

I remember reading All the President’s Men and thinking: That’s journalism.  You do what it takes to get the truth and you lay it before the public, because the public has a right to know.

This housing crisis didn’t come out of nowhere.  It was not a vague emanation of the evil Bush administration.

It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people.  Fannie Mae and Freddie Mac were authorized to approve risky loans.

What is a risky loan?  It’s a loan that the recipient is likely not to be able to repay.

The goal of this rule change was to help the poor — which especially would help members of minority groups.  But how does it help these people to give them a loan that they can’t repay?  They get into a house, yes, but when they can’t make the payments, they lose the house — along with their credit rating.

They end up worse off than before.

This was completely foreseeable and in fact many people did foresee it.  One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules.  The other party blocked every such attempt and tried to loosen them.

Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans.  (Though why quasi-federal agencies were allowed to do so baffles me.  It’s as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.)

Isn’t there a story here?  Doesn’t journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout?  Aren’t you supposed to follow the money and see which politicians were benefiting personally from the deregulation of mortgage lending?

I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal.  “Housing-gate,” no doubt.  Or “Fannie-gate.”

Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed.

As Thomas Sowell points out in a TownHall.com essay entitled “Do Facts Matter?” ( http://snipurl.com/457townhall_com] ): “Alan Greenspan warned them four years ago.  So did the Chairman of the Council of Economic Advisers to the President.  So did Bush’s Secretary of the Treasury.”

These are facts.  This financial crisis was completely preventable.  The party that blocked any attempt to prevent it was … the Democratic Party.  The party that tried to prevent it was … the Republican Party.

Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing the crisis, you in the press did not hold her to account for her lie.  Instead, you criticized Republicans who took offense at this lie and refused to vote for the bailout!

What?  It’s not the liar, but the victims of the lie who are to blame?

Now let’s follow the money … right to the presidential candidate who is the number-two recipient of campaign contributions from Fannie Mae.

And after Freddie Raines, the CEO of Fannie Mae who made $90 million while running it into the ground, was fired for his incompetence, one presidential candidate’s campaign actually consulted him for advice on housing.

If that presidential candidate had been John McCain, you would have called it a major scandal and we would be getting stories in your paper every day about how incompetent and corrupt he was.

But instead, that candidate was Barack Obama, and so you have buried this story, and when the McCain campaign dared to call Raines an “adviser” to the Obama campaign — because that campaign had sought his advice — you actually let Obama’s people get away with accusing McCain of lying, merely because Raines wasn’t listed as an official adviser to the Obama campaign.

You would never tolerate such weasely nit-picking from a Republican.

If you who produce our local daily paper actually had any principles, you would be pounding this story, because the prosperity of all Americans was put at risk by the foolish, short-sighted, politically selfish, and possibly corrupt actions of leading Democrats, including Obama.

If you who produce our local daily paper had any personal honor, you would find it unbearable to let the American people believe that somehow Republicans were to blame for this crisis.

There are precedents.  Even though President Bush and his administration never said that Iraq sponsored or was linked to 9/11, you could not stand the fact that Americans had that misapprehension — so you pounded us with the fact that there was no such link.  (Along the way, you created the false impression that Bush had lied to them and said that there was a connection.)

If you had any principles, then surely right now, when the American people are set to blame President Bush and John McCain for a crisis they tried to prevent, and are actually shifting to approve of Barack Obama because of a crisis he helped cause, you would be laboring at least as hard to correct that false impression.

Your job, as journalists, is to tell the truth.  That’s what you claim you do, when you accept people’s money to buy or subscribe to your paper.

But right now, you are consenting to or actively promoting a big fat lie — that the housing crisis should somehow be blamed on Bush, McCain, and the Republicans.  You have trained the American people to blame everything bad — even bad weather — on Bush, and they are responding as you have taught them to.

If you had any personal honor, each reporter and editor would be insisting on telling the truth — even if it hurts the election chances of your favorite candidate.

Because that’s what honorable people do.  Honest people tell the truth even when they don’t like the probable consequences.  That’s what honesty means .  That’s how trust is earned.

Barack Obama is just another politician, and not a very wise one.  He has revealed his ignorance and naivete time after time — and you have swept it under the rug, treated it as nothing.

Meanwhile, you have participated in the borking of Sarah Palin, reporting savage attacks on her for the pregnancy of her unmarried daughter — while you ignored the story of John Edwards’s own adultery for many months.

So I ask you now: Do you have any standards at all?  Do you even know what honesty means?

Is getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for?

You might want to remember the way the National Organization of Women threw away their integrity by supporting Bill Clinton despite his well-known pattern of sexual exploitation of powerless women.  Who listens to NOW anymore?  We know they stand for nothing; they have no principles.

That’s where you are right now.

It’s not too late.  You know that if the situation were reversed, and the truth would damage McCain and help Obama, you would be moving heaven and earth to get the true story out there.

If you want to redeem your honor, you will swallow hard and make a list of all the stories you would print if it were McCain who had been getting money from Fannie Mae, McCain whose campaign had consulted with its discredited former CEO, McCain who had voted against tightening its lending practices.

Then you will print them, even though every one of those true stories will point the finger of blame at the reckless Democratic Party, which put our nation’s prosperity at risk so they could feel good about helping the poor, and lay a fair share of the blame at Obama’s door.

You will also tell the truth about John McCain: that he tried, as a Senator, to do what it took to prevent this crisis.  You will tell the truth about President Bush: that his administration tried more than once to get Congress to regulate lending in a responsible way.

This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats leading the way into the crisis and blocking every effort to get out of it in a timely fashion.

If you at our local daily newspaper continue to let Americans believe — and vote as if — President Bush and the Republicans caused the crisis, then you are joining in that lie.

If you do not tell the truth about the Democrats — including Barack Obama — and do so with the same energy you would use if the miscreants were Republicans — then you are not journalists by any standard.

You’re just the public relations machine of the Democratic Party, and it’s time you were all fired and real journalists brought in, so that we can actually have a news paper in our city.

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis | 3 Comments »

W Ketchup Company Demands Obama Return Fannie Mae Contributions

Posted by iusbvision on October 7, 2008

FOR IMMEDIATE RELEASE
For media inquiries contact Bill Zachary (917) 733-3038
 

W Ketchup Demands Obama Return Fannie Mae Contributions

Eagle Bridge, NY — October 7, 2008 — In 1977, President Jimmy Carter signed the Community Reinvestment Act to force banks to lend money to low income communities. In 1995, President Clinton dramatically expanded the Act, requiring greater lending to low income, inner city populations, and allowing radical community groups to exact fees from banks for marketing these risky loans. The quasi-government institutions Fannie Mae and Freddie Mac bought many of these loans from local banks, repackaged them, and sold them to Wall Street firms.

In 1999, after the Clinton expansion of the Act had taken effect, Steven A. Holmes wrote: “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.” Last month Congress bailed out Fannie and Freddie at a potential taxpayer cost of $200 billion.

Bill Zachary, Chairman of W Ketchup, commented: “It should not be any wonder that a housing bubble occurred as Congress forced banks to make risky loans and Greenspan lowered interest rates to 1.25%. Politicians have blamed Wall Street greed for this financial crisis, but on Wall Street greed is balanced by fear, and the market soon erases excesses. For Washington politicians, greed has no restraint since Congress can confiscate money from taxpayers at will.”

President Bush twice tried to restrict the dangerous lending banks were required to make under the Act, and in 2005 Senator John McCain proposed reform legislation. Democrats blocked the reform efforts. The New York Times defended the Act saying: “Since its inception, the law has prompted banks to channel more than $1 trillion into [low income areas] — without requiring a single dollar of Congressional spending.” Last Friday Congress passed a $700 billion rescue measure to bail out financial markets hurt by the housing mess.

Dan Oliver, CEO of W Ketchup, reacted: “Modern socialists believe government need not own the commanding heights of enterprise, but instead should direct them through tax incentives and regulatory requirements. This is the ‘Third Way’ championed by President Clinton and the UK’s Tony Blair. But socialism in any form produces the same results: poverty and misery. Leftists like Big Tuna Pelosi blame the current financial panic on free markets. In reality, while markets are not perfect and there exist individual cases of predatory fraud, market distortions perpetrated by liberals created the magnitude of this crisis.”

In the 1990’s Presidential candidate Barack Obama worked for a Chicago law firm that sued banks for not issuing enough subprime loans to low income applicants. Obama also worked and raised money for ACORN, a radical, left-wing community group that coerced banks to make risky loans by intimidating the families of bankers at their homes. The Senate Banking Committee has estimated that $9.5 billion in “commissions” have gone to groups like ACORN under the Community Reinvestment Act. Since he began his run for Congress, Barack Obama has received $126,349 in campaign contributions from Fannie Mae and Freddie Mac, becoming the second highest recipient of any Congressman in three short years.

Obama’s closest advisors include Jim Johnson, former Fannie Mae CEO who misreported his $21 million bonus as $6 million, and Franklin Raines, another former CEO of Fannie Mae who faced civil charges for overstating the company’s earnings in order to receive $52 million in bonus, in addition to his $38 million in pay.

Dan Oliver added: “We call on the government to recover the multi-million dollar payments to Obama’s advisors under the principles of common law fraud and breach of fiduciary duty. We further call on Obama to return the contributions from Freddie and Fannie, money that rightfully belongs to American taxpayers. Finally, we call for the repeal of the Community Reinvestment Act so markets can return to their function of efficiently allocating capital.”

During the ten years after the market crash of 1929, a Democratic Congress and President created the regulatory state, tripled federal spending, and sharply restricted trade, turning a short-term financial panic into the Great Depression. Senator Obama has promised to expand regulations on large sections of the American economy, has promised nearly $1 trillion in new government spending, and has proposed renegotiating trade agreements, if elected President.

Posted in Mortgage Crisis, Other Links | Leave a Comment »

McCain FINALLY unloads on Obama’s record with Fannie Mae and the “It’s Republican’s deregulation” lie.

Posted by iusbvision on October 6, 2008

It’s about darn time.  

McCain tells how Obama and the Democrats blocked reforms that would have fixed this. He should have been doing this weeks ago. McCain finally calls Obama out as a liar for saying that it was McCain and the Republicans who resisted regulation of Fannie Mae. The record shows the truth that Republicans tried to fix this problem over and over and over again and were blocked by Democrats, as we have shown in detail in a series of articles, packed with evidence, about every facet of this story HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE ….. but if you had to read just ONE of those articles I suggest THIS ONE as it gives the best synopsis with all the evidence you need to be certain.

Hat tip Hotair.com for the video link.

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis, Other Links, Palin Truth Squad | Leave a Comment »

SHOCKER: OBAMA SAID IN 2007 THAT GIVING SUB-PRIME LOANS TO PEOPLE WHO COULD NOT PREVIOUSLY AFFORD THEM WAS A GOOD IDEA!!!

Posted by iusbvision on October 5, 2008

We told you before how Obama sued banks with so called “community organizers” to force the banks to give bad loans to people who couldn’t afford them. Well now we have the audio of Obama saying in 2007 that giving sub-prime loans to people who couldn’t afford them is a good idea.

Click HERE to listen to the audio and get the story!

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis, Other Links | Leave a Comment »

Mike Oxley – Another Congressman Trying to Lie His Way Out of Blame for the Mortgage Crash

Posted by iusbvision on October 5, 2008

 

Mike Oxley (R-OH)

Mike Oxley (R-OH)

Former Republican Representative Mike Oxley shares some responsibility for the mortgage crisis and he is trying to lie his way out of his role in what appears to be an attempt to preserve his legacy and his future income.

Oxley has a mixed record, and as we have reported before, to his credit he did try to end the corruption with Fannie Mae and Freddie Mac and he did try to get some more effective oversight of it. We wrote about the mortgage crisis in detail (links below). 

So what did Representative Oxley do? To answer that question we first have to go back in time just a litle bit.

He co-wrote the now infamous Sarbanes-Oxley law which was a “response to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of the affected companies collapsed, shook public confidence in the nation’s securities markets. Named after sponsors Senator Paul Sarbanes (D-MD) and Representative Michael G. Oxley (R-OH)”.

The law had some major unintended consequences. While it did do some good such as introducing criminal penalties for executives who commit fraud. It was too costly to administrate and yielded limited results. Some of the latest corporate institutions covered by that law crashed and the Sarbanes-Oxley law not only failed to prevent it, it actually made things WORSE.

How did it make things worse you ask? The non-indexed mark to market accounting rule.

What it does, according to federal accounting rules, is artificially lower the value of an asset or security that has lost value and artificially inflates an asset’s or security’s value when the market is going up. So when these mortgage securities crashed companies had to say they were worth nothing (because no one wanted to buy them) in spite of the fact that there is a house there that has some value. This problem was a real factor in why things crashed so quickly because it lowered the liquidity rating and solvency rating of those assets artificially.

When the housing market was going up the companies holding them had their rating inflated by them, making it all look dandy on paper and when they crashed they had their rating set artificially low and the company fell below solvency standards.

Former House Speaker Newt Gingrich and many business leaders and economists asked to have this rule fixed; no one in government listened. Several analysts have stated that SEC Chairman Chris Cox could have changed this rule with the flexibility included in the bill, but in spite of the calls to fix this rule he enforced it as it was.

Instead of just owning up to a mistake, an unintended consequence, and not pushing to fix this rule when he had the chance, Oxley is now lying about what happened to the mortgage industry. And they aren’t very good lies either because after about two hours of public records searching I was able to debunk his story easily.

In the September 9, 2008 Financial Times Oxley said this:

Instead, the Ohio Republican who headed the House financial services committee until his retirement after mid-term elections last year, blames the mess on ideologues within the White House as well as Alan Greenspan, former chairman of the Federal Reserve.

The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley, now vice-chairman of Nasdaq.

He fumes about the criticism of his House colleagues. “All the handwringing and bedwetting is going on without remembering how the House stepped up on this,” he says. “What did we get from the White House? We got a one-finger salute.”

The House bill, the 2005 Federal Housing Finance Reform Act, would have created a stronger regulator with new powers to increase capital at Fannie and Freddie, to limit their portfolios and to deal with the possibility of receivership.

Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.

Adamant that the only solution to the problems posed by Fannie and Freddie was their privatisation, the White House attacked the bill. Mr Greenspan also weighed in, saying that the House legislation was worse than no bill at all.

“We missed a golden opportunity that would have avoided a lot of the problems we’re facing now, if we hadn’t had such a firm ideological position at the White House and the Treasury and the Fed,” Mr Oxley says.

Folks, the record shows that almost all of that is simply not the case.

1. Oxley reached out to Barney Frank he says..

Misleading – Frank voted no and tried to block the efforts to pass the legislation in the House and most Democrats voted no as well. In 2005 the Republicans didn’t need Democrats to pass a bill in the House but did need them to pass anything in the Senate.

2. Oxley says that Alan Greenspan opposed the reforms.

Lie – you can read Greenspan’s Congressional testimony for yourself HERE and HERE and we wrote about it HERE. Greenspan was very much in favor of the new Republican proposed regulation to fix the old regulation that was being skirted.

Alan Greenspan testimony – If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear.

3. Oxley says that the White House and the Treasury opposed reforms.

Lie. The White House and the Treasury pushed Congress many many times to get these reforms passed and each attempt is listed HERE. Excerpts:

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)

2004  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 home-ownership 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)

4. Oxley says the Legislation lacked a champion in the Senate.

Lie – Sen. Hagel, Dole, and Sununnu pushed for these reforms for years. After S.190 got hung up in the Senate because the Democrats were filibustering everything and could not get 60 votes, and the Democrats in the finance committee all voted no, John McCain became a co-sponsor to try and hammer the legislation through but no Democrats would budge. In fact Senators Sununnu, Hagel and Dole introduced this legislation repeatedly (link HERE and video HERE).

5. Oxley says that the administration wanted privatization of Fannie Mae and Freddie Mac or nothing.

Lie – Nothing in Alan Greenspan’s testimony (which is linked in its entirety above) , Secretary Snow’s testimony, Deputy Secretary Bodmon’s testimony, nor any known statement by President Bush say privatize or nothing or any such argument. All of them pushed for the reforms pushed by Dole, Hagel, and Sunnunu. In fact here is an article by “All Business” about the hearings make no mention of Republicans trying to privatize it, but they do make mention of Democrats opposing tighter regulation and accounting practices saying that it would restrict Fannie and Freddie’s mission to give low cost loans to poor people and minorities. Of course those were loans that too many of the poor could not pay back.

HERE is the record of the 2005 hearings in the House on this legislation and no one brings up the White House or a push by Republicans to push for privatization of Fannie Mae and Freddie Mac.

You can also read quotes of what Senators, Representatives and others said about Fannie Mae and Freddie Mac in hearings HERE.

So the question is, why is a former member of Congress lying through his teeth about what happend and trying to blame Bush for all this?

There are several reasons:

1. The White House has never been aggressive about defending itself from untrue allegations. They seem perfectly content with letting partisans and the elite media with little regard for the truth define them . So blaming Bush means you will get away with it and the Democrats will gleefully pile on to give credibility to the bogus claim as Barney Frank did HERE.

2. The Sarbanes-Oxley Law is his legacy and he does not want that legacy sullied with a layer of blame from the worst financial scandal in the history of the world.

3. Oxley speaks and consults for big fees about Sarbanes-Oxley compliance and if word got out that a screw up of this magnitude was a contributor to the mortgage meltdown it would certainly damage his gravy train of fees; not to mention his cushy job at NASDAQ.

UPDATE: Newt Gingrich Explains in some detail

Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE. – Editor

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis | 2 Comments »

Watch a Politician Lie & Watch O’Reilly Go Nuclear on Barney Frank

Posted by iusbvision on October 5, 2008

UPDATE: Frank now says that critisizing Congress is racist…. wow is this guy desperate or what? He says that conservatives are trying to blame blacks getting loans for the mortgage mess. No Barney we are blaming you pinheads in Congress who were getting paid to let this go on when Republicans were trying to fix it and end the corruption.  

This video is one of the greatest lessons in how politicians lie and shirk responsibility that I have ever seen. So read carefully because we are going to parse this one. 

For those who don’t know, Barney Frank is one of those most responsible for the largest economic scandal in the history of the world; this mortgage crisis. Barney Frank has been a ranking member of the House Finance (banking) Committee, has served in the House since 1981, and is now the chairman of the House Finance Committee.

What you need to know before you watch in a nutshell –

We have explained in detail in different ways  HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE just how this mess happened, who and what got the ball rolling, and who got paid to keep it rolling when people tried to stop it. We explained how the Federal Reserve, the OFHEO, the Treasury Department, President Bush, and other members of Congress tried to get new laws passed that put the mortgage industry’s biggest players, Fannie Mae and Freddie Mac, under control of REAL banking regulators that can enforce Generally Accepted Accounting Practices. Those who monitor Freddie Mac and Fannie Mae, the OFHEO, can monitor but cannot enforce, they can only report to the finance (banking) committees in Congress. OFHEO has been asking for real banking regulator powers or the transfer of the oversight to such an agency for years. You can read these reports HERE and HERE (warning long so read them later). Frank and other Democrats on that committee and in the Congress voted no and worked to block efforts to reform it. This mess was completely avoidable.

See this video here before we get on to the shootout –

Ok Time for O’Relly vs. the Lying Politician

Frank: “I think that prospects for going forward (as an investment) is very solid.”

Keep this comment in mind as you watch the interview.

Frank says that he passed a bill in May… “I did what the Republicans couldn’t do in 12 years, get a bill passed the regulatory committee”

That is because most of the House Democrats, including YOU Barney, voted NO when the Republicans tried to fix this in those 12 years Barney. Those OFHEO reports above have been telling him what was coming for years and even the Democrat friendly New York Times warned of this in 1999…after years of knowing what was coming and denying it…. he says he passed a bill in May… After the Republicans tried to end the corruption being laundered through the “Affordable Housing Trust Fund” all the Senate Democrats voted no and Democrats in both chambers denied that the problems even existed as we saw on the video (more on that trust fund below). In 2005 the House Republicans had enough control to force passage in spite of Frank and his allies, but the Democrats in the Senate unanimously voted no and blocked it.

 

Frank:“..The regulation should be improved. Now from 1995 to 2006 when the Republicans controlled Congress we were in the minority we couldn’t get that done.”

We just saw on video, and it is a part of the Congressional record, Barney Frank saying that Fannie and Freddie are fine, I have other video’s of the other Democrats on his committee saying the same thing, and they even accused the OFHEO regulators of racism because the CEO of Fannie Mae was a black man named Franklin Raines and the committee wanted poor people to get these loans (that were bad loans).

FRANK: Although in 2005, Mike Oxley, of Sarbanes-Oxley fame, a pretty tough guy on regulation, did try to put a bill through to regulate Fannie Mae. I worked with him on it. As he told The Financial Times, he thought ideological rigidity in the Bush administration stopped that.

Oxley’s non-indexed mark to market accounting rule, which was put into effect by the Sarbanes-OXley law in reaction to the Enron scandal,  was a big factor in this mess. I wrote an article that explains this whole crisis in plain English, step 5 of that article explain’s Oxley’s role. Oxley is trying to throw blame off of himself just as Frank is and a new article explaining his role and lies is on the way.

Back to Fannie Mae and Freddie Mac: Some Democrats were willing to go along with the bill until Oxley and the other Republicans added an amendment to the bill to prevent recipients of the “Affordable Housing Trust Fund” from engaging in political activities.

This is crucial. Trust funds supplied from the government have very little oversight and groups such as ACORN and LaRaza were getting millions in taxpayer and taxpayer backed dollars to engage in partisan activities on behalf of Democrats. These groups get this money because they do have affordable housing councillors, but they also engage in partisan activities and ACORN has been caught multiple times in multiple states for vote fraud. Oxley was right to add this provision in the bill.

When taxpayer dollars or taxpayer insured dollars are used to promote a candidate, the word for that is corruption. When Republicans tried to put an end to this corruption most Democrats in the House and all Senate Democrats voted to stop any attempt to fix Fannie Mae and Freddie Mac. They voted no and denied that there was a problem as you saw in the video, who is it that is engaging in ideological rigidity?

 

Frank:But the basic point is that the first time I had any real authority over this was January of 2007. And within two months, we had passed the bill that regulated.”

A fat lie. As the ranking Democrat on the committee you had great influence and authority over the other Democrats on the committee going back for many years.

 

FRANK: And then also, one other point: The Senate was dragging its feet, as often happens. And in January of 2008, I asked Secretary Paulson to put in the stimulus bill. So, the earliest chance I got to put tough regulation of Fannie Mae and Freddie Mac, we did it.

The Senate was dragging it’s feet alright, the Democrats all voted NO..all of them…and why? Because Fannie and Freddie were paying members in the Senate too, most of them Democrats and they did not wnat the provision that would have stopped ACORN from engaging in partisan activities on behalf of Democrats. The Republicans did not have the 60 votes necessary to force the issue.

Here is where Frank tries to deny what O’Reilly just showed in the video. Frank is literally trying to tell the audience that you did not see what you just saw.

O’REILLY: All right, that’s swell. But you still went out in July and said everything was great. And off that, a lot of people bought stock and lost everything they had.

FRANK: Oh, no.

O’REILLY: And — yes, oh yes. Oh, yes.

FRANK: I said it wasn’t a good investment. Please stop yelling.

O’REILLY: Don’t give me any of that, we just heard the words. What are you…

FRANK: That’s wrong.

O’REILLY: You didn’t say that? You want me to play it again for you?

FRANK: You didn’t listen to it.

O’REILLY: No, I listened to every word you said. And I have the transcript right here.

FRANK: No, and I said it wasn’t a good investment.

O’REILLY: Yes, you said going forward, we’re going to be swell.

FRANK: No, I didn’t say swell. Excuse me, Bill.

An important observation needs to be made here. Frank did say that future prospects are looking solid.. ok O’Reilly uses the word swell but the meaning of what O’Reilly is saying is totally correct.

So instead of facing the 99% truth O’Reilly was giving him, Frank stands on the 1% part that wasnt sand says “I didn’t say swell”. This is the same tactic that Bill Clinton used. When his affair with Gennifer Flowers was exposed and someone said that he had an 11 year relationship with her, Clinton would say, “That is not true. I did not have an 11 year relationship with her.” – when the truth was that he had a 12 year relationship with her.

Politicians like to stand on a tiny detail that is only slightly wrong and use it to technically deny the allegation. Politicians are masters of this kind of deception and use this tactic often just as Barney Frank is here.  

O’REILLY: Look, from August ’07 to August ’08.

FRANK: Excuse me, Bill.

O’REILLY: Don’t — look, stop the B.S. here. Stop the crap! From August ’07 to August ’08…

FRANK: You know, here’s the problem going on your show…

O’REILLY: …under your tutelage, this industry…

FRANK: Here is the problem going on your show.

O’REILLY: …declined 90 percent. 90 percent.

FRANK: Yes, but…

O’REILLY: Oh, none of this was your fault! Oh, no. People lost millions of dollars. It wasn’t your fault. Come on, you coward! Say the truth.

FRANK: What do you mean coward?

O’REILLY: You’re a coward. You blame everybody else. You’re a coward.

FRANK: Bill, here’s the problem with going on your show. You start ranting. And the only way to respond is almost to look as boorish as you. But here’s the facts. I specifically said in the quote you just played that I didn’t think it was a good investment. I wasn’t telling anybody to buy stock. I said it wasn’t a good investment.

Secondly, I wasn’t presiding idly over this. I was trying to get the regulations adopted. We got them adopted in May.

“I wasn’t telling anyone to buy stock”… but hey Barney people bought stock vbased on you saying that the future aspects are solid… and he knows that.

And now they are yelling back and forth at each other, I wish O’Reilly would have taken him apart like a good tactician, but this is what we have to work with  so back to the show….

O’REILLY: You said going forward, it’s going to be swell. And people under that bought stock in that, thought it was a good investment.

FRANK: I didn’t say swell. I didn’t say swell. No, I said in fact in that quote that you played and didn’t listen to because you’re busy ranting that it’s not a good investment. I said that at the time. I did think we were going to improve things going forward. Yes, we had some things that needed improvement.

O’REILLY: All right, you want to — here, let me read you your quote here. OK? OK? “I do think the prospects going forward are very solid.”

Now O’relly catches him on the “I didnd’t say swell” dodge…

FRANK: But that’s not the part about it not being a good investment.

O’REILLY: Now, people bought stock when you said that.

FRANK: You are distorting it. Bill, you’re lying by your words.

O’REILLY: This is what you said.

FRANK: What about the part where…

O’REILLY: Not lying. And I played it and I read it.

FRANK: What about the part where I said it wasn’t a good investment?

O’REILLY: You said it’s not the best right now, but going forward this is going to be solid.

FRANK: Right…

O’REILLY: People lost millions.

FRANK: I didn’t say solid, I didn’t say swell. You distort consistently. And you think ranting and raving…

O’REILLY: All right.

FRANK: …you don’t want to talk about 1994, like no history is relevant. The fact is that you had a problem with an administration — conservative.

(CROSSTALK)

O’REILLY: I know, it’s all the conservatives, it’s all the Republicans and not you.

FRANK: Oh, come on.

O’REILLY: None on you. That’s a joke.

……..

Hotair.com comments on the exchange HERE.

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis | Leave a Comment »

Thomas Sowell Asks: Do Facts Matter?

Posted by iusbvision on October 4, 2008

Famed Author and Economist Thomas Sowell

Famed Author and Economist Thomas Sowell

by Thomas Sowell 

Abraham Lincoln said, “You can fool all the people some of the time and some of the people all the time, but you can’t fool all the people all the time.”

Unfortunately, the future of this country, as well as the fate of the Western world, depends on how many people can be fooled on election day, just a few weeks from now.

Right now, the polls indicate that a whole lot of the people are being fooled a whole lot of the time.

The current financial bailout crisis has propelled Barack Obama back into a substantial lead over John McCain– which is astonishing in view of which man and which party has had the most to do with bringing on this crisis.

It raises the question: Do facts matter? Or is Obama’s rhetoric and the media’s spin enough to make facts irrelevant?

Fact Number One: It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years– including the present year– denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.

It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac.

It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today’s financial crisis.

Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush’s Secretary of the Treasury, five years ago.

Yet, today, what are we hearing? That it was the Bush administration “right-wing ideology” of “de-regulation” that set the stage for the financial crisis. Do facts matter?

We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn’t.

Is that the free market? Or do facts not matter?

Then there is the question of being against the “greed” of CEOs and for “the people.” Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis.

Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the “lynching” of Raines, as if it was racist to hold him to the same standard as white CEOs.

Even after he was deposed as head of Fannie Mae, Franklin Raines was consulted this year by the Obama campaign for his advice on housing!

The Washington Post criticized the McCain campaign for calling Raines an adviser to Obama, even though that fact was reported in the Washington Post itself on July 16th. The technicality and the spin here is that Raines is not officially listed as an adviser. But someone who advises is an adviser, whether or not his name appears on a letterhead.

The tie between Barack Obama and Franklin Raines is not all one-way. Obama has been the second-largest recipient of Fannie Mae’s financial contributions, right after Senator Christopher Dodd.

But ties between Obama and Raines? Not if you read the mainstream media.

Rabbi Dennis Prager makes the same case

Facts don’t matter much politically if they are not reported.

The media alone are not alone in keeping the facts from the public. Republicans, for reasons unknown, don’t seem to know what it is to counter-attack. They deserve to lose.

But the country does not deserve to be put in the hands of a glib and cocky know-it-all, who has accomplished absolutely nothing beyond the advancement of his own career with rhetoric, and who has for years allied himself with a succession of people who have openly expressed their hatred of America.

Our complete coverage of the mortgage bailout crisis, who got paid, who benefited and who is lying, is HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE. – Editor

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Other Links | 1 Comment »

Clinton Says that Obama is Wrong About Economic Crisis

Posted by iusbvision on October 1, 2008

As we have written about HERE, HERE, HERE and HERE. We have explained the current financial crisis in detail, how it happened, who got paid and who is responsible.

We have also written about how Barack Obama has been saying that there is no regulation, that capitalist free wheeling with no oversight led to this problem. Those who have taken the time to read the material know that such claims are nonsense. Bill Clinton, who bears a lesser amount of responsibility for this mess than Congressional Democrats on the banking committees do, properly and accurately stated the facts in some interviews lately about banking and mortgage regulations he signed into law. As we have said, if the regulations, while flawed, were followed in the spirit of the law, this mess might not have ever happened.

As we have shown in the previous posts linked above, a money train in an influence peddling scandal made sure that the spirit of the law was not followed. Congress was warned, some people tried to fix it, but most Democrats just said no and most of the elite media is ignoring this story and public record.

Bill Clinton sets the record straight on the Gramm-Leach-Bliley Act. It was not the deregulation Obama is saying it is, and it had little to do with the mess we see ourselves in now:

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress’s 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that “deregulation” bill into law, and he knows better.

In BusinessWeek.com, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.

“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.”

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as “the architect in the United States Senate of the deregulatory steps that helped cause this mess.” Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him “a bill of goods”?

Mr. Clinton: “Not on this bill I don’t think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.

“But I can’t blame [the Republicans]. This wasn’t something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment.”

We agree that Mr. Clinton isn’t wrong about everything. The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle — oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement.

http://online.wsj.com/article/SB122282635048992995.html?mod=todays_us_opinion

Hotair.com commented on this issue HERE

UPDATE: Investors Business Daily and Human Events Magazine came out with an analysis (albeit they are a bit more strident in their partisanship) that verifies much of what President Clinton has stated. These two articles, especially the one from Human Events, has much evidence demonstrated or linked too. They also are similar to the analysis we wrote on September 21 HERE.

Chuck Norton

Posted in Campaign 2008, Chuck Norton, Corporatism, Mortgage Crisis, Palin Truth Squad | 1 Comment »

Obama Sued Citibank Under CRA to Force it to Make Bad Loans – UPDATED

Posted by iusbvision on September 30, 2008

NEW UPDATE 2-19-2010Congressional  Report says that ACORN/SEIU a criminal conspiracy that played a roll in the mortgage collapse (just as we have said from minute one) – LINK.

UPDATE 9-22-2009: Here we go again, introducing the Community Reinvestment Modernization Act.

[Please see the special editors note at the bottom of this post – Editor]

UPDATE 10-12-2008: Hotair.com posts a video From April 3, 1998 of Clinton’s HUD Secretary Andrew Cuomo telling how they forced banks to make high risk affirmative action loans. See Update VIII towards the bottom of this post.

UPDATE V: AUDIO – OBAMA SAID IN 2007 THAT GIVING SUB-PRIME LOANS TO PEOPLE WHO COULDN’T AFFORD THEM WAS A GOOD IDEA!!! Hotair.com comments HERE.

“I’ve been fighting alongside ACORN on issues you care about my entire career. Even before I was an elected official, when I ran Project Vote voter registration drive in Illinois, ACORN was smack dab in the middle of it, and we appreciate your work.” — Barack Obama, Speech to ACORN, November 2007

*****ORIGINAL STORY BEGINS HERE******

Do you remember how we told you that the Democrats and groups associated with them leaned on banks and even sued to get them to make bad loans by abusing the Community Reinvestment Act (see HERE and HERE)? The abuse of this act by ACORN and officials like Janet Reno was a factor in causing the economic crisis. The harassment suits filed under this act were used to get banks to lower credit standards and hand out high risk loans. We have dug up the lawsuit below while researching Obama’s legal career. It is a typical example of an ACORN harassment lawsuit.

In these lawsuits, ACORN makes a bogus claim of Redlining (denying poor people loans because of their ethnic heritage). They protest and get the local media to raise a big stink. This stink means that the bank faces thousands of people closing their accounts and get local politicians to lobby to stop the bank from doing some future business, expansions and mergers. If the bank goes to court, they will win, but the damage is already done because who is going to launch a big campaign to get the bank’s reputation back?

It is important to understand the nature of these lawsuits and what their purpose is. ACORN filed, or threatened to file, tons of these lawsuits and ALL CRA suits allege racism (usually the press involved and such with the threat of the CRA lawsuit is enough to get the bank to give in and put them in a catch 22, they also had a willing Janet Reno Justice Department to work with – see below for more on Reno). As we have said in our series or articles analyzing every aspect of this story (links at the very bottom of this post), the series of ACORN harassment lawsuits and intimidation against banks to lower credit standards was not the sole reason for the mortgage crisis, it was one important layer of many that brought us to the mortgage crisis and the largest financial scandal in the history of the world.

Case Name
Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/Insurance
Docket / Court 94 C 4094 ( N.D. Ill. ) FH-IL-0011
State/Territory Illinois

Case Summary
Plaintiffs filed their class action lawsuit on July 6, 1994, alleging that Citibank had engaged in redlining practices in the Chicago metropolitan area in violation of the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691; the Fair Housing Act, 42 U.S.C. 3601-3619; the Thirteenth Amendment to the U.S. Constitution; and 42 U.S.C. 1981, 1982. Plaintiffs alleged that the Defendant-bank rejected loan applications of minority applicants while approving loan applications filed by white applicants with similar financial characteristics and credit histories. Plaintiffs sought injunctive relief, actual damages, and punitive damages.

U.S. District Court Judge Ruben Castillo certified the Plaintiffs’ suit as a class action on June 30, 1995. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 322 (N.D. Ill. 1995). Also on June 30, Judge Castillo granted Plaintiffs’ motion to compel discovery of a sample of Defendant-bank’s loan application files. Buycks-Roberson v. Citibank Fed. Sav. Bank, 162 F.R.D. 338 (N.D. Ill. 1995).

The parties voluntarily dismissed the case on May 12, 1998, pursuant to a settlement agreement.
Plaintiff’s Lawyers Alexis, Hilary I. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Childers, Michael Allen (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Clayton, Fay (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Cummings, Jeffrey Irvine (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Love, Sara Norris (Virginia)
FH-IL-0011-9000
Miner, Judson Hirsch (Illinois)
FH-IL-0011-7500 | FH-IL-0011-9000
Obama, Barack H. (Illinois)
FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000
Wickert, John Henry (Illinois)
FH-IL-0011-9000

[Editor’s Note – Like so many of these cases, when faced with the bad publicity, the awareness of how the local media would sensationalize such a story, the awareness of ACORN’s close ties with the federal government and the Democratic Leadership, Citi chose to settle the case. All of the details are not known but according to court documents in our possession part of the settlement included $950,000 in attorneys fees.]

UPDATE: Hotair.com comments on other CRA lawsuits HERE.

New York Post Article HERE:

The seeds of today’s financial meltdown lie in the Community Reinvestment Act – a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in “subprime” loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA – and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America’s financial institutions.

The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering efforts to force banks to suspend their usual credit standards.Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding for her efforts.

And, as the leader of another charity, the Chicago Annenberg Challenge, Obama channeled morefunding Talbott’s way – ostensibly for education projects but surely supportive of ACORN’s overall efforts.

UPDATE II: Fox News gets on the story

UPDATE III: CNS News Analysis

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”

The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”

This threat combined with the government backing of Fannie and Freddie set the stage for the current uncertainty, because the “banks could just sell the loans off to Fannie or Freddie,” who could buy them with little regard for negative financial outcomes, Richman said.

http://www.cnsnews.com/public/content/article.aspx?RsrcID=36048

UPDATE IV:It’s about time …

Update VI: Investors business daily reports more on Obama’s work with ACORN

As the New York Times reports, “Aides to Mr. Obama said he had not directly reached out to try to sway any House Democrats who opposed the measure.” Is the reason the fact that the slush fund for ACORN in the original bill, siphoning off 20% of any future profits for such activist groups, was trimmed from the tree?

Obama, who once represented ACORN in a lawsuit against the state of Illinois, was hired by the group to train its community organizers and staff in the methods and tactics of the late Saul Alinsky. ACORN would stage in-your-face protests in bank lobbies, drive-through lanes and even at bank managers’ homes to get them to issue risky loans in the inner city or face charges of racism.

In the early 1990s, reports Stanley Kurtz, senior fellow at the Ethics and Policy Center, Obama was personally recruited by Chicago’s ACORN to run training sessions in “direct action.” That’s the euphemism for the techniques used under the cover of the federal Community Reinvestment Act to intimidate financial institutions into giving what have been called “Ninja” loans — no income, no job, no assets — to people who couldn’t afford them.

CRA was designed to increase minority homeownership. Whenever a bank wanted to grow or expand, ACORN would file complaints that it was not sufficiently sensitive to the needs of minorities in providing home loans. Agitators would then be unleashed.

Chicago’s ACORN used Alinsky’s tactics against institutions such as Bell Federal Savings and Loan and Avondale Federal Savings. In September 1992, the Chicago Tribune described the group’s agenda as “affirmative action lending.”

Obama also helped ACORN get funding. When he served on the board of the Woods Fund for Chicago with Weather Underground terrorist William Ayers, the Woods Fund frequently gave ACORN grants to fund its activist agenda.

In 1995, Kurtz reports, Obama chaired the committee that increased funding of ACORN and other community organizers. The committee report boasted that the fund’s “non-ideological” image “enabled the Trustees to make grants to organizations that use confrontational tactics against the business and governmental ‘establishments’ without undue risk of being accused of partisanship.”

The CRA empowered regulators to punish banks that failed to “meet the credit needs” of “low-income, minority and distressed neighborhoods.” It gave groups such as ACORN a license and a means to intimidate banks, claiming they were “redlining” poor and minority neighborhoods. ACORN employed its tactics in 1991 by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA.

As a former White House staff economist writes in the American Thinker, Obama represented ACORN in a 1994 suit against redlining.  ACORN was also a driving force behind a 1995 regulatory revision pushed through by the Clinton administration that greatly expanded the CRA and helped spawn the current financial crisis.

Obama was the attorney representing ACORN in this effort. Last November, he told the group, “I’ve been fighting alongside ACORN on issues you care about my entire career.” Indeed he has. Obama was and is fully aware of what ACORN was doing with the money and expertise he provided. The voters should be aware on Nov. 4 of the roles of both in creating the current crisis.

http://www.ibdeditorials.com/IBDArticles.aspx?id=307667123149723

UPDATE VII: Some on the left are saying that SNOPES.com has debunked this story, this is not so. Snopes is talking about another story that makes a different claim about this same lawsuit. It does not dispute that this lawsuit was one of a series of lawsuits that were filed by ACORN using “redlining and racism” allegations to lower credit standards. It does not dispute that all of the ACORN CRA lawsuits claimed redlining and racism. It does not dispute that at other times ACORN used intimidation tactics against bank managers to try to make them give high risk loans. ACORN’s activities have been widely reported by many news outfits in the last few days.  We also never claimed that Obama was the main lawyer in the suit, just a part of the “team” that used these tactics to rip banks off. We are glad that we were one of the first to get this story right.

[Editor’s Note – Why would anyone be surprised that a far left group would accuse anyone of racism when not given what they want? This is their favorite tactic. “Oppose ObamaCare your racist” (SIC), oppose nationalization of banks, your racist, oppose 20 new Czar positions that don’t have enough transparency and accountability, your racist, catch Obama in a little white lie, your racist and the list goes on and on.]

UPDATE VIII: (10-12-2008) Hotair.com posts a video From April 3, 1998 of Clinton’s HUD Secretary Andrew Cuomo telling how they forced banks to make high risk affirmative action loans. A CNN Story HERE.

CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have given otherwise, yes.

Q: [unintellible] … that they would not have given the loans at all?

CUOMO: They would not have qualified but for this affirmative action on the part of the bank, yes.

Q: Are minorities represented in that low and moderate income group?

CUOMO: It is by income, and is it also by minorities? Yes.

CUOMO: With the 2.1 billion, lending that amount in mortgages — which will be a higher risk, and I’m sure there will be a higher default rate on those mortgages than on the rest of the portfolio

Our other posts that explain every facet of the mortgage crash scandal are in detail HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE. – Editor

Special Editor’s Note:

This post has become one of the most discussed articles on the internet, literally linked to by thousands of blogs and discussion forums. After seeing time and time again how this article is used and misused by partisans on both sides, I finally decided to add this note to help give you all a little perspective.

First of all, neither my article, nor most of the other articles I have seen blame the CRA exclusively for the mortgage crisis. The steps that lead to the meltdown are multi-layered and the CRA and its abuse by the Clinton Administration and ACORN was merely a layer of the problem.

There is no question that Janet Reno and Andrew Cuomo and ACORN sought and did use the CRA to scare banks into loosening credit standards to benefit their own constituencies. Cuomo, ACORN and Reno are all on the record doing/saying so.

When Freddie Mac and Fannie Mae started buying any mortgage no matter how bad or risky to sell as mortgage securities, enforcement of the CRA was no longer necessary because banks were given every incentive and were pressured by the House and Senate Banking Committee (mostly by Dems on the committee to be fair)to just give the loans and the banks could sell them to Fannie/Freddie taking the risk away from the bank.

I see many of the hundreds of message boards and blogs that link to my post, but few arguing one way or another are really reading the arguments and the evidence and addressing them. I wrote a dozen articles on this story and as I indicated there were many layers including the Sarbanes-Oxley legislation and abuse by Fannie/Freddie and the abuse/neglect by Chris Dodd and Barney Frank. If you want to get a better grasp on the entire story, read the articles linked above at the bottom of the post as each explains another layer/facet of the problem.

I would like to address some of the sources you guys are quoting because most of them, on the substance are making misleading/ridiculous claims.

The 100K challenge “source” was pretty amusing. He says he will debate anyone that CRA was not a prima cause of the crisis, but the narrative that this post and some of the others give was that since it wasn’t a primary cause, that it was of no cause at all and that is indeed a false narrative. Abuse of the CRA was an important layer, but only one layer of many. The post then goes to say that it wasn’t a major factor, well what is major to one person is not major to another.

These people making these claims would not be so foolish to argue this from the other angle; eg. to make the case that CRA and its later abuse, in no way loosened up credit to those who were high risk and/or had no business trying to obtain such a large loan.

I saw the “source” that was a post on the Businessweek Blog that said CRA wasn’t to blame, and then went on to say that essentially that Freddie/Fannie couldn’t be blamed either, which is preposterous. It was those Mortgage Securities issued by Fannie/Freddie that spread like a toxic poison in the investment markets and everyone knows it.

Many of the other “sources” quoted were merely appeals to authority proclaiming themselves correct and experts and then tell you their view with nothing verifiable for people like you and me to look up.I hope that this post helped to add a little perspective to your discussion.

The “source” that was from the Federal Reserve Bank mentioned in the Wall Street Journal was greeted with skepticism by the WSJ and Investors Business daily. Besides a government report declaring a big government regulation and its abusive enforcement innocent should not surprise anyone.

As far as how most of you have approached this argument, you throw up all these links, but few of you really address the arguments and specific points that are in the links themselves.

Also I encourage you all to avoid emotional attachments to candidates. Have any of you known a bratty kid who is a little terror, whose parents act as if their kid can do no wrong? They act that way because they can’t see passed their own emotional attachments and that is how many of you are behaving.

Here is a simple truth, economic policy in the first Bush term and the second were profoundly different and policy wise the Obama policies are very much like Bush second term policies just on steroids. It also didn’t help that Bush’s second term Treasury Sec. Mr. Paulsen and Obama’s Treasury Sec. Mr. Geithner are two of the very worst Treasury heads ever.

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Palin Truth Squad | 117 Comments »

THE VIDEOS THAT SAY IT ALL: Democrats on Banking Committee Lying About Status of Fannie Mae and Freddie Mac – Saying They are Fine and Don’t Need Reform & Critique of Fannie Mae is a Racial Attack on Franklin Raines…

Posted by iusbvision on September 28, 2008

UPDATE III: If you liked my “In Plain English – How this mess happened” article linked below – someone made a video version that says the same thing. Enjoy and learn.

Now Back to our original story.

Democrats on the banking committee’s have been brazenly lying about all of this for years so they cannot be trusted. Why do I say that? Because the regulatory agency that reports to Congress has been warning them or YEARS that this was coming and they blocked all attempts to reform it as we have demonstrated with the evidence and the government documents HERE, HERE, HERE and HERE.

UPDATE: The New York Times predicted the possible collapse of Fannie Mae and Freddie Mac in 1999! Read HERE.

UPDATE II: House Votes NO on bailout!
People are blaming partisan back and forth for the reason, but the truth is that while the improvements the House Republicans insisted on did improve the bill, the oversight on the mortgage industry was still not up to par; too many political appointees, not enough real bank regulators, which is what caused this whole mess in the first place.

Another problem with this bill is that the banks would get these funds, but have no obligation to continue extending credit to medium risk credit worthy people, smaller banks, farms and companies. If the object is to get some solvency into these banks in trouble because of the mortgage crisis, shouldn’t we demand that they still behave as responsible banks instead of just sitting on a huge wad of taxpayer cash to only act as a soft and fluffy cash barrier to their own risk? The object of the bill is to get banks in the position to be responsible lenders again so the economy doesn’t shut down; this bill doesn’t do that.

UPDATE IV: —–>MUST SEE Video HERE go view it. <——
We have that video on youtube now:

Our entire coverage of ever facet of the mortgage crisis can be found HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE – Editor

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Other Links, Palin Truth Squad | 5 Comments »

Alan Greenspan and the Federal Reserve Warned Congress – Greenspan Testified for McCain’s Bill to Fix Fannie Mae and Freddie Mac in 2004 and 2005 – Democrats Voted No in House and in Senate Blocked it Along Party Lines!

Posted by iusbvision on September 23, 2008

Brit Hume covered this story on Sept 23 and came to the same conclusion as we did here at IUSB Vision.

The Republicans, in a bill co-sponsored by John McCain,  tried to change the Fannie Mae and Freddie Mac oversight regulations to those that are used by bank regulators. The bill to change the oversight rules was eek-ed by the Senate Committee in a party line vote with Democrats against it, but since Democrats were filibustering most significant legislation they didn’t like the Republicans did not have the 60 votes to pass it. Not one Democrat would budge.

Editors note: a reader (see below) commented that he takes issue with the paragraph above about the Democrats filibustering all significant legislation they didn’t like in the Senate to stop provisions they opposed.

We could write a new article presenting a list of legislation and amendments that was stopped because the Democrats were stopping cloture constantly by abusing the filibuster rule. It is a VERY long list. Remember the judicial nominees that were blocked for months and months and some never got a vote… etc…

Some partisans may not like it but the statement above is essentially true.

Examining the inverse – should I say that the Democrats were voting for and or making sure that they were not filibustering legislation that they didn’t like?? – Editor]

Freddie Mac and Fannie Mae answer to the banking committee’s in Congress – NOT the Treasury Dept, and are monitored by a small agency called OFHEO to report to the committee’s, so Congress KNEW this was coming and have for years as we have covered HERE, HERE and HERE.

Alan Greenspan testified in favor of the reforms (transcript HERE and HERE) and warned:

If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear.

Hotair.com has the following commentary:

By special request of Ace. Nothing here you haven’t read and/or heard before, but Fox deserves a little publicity for being willing to challenge the narrative. Especially now that we’re about to be told it’s McCain’s campaign manager and his lobbyist pals, not the Democrats they lobbied who actually cast the votes, who are the real culprits in all this. The FBI: Doing the (after-the-fact) oversight job Congress wouldn’t.

UPDATE: Bloomberg News covered the story and gives similar information.

UPDATE II:Fox updated the story and has a devastating new report. The Report mirrors the investigation IUSB Vision Published HERE, HERE, HERE and HERE. Hotair.com comments on this new report from Fox HERE.

Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE. – Editor

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Other Links, Palin Truth Squad | 10 Comments »

Bush Administration Warned Congress Almost 20 Times Reforms Were Needed

Posted by iusbvision on September 21, 2008

UPDATE IV – April 7, 2009 More evidence of how Barney Frank and the Democrats blocked mortgage industry policing reform HERE.

Think the elite media will cover the story? I am taking bets. – Editor  Update: Nothing on NYT or Washpost web sites yet 11:08 AM eastern time Sept 23.

UPDATE III: Fox updated the story and has a devastating new report. The Report mirrors the investigation IUSB Vision Published  HERE, HERE, HERE, HERE, HEREHERE, HEREHERE and HERE. Hotair.com comments on this new report from Fox HERE.

 
UPDATE II: Bloomberg News covered the story and gives similar information.
Fox is not a part of the elite media but Brit Hume covered this story on Sept 23.

UPDATE I: The Republicans, in a bill co-sponsored by John McCain (see HERE), tried to change the Fannie Mae and Freddie Mac oversight regulations to those that are used by bank regulators (now they answer to the banking committee’s in Congress that set up a small agency to report to the committee’s so Congress KNEW this was coming and have for years). The bill to change the oversight rules was killed in a party line vote with Democrats against it. Alan Greenspan testified in favor of the bill (transcript HERE) and warned:

If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear.

Hotair.com has the following commentary:

By special request of Ace. Nothing here you haven’t read and/or heard before, but Fox deserves a little publicity for being willing to challenge the narrative. Especially now that we’re about to be told it’s McCain’s campaign manager and his lobbyist pals, not the Democrats they lobbied who actually cast the votes, who are the real culprits in all this. The FBI: Doing the (after-the-fact) oversight job Congress wouldn’t.

*********Original Story*********

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)

…..And the list goes on HERE. (update, the Obama administration has removed this briefing from the Whitehouse.gov website – anyone surprised?)     Hat Tip Gateway Pundit

Posted in Campaign 2008, Chuck Norton, Journalism Is Dead, Mortgage Crisis, Palin Truth Squad | 2 Comments »

In Plain English: How Did The Biggest Financial Scandal in History Happen? – UPDATED!

Posted by iusbvision on September 21, 2008

This article is a bit long for a blog post, but if you wish to truly understand, this article is a great place to start. – Editor

First a little perspective…..

Enron generated huge press when it failed, lots of money went “POOF”, and the elite media and the Democrats had a great time “blaming Bush” for it until the investigations started and they realized that it was Democrats that worked in the Clinton administration that had set up their “accounting system” when those people worked in the private sector. It proved to be a bi-partisan scandal so it vanished from the front pages just like that.

Global Crossing was another huge one, it got even less press because just before they went belly up they gave $18 million to Democratic National Committee Chair Terre McAuliffe.

Halliburton just had a few accounting errors and the occasional overcharge, which is to be expected in an operation the size of a country in a war zone. The reported accounting and billing errors were all caught by the inspectors and it was settled easily. The press pounded it and pounded it because Vice-President Cheney used to be the CEO of Halliburton. Of course when it was learned that Bill Clinton gave Halliburton no bid contracts and Al Gore had given Halliburton an award that press went away too.

The next big one was the UN Oil for Food Program. It was supposed to administer Iraq’s oil revenues so they could be used for food, medical supplies, and infrastructure instead of weapons programs. The UN handlers managed to bilk (read rob) up to $26 billion from the program. Until Fannie Mae and Freddie Mac went belly up, this was the biggest financial scandal in world history.

The media and politicians have had a cow over $30 billion in profits from oil companies. Of course they don’t tell you that they often pay more in taxes than they make in profit, but why would politicians who demagogued the issue and a leftist press want to tell you that?

Now we have the current scams, which is approaching a $1Trillion and will go into the trillions of dollars more if these countless home mortgages do not get covered or sold in the future. This is the biggest financial scandal in the history of the world and is so big that it likely is bigger than most previous scandals combined.

Congress yanked the oil company CEO’s in front of a committee to grill them so why not Fannie Mae? Answer: Franklin Raines, James Johnson, Jamie Gorelick etc… they are all Clinton political appointees.

So now that you have some perspective, let’s start to look at how this all happened.

Before the stock market crash of 1929 and before the great depression, commercial banks and investment banks either worked closely together or in many cases were one. A single bank could do both roles. An investment bank did investments and securities and all those things associated with it and commercial banks would do home loans, savings accounts, checking, CDs etc.

One of the elements that led to the stock market crash and the depression is that the investment banks were counting the saving accounts (& deposits), mortgages (good and bad) and all they had as assets that they could use for trading in the market. When the market gets out of control and people cook the books to ensure that on paper it looks like you have a growing quarterly profits so people could get paid more things get shaky. They ended up having a lot of “bad paper” mortgages and investments and eventually it all came crashing down.

Laws were passed such as the Glass-Steagal Act. Among other things Glass-Steagal divided commercial banks and investment banks so that people’s savings would not be put at such investment risk. This law weakened the banks but disproportionately weakened the Morgan Bank which pleased the Rockefeller Bank (Yup influence peddling back then too).

Over the years other countries unified banks had an advantage over American banks so Congress moved to even things up and re-unify the banks and set up a regulation and monitoring system to make sure that what happened to help lead up to the Crash of 1929 did not happen again. The first vote in the Senate went along party lines but after compromises with Democrats and the Clinton Administration it passed the Senate 90 votes to 8. The law is called the Gramm-Leach-Bliley Act.

Clinton Signs Legislation Overhauling Banking Laws
New York Times Published: November 13, 1999

President Clinton signed into law today a sweeping overhaul of Depression-era banking laws. The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and to sell each other’s products.

”This legislation is truly historic,” President Clinton told a packed audience of lawmakers and top financial regulators. ”We have done right by the American people.”

The bill repeals parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act to level the domestic playing field for United States financial companies and allow them to compete better in the evolving global financial marketplace.

Analysts and industry leaders say the measure will probably fuel a wave of mergers as companies compete to build financial supermarkets offering all the services customers need under one roof.

Financial stocks were winners on Wall Street today, with J. P. Morgan & Company, Citigroup, American Express and Merrill Lynch all posting big gains. That helped the Dow Jones industrial average end up 174.02 points, at 10,769.32.

The Senate approved the final bill by 90 to 8 on Nov. 4 and the House followed suit by a vote of 362 to 57. Congress had previously made almost a dozen unsuccessful attempts over the last 25 years to revise the statutes, which had increasingly come to be viewed as anachronisms.

The Obama campaign and far left web sites are blaming this law for the current economic problems. They are pointing to the first vote which was mostly along party lines but ignore the second vote which was almost unanimous. If you examine the wikipedia entry on the Gramm-Leach-Bliley Act it tells how one of the compromises that Democrats insisted upon was a strengthening of the Community Reinvestment Act (CRA).

The CRA was the first step to this crisis because even with unified banks, if sound and ethical financial practices were used all would have been fine. The Obama campaign says that re-unifying the banks and “deregulating” is what caused this and capitalism is what caused the economic problems of today, yet other countries have unified banks and don’t get these problems so what is the real problem?

The Community Reinvestment Act likely started out with good intentions. It made it illegal to engage in what is known as “redlining” or singling out loan applicants by race. The problem is that there are enough minorities in poverty stricken inner city areas that banks who simply use standard good credit practices would leave out most anyone in those regardless of race. This created a loophole for groups such as ACORN to file a long series of harassment lawsuits charging redlining. ACORN also engaged in physical harassment of bank employees and other tactics to get them to lower credit standards.

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”

In the name of fighting “racism”  and “redlining” ACORN and the government forced banks to make riskier loans in areas less economically feasable and to customers who had a low and/or unstable income, e.g. those who are a high credit risk. Banks said it was risk management, Democrats said it was racism.

Abuse of the CRA was the first step in what became the mortgage crisis. For a more detailed article on ACORN and the abuse of the CRA, and Barack Obama’s role in ACORN please visit this link HERE.

April 3, 1998. After announcing billions in fines via CRA Andrew Cuomo is bold in pride that CRA would be abused to force banks to give bad loans.

CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have given otherwise, yes.

Q: [unintellible] … that they would not have given the loans at all?

CUOMO: They would not have qualified but for this affirmative action on the part of the bank, yes.

Q: Are minorities represented in that low and moderate income group?

CUOMO: It is by income, and is it also by minorities? Yes.

CUOMO: With the 2.1 billion, lending that amount in mortgages — which will be a higher risk, and I’m sure there will be a higher default rate on those mortgages than on the rest of the portfolio

This risk banks were subjected to was amplified because loan customers wanted fixed rates and depositors wanted a variable rate. The banks had to keep enough liquid assets to cover loans. This limited the number of loans that a bank could issue. Banks were being pushed into more lending by the political and regulatory environment. The government tracked every loan and the banks were issued a “CRA rating” by the government. So how did they get around these problems and buffer the risk?

Government Sponsored Enterprises (GSE) Fannie Mae and Freddie Mac were created as a partially private corporation backed by the US Government to buy loan bonds or buy the mortgages outright from banks. Congress created a regulation and monitoring agency called the OFHEO that reported to the Banking Committee’s in the Congress and exempted them from reporting to the Securities Exchange Commission (SEC).

OFHEO has two missions.

An affordable housing mission that reports to HUD, but has no real enforcement power and a mortgage finance mission that has almost no enforcement power and reports to the finance committee’s in Congress.

OFHEO is paid for by Fannie Mae and Freddie Mac and is not paid for by the tax payer.

Sounds odd you say? It is. Separation of powers would be true for a real constitutional agency, but Fannie Mae, Freddie Mac and OFHEO are a part of the GSE system and are not real constitutional agencies as authorized by Congress under Article I Section VIII.

Most of the mortgage industry debt is managed by GSE’s which are unique animals in government being part government and part private. That is why GSE’s do not follow the standard separation of powers as they were set up. It is no surprise that their monitoring and enforcement are not typical as well.

OFHEO has begged Congress year after year to have itself replaced by REAL banking regulators with REAL enforcement power either under the Federal Reserve or the Treasury Department. Here is an example from their 2007 Report:

Legislation
OFHEO has continued to strongly support enactment of legislative reform to strengthen GSE oversight. During the past year, the agency worked with the Bush Administration, Congress and interested parties on legislation that will provide bank regulator-like powers to a newGSE regulator overseeing Fannie Mae, Freddie Mac and the Federal Home Loan Banks.The House of Representatives passed, on a bipartisan basis, GSE regulatory reform legislation (H.R. 1427) in May 2007 [Barney Frank and Finance Committee Democrat members in both houses of Congress opposed it year after year till 2007 – Editor]. It is a balanced bill that will strengthen the nation’s housing finance system by enhancing oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It is my hope that the Senate will complete its work on this important legislation soon.
http://www.ofheo.gov/media/pdf/OFHEOPARNovember2007508.pdf

Democrats blocked that legislation year after year and below we posted the youtube VIDEO of members of the Finance Committee’s in Congress showing Democrats like Chris Dodd and Barney Frank and Maxine Waters all saying that Fannie Mae and Freddie Mac and the mortgage industry was in just dandy financial shape.

This was step two that led to this crisis. The abuse of CRA as we described above forced banks to make more loans available that carried more risk, so banks were eager to sell these higher risk loans to Fannie Mae and Freddie Mac. With the housing boom the inflated value of the houses it had as collateral for the loans on paper made it look like Fannie and Freddie had more collateral assets than reality could bear. With the housing market inflating due to easy loans and low interest rates making it TOO EASY to get a loan for a new home, demand for loans went up. Fannie and Freddie started buying loans at a furious rate. The more loans they bought, the more income on paper they could claim, but more and more people were defaulting on the bad loans….

Political appointees (not financial guru’s) were placed in charge of Fannie Mae and Freddie Mac; people like Franklin Raines, Jeff Johnson and former Clinton Deputy Attorney General Jamie Gorelick. It was the policy of the Clinton Administration and Congressional Democrats to lean on banks, and Freddie and Fannie to get loans to low income people so that “everyone could have a home” (besides all that loan money out there propped up and somewhat inflated the economy so it helped make the numbers look good).

So let’s add up the cards we have now, the government and Fannie and Freddie, are encouraging banks to give bad loans and Freddie and Fannie would buy them up to help absolve the banks from the risk by buying the high risk loans up. Political appointees with political motivations, rather than sound financial motivations were in charge, and the people the regulators and Fannie and Freddie reported to, was not the SEC, which demands sound accounting practices, but the congressional committees that as policy wanted more loans given out as well, mostly Democrats. Here is step three.

Corruption and influence peddling begin to infect the entire system. While the law made it clear that sound financial principles were to be practiced, political pressure caused people to look the other way. The political cronies running Fannie and Freddie realized that they could make themselves rich with tens of millions of dollars in bonuses by buying more loans to make it seem on paper that they had all this money coming in from people’s house payments as if the loans they owned were good, but they weren’t. Too many of the loans were high risk, they had bought “bad paper”. The bonuses were spread around, but they wanted to keep the cash train flowing and help their fellow political friends so Fannie and Freddie gave $200 million away in political donations, to candidates and partisan organizations, a majority of those being Democrats. Barack Obama and Banking Committee Chairman Chris Dodd were the two biggest recipients of this money in the Senate. Fannie and Freddie had become the money train for the corrupt. The regulators who reported to Congress warned what was going on but members of the banking committee who were getting paid didn’t want to hear it.

And that was step four folks.

President Bush tried to put an end to this in 2003 along with a group of Republican Senators (Dole, Sununu, Chafee, McCain). Congressional Banking leaders Chris Dodd and Barney Frank said that everything was just fine and no reforms were needed.

Before you accuse us of just trying to be partisan and making it all up here is some of the evidence. These attempts to fix the system were blocked by Democrats.

New York Times Excerpt:

September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,” Mr. Oxley said at the hearing. ”We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,” the independent agency that now regulates the companies.

”These irregularities, which have been going on for several years, should have been detected earlier by the regulator,” he added.

“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Here is an OFHEO report form 2006 that warned of what was coming. McCain mentions this report (in a pre-release version) in his remarks. Here is a summary from the OFHEO saying:

The report details an arrogant and unethical corporate culture where Fannie Mae employees manipulated accounting and earnings to trigger bonuses for senior executives from 1998 to 2004.

A large number of Fannie Mae’s accounting policies and practices did not comply with Generally Accepted Accounting Principles (GAAP). The Enterprise also had serious problems of internal control, financial reporting, and corporate governance. Those errors resulted in Fannie Mae overstating reported income and capital by a currently estimated $10.6 billion.

Here is McCain’s Bill and Statements:

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
A bill to address the regulation of secondary mortgage market enterprises, and for other purposes. Here is the text of the bill. HERE is the link to McCain’s remarks on the floor of the Senate. The bottom line, Bush and McCain, who Obama accuses of knowing nothing about the economy and putting us in this mess, predicted it and tried to fix it, while Obama and Dodd and others were taking the largest sums of money from these people. They should have gone public and made a big stink in the press, but Republicans since Nixon have been awful at communications strategy.

The House version of S.190 was H.R. 1461

In fact Senators Sununnu, Hagel, and Dole introduced this legislation repeatedly (link HERE).

While I do not like quoting party sources THIS LINK (now taken down) from GOP.com has some good information, fully sourced, that is pretty spot on. It leaves out that some Republicans were a part of this influence peddling scandal though.

You can also read quotes of what Senators and Representatives said about Fannie Mae and Freddie Mac HERE.

Here is a video of McCain lecturing on the issue:

Step 5 … After the Enron scandal the Congress passed a new regulatory law called Sarbanes-Oxley. This law had a major flaw. It changed the accounting rules laws so that a non-indexed mark to market rule was used.

What it does, according to federal accounting rules, is artificially lower the value of an asset or security that has lost value and artificially inflates an asset’s or security’s value when the market is going up. So when these mortgage securities crashed companies had to say they were worth nothing (because no one wanted to buy them) in spite of the fact that there is a house there that has some value. This problem was a real factor in why things crashed so quickly because it lowered the liquidity rating and solvency rating of those assets artificially.

When the housing market was going up the companies holding them had their rating inflated by them, making it all look dandy on paper and when they crashed they had their rating set artificially low and the company fell below solvency standards.

Former House Speaker Newt Gingrich and many business leaders and economists asked to have this rule fixed; no one in government listened.

Fast forward to today.

Three events in the economy greatly accelerated the rate of default on the loans. Energy prices skyrocketed because of increased global demand and OPEC learned that it could gouge us and we had no immediate way of stopping them. This caused food, transportation, etc. prices to skyrocket and slowed the economy. Many states were raising property taxes and as time went on housing had become so inflated that the market values had to make an adjustment. If the value of homes just went up and up eventually people could not afford to buy a home so the market had to adjust.

Step 6: The number of home loan defaults skyrockets and it all crashes down to the mess we have now.

As you can see, the banking unification of Gramm-Leach-Bliley Act would have been fine if the system was not filled with corruption, cronies, politics, and regulated by Congress. A system could have been set up where high risk loans were made cautiously and generally accepted accounting and finance practices were used. If that was done, we would not be in the spot we are in. This is not and was never a problem with bank unification, it was a problem with influence peddling and political cronyism. What we need are ethics laws that have jail time teeth and regulatory laws that help to protect the regulators from political pressures. For more details on the influence peddling part of this scandal and the political consequences click HERE.

The left and the Obama campaign are saying essentially, “Oh so you Republicans are the big regulators now…what happened to low regulation and free markets” This article is a common example http://www.salon.com/tech/htww/2008/09/19/mccain_the_regulator/index.html.

Those who make such arguments are counting on people’s ignorance. While conservatives believe in less government they do not believe in NO government. It is a proper constitutional role of government to protect people from fraud and theft. A proper policing structure to help ensure safety and stability to prevent fraud and promote ethics is a proper role of government that no conservative would object to. This kind of criticism is just designed to deflect attention away from the real issue here; corruption and influence peddling in Congress.

UPDATE: Famed author and legal scholar Mark Levin gives a highly charged yet factually accurate lecture on how this all came about. Levin is a partisan guy, but the facts he gives are verifiable and the analysis is sound. Levin is furiousabout this scandal so there is some adult language. People should be carted off for influence peddling and bank fraud. Barney Frank and Chris Dodd should be removed from the Banking Committee’s in Congress immediately. Hat Tip Hotair.com for the link, we love you guys.

UPDATE II:Bloomberg Financial News gives a similar analysis to ours today (Monday Sept.22) http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aSKSoiNbnQY0

UPDATE III: Hotair.com comments

UPDATE IV: FBI investigates fraud at Fannie Mae and Freddie Mac… thanks W it’s about freakin’ time.

UPDATE V: Brit Hume covered this story on Sept 23 and came to many of the same facts we did here at IUSB Vision

The Republicans, in a bill co-sponsored by John McCain (see HERE), tried to change the Fannie Mae and Freddie Mac oversight regulations to those that are used by bank regulators (now they answer to the banking committee’s in Congress that set up a small agency to report to the committee’s so Congress KNEW this was coming and have for years). The bill to change the oversight rules was killed in a party line vote with Democrats against it. Alan Greenspan testified in favor of the bill (transcript HERE and HERE) and warned:

If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear.

Hotair.com has the following commentary:

By special request of Ace. Nothing here you haven’t read and/or heard before, but Fox deserves a little publicity for being willing to challenge the narrative. Especially now that we’re about to be told it’s McCain’s campaign manager and his lobbyist pals, not the Democrats they lobbied who actually cast the votes, who are the real culprits in all this. The FBI: Doing the (after-the-fact) oversight job Congress wouldn’t.

UPDATE VI: Bloomberg News covered the story and gives similar information.

UPDATE VII:Fox updated the story and has a devastating new report. The Report mirrors the investigation IUSB Vision Published HERE, HERE, HERE and HERE. Hotair.com comments on this new report from Fox HERE.

UPDATE VIII: Bill Clinton sets the record straight on the Gramm Leach Bliley Act. It was not the deregulation Obama said it was, and it had little to do with the mess we see ourselves in now.

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress’s 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that “deregulation” bill into law, and he knows better.

In BusinessWeek.com, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter.

“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill.”

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as “the architect in the United States Senate of the deregulatory steps that helped cause this mess.” Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him “a bill of goods”?

Mr. Clinton: “Not on this bill I don’t think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.

“But I can’t blame [the Republicans]. This wasn’t something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment.”

We agree that Mr. Clinton isn’t wrong about everything. The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle — oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement.

http://online.wsj.com/article/SB122282635048992995.html?mod=todays_us_opinion

Hotair.com commented on this issue HERE

UPDATE IX: Investors Business Daily and Human Events Magazine came out with a similar analysis (albeit they are a bit more strident in their partisanship) on September 30th, nine days after the IUSB Vision. Once again we beat the big guys. These two articles, especially the one from Human Events, has much evidence we demonstrated or linked too.

UPDATE X: Dennis Prager Explains how this happened on his radio show and famed author and economist Dr. Thomas Sowell’s explanation mirrors our analysis HERE

UPDATE XI – There are two other factors that aided to magnify the crisis. The main thing that is missing in my series of articles is a piece that explains the role of the Federal Reserve. In keeping interest rates artificially below market levels for political reasons, they encouraged bad lending and the housing market bubble. Dr. Hayek wrote a paper on this subject that helped him get the Nobel Prize for Economics.

Another factor that I left out because it gets too much into the weeds of financial technospeak is the “credit default swaps” or CDS. A credit default swap (CDS) is like an insurance policy on an investment. You by the CDS and if your investment tanks the CDS pays you a portion of what you lost. As the housing market became more inflated, and along with it the issued mortgage securities, more people bought this type of insurance. When it all crashed the CDS insurance had to be paid to those who lost and as a result in helped bring down Lehman Brothers, AIG etc.

Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE. – Editor

Chuck Norton

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Other Links, Palin Truth Squad | 16 Comments »

The Audacity of Deception – UPDATED

Posted by iusbvision on September 18, 2008

UPDATE – New Video’s and details added in the post – Also more Washington Post chicanery HERE. Be sure to read the article below before you head for the update

Folks, this has just gone too far. It is amazing how bold a campaign can get with lies when it knows that most of the elite media will cover for it. I don’t like to use the word “lie”, but this has gone so far beyond expected campaign spin that no other word fits.

Read on for Details.

In this ad Obama says that lobbyists work for McCain’s campaign. I campaign this size will employ about 3000 people and in McCain’s case 7 of them are former lobbyists that Obama is criticizing. That is not unusual at all. There are plenty of former lobbyists who work for Barack Obama’s campaign. But what is less common is that there are active lobbyists and former executives of the failed Fannie Mae and Lehman Brothers that cost America billions and billions.

First let’s watch the ad.  

Yesterday, John McCain actually said that if he’s president, he will take on, and I quote, ‘the old boy’s network’ in Washington. I’m not making this up. This is somebody who has been in Congress for 26 years, who put seven of the most powerful Washington lobbyists in charge of his campaign. And now he tells us that he’s the one who is going to take on the old boy’s network. The old boy’s network, in the McCain campaign, that’s called a staff meeting. Come on. – Senator Barack Obama

So why is this ad nonsense– bold hypocrisy because Obama’s campaign really has things to hide. Let’s begin with Franklin Raines and James Johnson.

Franklin Raines was Clinton’s former UMB Director, is a former CEO of Fannie May, was paid a total of $90 MILLION for his tenure at Fannie May, who was forced to resign due to a $6.3 billion accounting debacle he oversaw in 2004. 

James Johnson, former Vice-Chair of Fannie Mae (paid $21 Million) and Managing Director of Lehman Brothers….. Raines and Johnson are the current economic advisers for Barack Obama. Raines was in charge when most of these high risk, sub prime rate loans were being given away; the primary catalyst to Fannie Mae’s collapse. Here is a New York Times article with some good info on Raines.

Click HERE for all the details of the money that was passed to Obama by these failed mortgage lenders. Obama was their favorite candidate. All of the evidence, press reports and government documents proving it are there to inspect. It’s influence peddling that needs to change.

UPDATE: What is hilarious is that the Obama Campaign is now saying that Raines never advised or worked for the campaign. The press has reported that these guys (Raines and Johnson) have been with Obama for months, it is well known. An Obama Campaign spokesman just said on The Fox Report with Shep Smith that these guys “don’t exist”. Is the elite media so in the tank that they won’t blast Obama for this obvious whopper?? We will see.

Hotair.com puts this latest Obama lie to bed and is laughing at the Obama Campaign’s denial:

Here are a few articles of interest about Raines from the Washington Post:

  • March 2005: Perverse executive pay forced Raines out of his job.
  • May 2006: Extensive fraud at Fannie Mae under Raines’ direction, generating over $50 million in bonuses for nonexistent growth.
  • April 2008: Raines gives up $24 million in future payouts to avoid criminal charges in Fannie Mae fraud, although most of that was in worthless options; he pays $2 million in cash.

Note that Raines continued to advise Obama even after that settlement.  It’s not as though Obama didn’t know Raines’ past.  Apparently, he just didn’t care.

Washington Post:

  • 7/16/08: “In the four years since he stepped down as Fannie Mae’s chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself. He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.”
  • 8/28/08: “In the current crisis, their biggest backers have been Democrats such as Senate Banking Committee Chairman Christopher J. Dodd (Conn.) and House Financial Services Committee Chairman Barney Frank (Mass.). Two members of Mr. Obama’s political circle, James A. Johnson and Franklin D. Raines, are former chief executives of Fannie Mae.

Team Obama never objected to this reporting before tonight.  Jim Johnson will almost certainly get the next starring role in a McCain ad, and what will Obama have to say about the man he originally tapped to pick his running mate?

***End of Update  – Back to Original Post***

USA Today had a little fun pointing out the Obama Campaigns hiring of ACTIVE lobbyists such as William Oldaker. oldaker is the treasurer of 23 PACS.

Today to respond McCain had this to say:

Senator Obama talks a tough game on the financial markets but the facts tell a different story.  He took more money from Fannie and Freddie than any Senator but the Democratic chairman of the committee that regulates them.  He put Fannie Mae’s CEO who helped create this disaster in charge of finding his Vice President. Fannie’s former General Counsel is a senior advisor to his campaign.  Whose side do you think he is on? When I pushed legislation to reform Fannie Mae and Freddie Mac, Senator Obama was silent.  He didn’t lift a hand to avert this crisis.  While the leaders of Fannie and Freddie were lining the pockets of his campaign, they were sowing the seeds of the financial crisis we see today and enriching themselves with millions of dollars in payments.  That’s not change, that’s what’s broken in Washington.

McCain is spot on and the proof is HERE. Hotair has posted the complete text of McCain’s comments HERE.

Obama says that this is what happens when there is no regulation. Pelosi said the same thing today. They are lying big time. Fannie Mae and Freddie Mac are among the most regulated and monitored of any enterprise in America. Fannie Mae has 236 federal monitors alone. The Securities Exchange Commission watches the banking industry very closely. The problem is that the regulated are giving huge sums of money to members of Congress that run committee’s that do the regulating.The OFHEO, which regulates and monitors Fannie and Freddie, reports to the banking committee’s in Congress.

Today the Press Secretary for President Bush said in response to Obama and Pelosi, “What specific regulation that they wanted did we block? Which regulation did we eliminate?”

Heritage Foundation says that the “no regulation charge is a myth and backs it up HERE.

Bloomberg: Congress may adjourn and punt the issue. Senate Democrat Leader harry Reid says “No one knows what to do”.

Our Take:

This is an influence peddling scandal. Congress and partisans put pressure on the regulators and monitors to back off till it all blew up.  McCain has said this but he needs to POUND it. To hell with the fancy commercials with perfect radio voice guy, this is exactly the kind of thing Sarah Palin brought down as Governor. Let her loose and start naming names.

This is a huge opportunity for McCain. He predicted this would happen in 2005 and co-sponsored a Bill to fix it. Democrats blocked it. McCain and Palin need to pull the Maverick card and go after Barney Frank, Obama, Chris Dodd, Chuck Schumer, and Bush’s SEC Chairman and former member of Congress Chris Cox as they are the ones primarily responsible for dropping the ball and they are the ones who used their influence to keep the needed reforms from happening and they are the ones who took the money to lean on regulators to look the other way. While most of the influence peddling was done with Democrats, there are some Republicans involved so McCain should go after and “run against” all of them….and once again let Palin loose on this. Have her go on Brit Hume and Gretta as a talking head just to talk about this issue.

UPDATE– McCain calls for the ouster of SEC Charman Chris Cox – a good start. Link below:

 http://thehill.com/campaign-2008/mccain-would-fire-sec-chair-cox-2008-09-18.html

UPDATE II– McCain’s Raines Ad –

And now the Johnson Ad –

McCain Proposes Bi-Partisan Commission to Overhaul Banking Regulations. Democrats Say No and Threaten to take Take Congress Out of Session To Keep It From Happening – Obama Mocks the Very Idea of Commissions……but

Hotair.com has a great post on this:

Yesterday, Barack Obama dismissed a suggestion from John McCain to form a bipartisan commission on the credit-sector meltdown.  He scoffed at the idea, calling it Washington-speak for “We’ll get back to ya.”  Fox News took a look at Obama’s own record on commissions and pointed out that Obama has publicly called for several such panels, including one for American war crimes in Iraq and a monitor for “bipartisanship” in Washington.

As Fox points out and as Francis Beckwith documents, Obama has called for exactly the same kind of panels for:

So let’s get this straight.  Obama called for a bipartisan commission on Wall Street oversight five months ago.  John McCain now agrees with that suggestion.  After McCain agrees, Obama says it’s nothing more than a political dodge?  That’s far worse than John Kerry’s famous flip-flop on the $87 billion in war funding in 2004; it’s an admission that Obama was never serious in the first place.

Thanks for the clarification, Senator Obama.  We’ll get back to ya.

Our Take:

Hotair isn’t a fan of these commissions and neither am I. By their nature they do things by consensus and right now we need leadership to stop the corruption and influence peddling. Getting this done will be a brawl as it would take hundreds and hundreds of millions out of the hands of politicians.

What this does show is that Obama is up to his old tricks again and that McCain has expressed a willingness to work with both sides.

UPDATE: Congressional leaders and members of the administration are having a meeting – no other news available.

 

Obama Uses Rush Limbaugh “Quotes” To Raise Racial Fears Among Hispanics in Spanish Language Ads. The Problem Is that Obama Lifted Words From Limbaugh Recordings That Had Nothing To Do With What Obama Claimed. ABC, Fact-Check etc Pile On – It Was an Editing Chop Job.

This is so grossly dishonest it really speaks volumes to what the Obama Campaign is really all about.

Politico:

The first, “stupid and unqualified,” was from the NAFTA debate of the mid-90s, he recalled.  Limbaugh, a NAFTA proponent,  said in the fall of 1993 he got a call from a listener who was upset at the potential loss of American jobs. Explaining his comments, Limbaugh writes: “I was referring to jobs in MEXICO. I was not discussing immigrants, illegal or otherwise.”

On “shut your mouth,” Limbaugh produced an April 2006 transcript from what he described as a parody of Mexican immigration laws.

The talk show host read a list of stringent rules, adding “shut your mouth and get out,” before revealing to listeners that the guidelines were those set by the Mexican government for immigrants.

Politico/Limbaugh are correct. Mexican immigration laws are super strict. Legal immigrants may not protest and may not speak out on political issues, so “shut up” is accurate. Illegal immigration in Mexico is not tolerated and some are even shot.

Here is Limbaugh’s full statement in context:

Rush Limbaugh, April 6, 2006:

Everybody’s making immigration proposals these days. Let me add mine to the mix. Call it The Limbaugh Laws:

First: If you immigrate to our country, you have to speak the native language. You have to be a professional or an investor; no unskilled workers allowed. Also, there will be no special bilingual programs in the schools with the Limbaugh Laws. No special ballots for elections. No government business will be conducted in your language. Foreigners will not have the right to vote — or hold political office.

If you’re in our country, you cannot be a burden to taxpayers. You are not entitled to welfare, food stamps, or other government goodies. You can come if you invest here: an amount equal to 40,000 times the daily minimum wage. If not, stay home. But if you want to buy land, it’ll be restricted. No waterfront, for instance. As a foreigner, you must relinquish individual rights to the property.

And another thing. You don’t have the right to protest. You’re allowed no demonstrations, no foreign flag waving, no political organizing, no bad-mouthing our President or his policies. You’re a foreigner: shut your mouth or get out! And if you come here illegally, you’re going to jail.

You think the Limbaugh Laws are harsh? Well, every one of the laws I just mentioned are actual laws of Mexico today! That’s how the Mexican government handles immigrants to their country. Yet Mexicans come here illegally and protest in our streets!

How do you say “double standard” in Spanish? How about: “No mas!”

ABC News Jake Tapper:

There are some real factual problems with this ad, which is titled “Dos Caras,” or two faces.

First of all, tying Sen. McCain – especially on the issue of immigration reform – to Limbaugh is unfair.

Limbaugh opposed McCain on that issue. Vociferously. And in a larger sense, it’s unfair to link McCain to Limbaugh on a host of issues since Limbaugh, as any even occasional listener of his knows, doesn’t particularly care for McCain.

Second, the quotes of Limbaugh’s are out of context.

The second quote is totally unfair. In 2006, Limbaugh was mocking Mexican law…

 

Obama Campaign Lies About McCain Quote In Social Security Campaign Ad.

Here is an Ad from Obama and the Democratic Party. At 1:24 into the Ad it says,” John McCain has even said that Social Security is a disgrace”.

Realclearpolitics.com:

“What McCain, in fact, did say was the way that we have neglected Social Security and failed to address its problems a disgrace, a different matter entirely.”

Posted in Campaign 2008, Chuck Norton, Mortgage Crisis, Other Links, Palin Truth Squad | Leave a Comment »

Corruption You Can Believe In: Failed Sub Primes and Mortgage Fraud Lenders Funneled Money to Dodd & Obama the Most. Fannie & Freddie Gave $200 Million to Partisans-Most Went to Democrats! Dodd, Obama Among Top Recipients. Republicans Attempted to Pass Reforms-Blocked by Democrat Leadership!

Posted by iusbvision on September 15, 2008

This story has gotten a bit large and complex – the best bet is to scroll down to where it says “Original Story” – start there and read the updates as numbered in order – Editor

Congress yanked the oil company CEO’s in front of a committee to grill them so why not Fannie Mae?Answer: Franklin Raines, James Johnson, Jamie Gorelick etc… they are all Clinton political appointees.

This story keeps yeielding more information. Every facet of the mortgage crisis story, who benefited and who is lying can be found HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE and HERE.  Be sure to scroll down where it says “Original Story” and then read the updates in order- Editor

***** HERE IS THE ORIGINAL STORY*****

Fannie Mae and Freddie Mac, Country-Wide, Lehman Brothers and the list goes on. All corrupt and all were able to keep federal regulators at bay till the end. So how did they do it? Well the first way you do it is lobby to keep Congress off your back and pay them enough to run interference for you. Fannie Mae and Freddie Mac gave $200 million to politicians and partisan organizations with the vast majority going to Democrats and left wing think tanks. Senator Chris Dodd (D-CT) (By the way Dodd is the Chair of the Senate Banking and Housing Committee and was given a sweetheart loan from Country Wide), Barack Obama and Hillary Clinton being the top recipients. In some cases Senator Chuck Schumer is in the list as well.

While this is certainly a bi-partisan scandal, it is not a balanced one. Those who benefited the most by far are top Congressional Democrats like Dodd and Obama and left wing organizations.

First – Let’s start with the first article about this that appeared in the IUSB Vision HERE. Read it then come back.

Second – Here is the list of politicians that Fannie and Freddie donated to. Just below is the list of the top 12 Senators who received money from Fannie Mae and Freddie Mac which YOU paid for:

Dodd, Christopher J S CT D $165,400 $48,500 $116,900
Obama, Barack S IL D $126,349 $6,000 $120,349
Kerry, John S MA D $111,000 $2,000 $109,000
Bennett, Robert F S UT R $107,999 $71,499 $36,500
Bond, Christopher S ‘Kit’ S MO R $95,400 $64,000 $31,400
Shelby, Richard C S AL R $80,000 $23,000 $57,000
Reed, Jack S RI D $78,250 $43,500 $34,750
Reid, Harry S NV D $77,000 $60,500 $16,500
Clinton, Hillary S NY D $76,050 $8,000 $68,050
Conrad, Kent S ND D $64,491 $22,000 $42,491
Johnson, Tim S SD D $61,000 $20,000 $41,000
Carper, Tom S DE D $55,889 $31,350 $24,539

Nine Democrats and three Republicans. Folks this is why we need people who are willing to take on some in their own party. Obama told us that he was going to be different, that he wasn’t the same old politics as usual. Not only is he more of the same, he is among the WORST and most flagrant of the same. Quasi-governmental organizations should NOT be engaging in any partisan activity period. It is easy to see who their favorite party and candidates are.

In the bail out bill that was passed by Congress, Republican Senator Jim DeMint from South Carolina tried to offer an amendment to prevent taxpayer subsidized quasi-corporations like Fannie and Freddie from abusing the public trust by slicking the palms of politicians. The Democratic Leader Harry Reid refused to allow the amendment up for a vote (Link).

Now Let’s move to Lehmen Brothers Here is the List. Here is the top 12 recipients of money in the Senate

Clinton, Hillary S NY D $409,980 $3,000 $406,980
Obama, Barack S IL D $395,574 $0 $395,574
Schumer, Charles E S NY D $181,450 $25,500 $155,950
Dodd, Christopher J S CT D $165,800 $25,400 $140,400
Lieberman, Joe S CT I $165,450 $10,000 $155,450
Kerry, John S MA D $151,664 $0 $151,664
McCain, John S AZ R $145,100 $1,000 $144,100
Lugar, Richard G S IN R $37,250 $12,000 $25,250
Reed, Jack S RI D $37,100 $7,500 $29,600
Lautenberg, Frank R S NJ D $34,100 $1,000 $33,100
Biden, Joseph R Jr S DE D $33,700 $0 $33,700
Feinstein, Dianne S CA D $32,100 $24,000 $8,100

Of the top 12, only two are Republicans. Take a special look at the top two, who took over double the amounts of cash than those immediately below them. John McCain is on the list but lets take history as a guide, Charles Keating, the wealthy banker, tried to buy influence with John McCain and it didn’t help him much did it? It is easy to see who their favorite party and candidates are.

J. Brown at the famed Politically Drunk Blog has been poring over the donations by these groups has this to say:

Obama has also accepted campaign contributions from dozens of Lehman Brothers Executives, such as CEO Richard Fuld ($2,300), President Joseph Gregory ($4,600) and dozens of other top Lehman Executives. On June 19th, Lehman shareholders filed suit against Fuld and Gregory for the company’s exposure in the subprime market…

Theodore Janulis– Bundler (over $50,000) & Lehman Brothers Head of Global Mortgages
Francisco Borges– Bundler (over $50,000) and Chairman of Landmark Partners a private equity real estate firm.
Nadja Fidelia– Bundler (over $50,000) & Managing Director of Lehman brothers
John Rhea– Bundler & Co-head of Lehman Brothers Global Investment Banking

The listing of contributions flowing in from Financial Institutions through Senator Obama’s career is short of amazing. There are currently dozens upon dozens of Senior Vice Presidents, Managing Directors, and other top level executives from firms such as Lehman Brothers, Wachovia, Washington Mutual, Citigroup, Wells Fargo, UBS, DeutscheBank, Merrill Lynch, Goldman Sachs, Bank of America, JP Morgan Chase, Morgan Stanley and other high profile Wall Street banks and funds mired in the mortgage meltdown.

Obamahas been relentless in his attacks upon the “evil” Wall Street executives that he has blamed for the ongoing fallout from the mortgage crisis, positioning himself on a “moralhigh ground”. The reality is that while Obamahas been slapping the mortgage companies andinvestment banks with one hand, he has had his other hand in their wallet.

It gets worse– In addition, Obama has received tens of millions of dollars from Law firms and attorneys specializing in Corporate representation:

Those who are familiar with Sidley Austin LLP understand that the firm is a large, international law firm with a large presence within the financial services and insurance industry. For instance, the firm was just recognized by Alpha Magazine as the top firm for Hedge Funds for the secondyear along with consistently ranking as a top corporate law firm. Obama has also accepted more than $280,000 from Skadden, Arp, et al… employees, a firm that was recently recognized as the “Best Corporate Law Firm In The United States” for the eighth consecutive year by Corporate Board Member. Skadden is another large Law firm specializing in practices related to investment banking and representing clients such as Merrill Lynch. In addition to the aforementioned law firms, Jones Day, Latham & Watkins, & Wilmerhale LLP are all large law firms and top 20 contributors to the Obama campaign. All three of these law firms also specialize in corporate law and ranking among the top ten “corporate law firms” by the Corporate Board Member.

It still gets worse –  read HERE & HERE .

This is the kind of stuff Governor Palin put an end to in Alaska with the energy company influence and corruption.

UPDATE: McCain Speaks Blames the very system that we are exposing here – While Obama blames Bush & McCain for this…..Hotair.com posts the transcript: 

Palin Speaks: Our regulatory Structure needs a complete overhaul. John McCain and I are going to put an end to this. No more multi-million dollar payouts and golden parachutes to those who violate the public trust. Blames lobbyist rules. The old oil monopoly that controlled my state, I broke it and the good ole’ boy network of lobbyists and special interests that used to run things up there, what ever they are running now it’s NOT the state of Alaska:  

UPDATE II – Barack Obama campaign economic adviser James Johnson led a fierce lobbying campaign to fight reform of Freddie and Fannie. Link Here & Here and thanks to Instapundit for the headsup. Johnson is a former executive of Fannie Mae and Lehman Brothers…

Instapundit: “So it would appear that this is precisely what Obama has been railing against: Washington insiders lining the pockets of other Washington insiders while the taxpayers ultimately have to foot the bill. The Agent of Change, it seems, didn’t exactly walk the walk on this one.”

UPDATE III: Megan McArdle at The Atlantic Magazine slams Obama for blaming this on Bush calling it “High-test Hooey”. Megan’s analysis is a good one, but I wish she addressed the influence peddling issue I addressed, because that is a part of this problem. Malkin comments HERE.

UPDATE IV: Hillarious Bias! Huffington Post and New York Times go all out saying that people from the “failed bank” Merrill Lynch were some of McCain’s top contributors. REALITY CHECK – Merrill Lynch didn’t fail, it was bought. What they fail to mention is the information in this post, which shows Fannie Mae and Freddie Mac and Lehmen Brothers – all of which did fail – all had a favorite candidate that they lined with cash before they went under and that was Barack Obama. HERE is the link to the NYT story.

UPDATE V: Obama Lied. Bush tried to get a Freddie Mac and Fannie Mae regulatory overhaul in 2003 – Democrats stopped it!

New York Times Excerpt:

September 11, 2003
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

”The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,” Mr. Oxley said at the hearing. ”We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,” the independent agency that now regulates the companies.

”These irregularities, which have been going on for several years, should have been detected earlier by the regulator,” he added.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

Hat Tip to Hotair.com for the heads up on this 2003 piece. They comment further on this HERE. It is no secret that the Democrats and the Clinton Administration pushed mortgage lendors to make more high risk loans for “affordable housing” to help prop up the economy. Former Clinton Sec. of Labor Robert B. Reich has been making some talk show rounds saying the same thing and being critical of that policy. Hotair sounded off on this NYT story HERE.

UPDATE VI: Look who was minding the store!

David Frum reports for the National Post:

The two institutions have long been run not by bankers but by retired political figures, predominantly Democrats. From 1991 to 1998, Fannie Mae was headed by James Johnson, a longtime aide to former Democratic vice president Walter Mondale. Johnson’s successor, Franklin Raines, had served as budget director to Bill Clinton. Jamie Gorelick, vice chair of Fannie Mae from 1998 to 2003, served as deputy attorney general in the Clinton administration.

These figures have paid themselves impressive private-sector salaries. Johnson earned US$21-million in just his last year at Fannie Mae. Raines earned US$90-million for five years’ work at Fannie Mae. Gorelick got US$26-million.

Franklin Raines was Clinton’s former UMB Director, is a former CEO of Fannie May, was paid a total of $90 MILLION for his tenure at Fannie May, who was forced to resign due to a $6.3 billion accounting debacle he oversaw in 2004, and James Johnson former Vice-Chair of Fannie Mae and Managing Director of Lehman Brothers….. Raines and Johnson are the current economic advisors for Barack Obama. Raines was in charge when most of these high risk, sub prime rate loans were being given away; the primary catalyst to Fannie Mae’s collapse. The people who oversaw the Country-Wide scandal were working for Obama as well. Here is a New York Times article with some good info on Raines.

In the mean Time Democrat Speaker Nancy Pelosi says that “the Democrats bear no responsibility for the current crisis”. Real nice nancy – too bad the public record overwhelmingly proves otherwise.

UPDATE VII: CONGRESS KNEW – McCain Tried to Fix Fannie Mae in 2005 – Democrats Blocked!

This is huge folks.

CONGRESS KNEW – Here is an OFHEO report form 2006 that warned of what was coming. McCain mentions this report (in a pre-release version) in his remarks. Here is a summary from the OFHEO saying:

The report details an arrogant and unethical corporate culture where Fannie Mae employees manipulated accounting and earnings to trigger bonuses for senior executives from 1998 to 2004.

A large number of Fannie Mae’s accounting policies and practices did not comply with Generally Accepted Accounting Principles (GAAP). The Enterprise also had serious problems of internal control, financial reporting, and corporate governance. Those errors resulted in Fannie Mae overstating reported income and capital by a currently estimated $10.6 billion.

Here is McCain’s Bill and Statements:

S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
A bill to address the regulation of secondary mortgage market enterprises, and for other purposes. Here is the text of the bill.

Sen. Charles Hagel [R-NE]
Sen. Elizabeth Dole [R-NC]
Sen. John McCain [R-AZ]
Sen. John Sununu [R-NH]

So now we know that at least TWICE Republicans saw this coming and tried to fix it, and twice the Democrats blocked it and what did Barack Obama and Joe Biden do to fix this – NOTHING.

HERE is the link to McCains remarks on the floor of the Senate. Here is an excerpt and read it CAREFULLY:

Senator John McCain (R-AZ) (2005) Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

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.

I urge my colleagues to support swift action on this GSE reform legislation.

Lot’s of blogs did some great research on this issue.
Hotair.comBeltwaysnark.com – Hey Look National Review caught up with us today (we like you guys).

UPDATE VIII: McCain goes off on Obama for lying about the record
Hat Tip Hotair.com

UPDATE IX: What is hilarious is that the Obama Campaign is now saying that Raines never advised or worked for the campaign. The press has reported that these guys (Raines and Johnson) have been with Obama for months, it is well known. An Obama Campaign spokesman just said on The Fox Report with Shep Smith that these guys “don’t exist”. Is the elite media so in the tank that they won’t blast Obama for this obvious whopper?? We will see.

Hotair.com puts this latest Obama lie to bed and is laughing at the Obama Campaign’s denial:

Here are a few articles of interest about Raines from the Washington Post:

  • March 2005: Perverse executive pay forced Raines out of his job.
  • May 2006: Extensive fraud at Fannie Mae under Raines’ direction, generating over $50 million in bonuses for nonexistent growth.
  • April 2008: Raines gives up $24 million in future payouts to avoid criminal charges in Fannie Mae fraud, although most of that was in worthless options; he pays $2 million in cash.

Note that Raines continued to advise Obama even after that settlement.  It’s not as though Obama didn’t know Raines’ past.  Apparently, he just didn’t care.

Washington Post:

  • 7/16/08: “In the four years since he stepped down as Fannie Mae’s chief executive under the shadow of a $6.3 billion accounting scandal, Franklin D. Raines has been quietly constructing a new life for himself. He has shaved eight points off his golf handicap, taken a corner office in Steve Case’s D.C. conglomeration of finance, entertainment and health-care companies and more recently, taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters.”
  • 8/28/08: “In the current crisis, their biggest backers have been Democrats such as Senate Banking Committee Chairman Christopher J. Dodd (Conn.) and House Financial Services Committee Chairman Barney Frank (Mass.). Two members of Mr. Obama’s political circle, James A. Johnson and Franklin D. Raines, are former chief executives of Fannie Mae.

Team Obama never objected to this reporting before tonight.  Jim Johnson will almost certainly get the next starring role in a McCain ad, and what will Obama have to say about the man he originally tapped to pick his running mate?

UPDATE X: McCain’s new “Raines and Johnson” ads and new Washington Post chicanery trying to cover for Obama on this mess – Details HERE. Excerpt teaser:

While John McCain tried to reform Fannie Mae and Freddie Mac, Obama took boatloads of their money.  While Obama talked reform and demonized CEOs, he took as advisers the very people responsible for Fannie Mae’s failure.  Which candidate will bring change, and which will bring more of the same?

UPDATE XI: McCain points the economic probblems out as the influence peddling scandal that it is. Our analysis was spot on and ahead of the curve. McCain:

“We’ve heard a lot of words from Senator Obama over the course of this campaign. But maybe just this once he could spare us the lectures, and admit to his own poor judgment in contributing to these problems. The crisis on Wall Street started in the Washington culture of lobbying and influence peddling, and he was square in the middle of it.”

After you are done reading the article and the updates, I have written a long term history of how this scandal came about in steps, and it’s in plain English HERE.

UPDATE XII: Bloomberg Financial News gives a similar analysis to ours today (Monday Sept.22) http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aSKSoiNbnQY0

UPDATE XIII: Brit Hume covered this story on Sept 23 and came to the same conclusion as we did here at IUSB Vision.

The Republicans, in a bill co-sponsored by John McCain (see HERE), tried to change the Fannie Mae and Freddie Mac oversight regulations to those that are used by bank regulators (now they answer to the banking committee’s in Congress that set up a small agency to report to the committee’s so Congress KNEW this was coming and have for years). The bill to change the oversight rules was killed in a party line vote with Democrats against it. Alan Greenspan testified in favor of the bill (transcript HERE) and warned:

If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crisis. … As I concluded last year, the GSEs need a regulator with authority on a par with banking regulators, with a free hand to set appropriate capital standards, and with a clear and credible process sanctioned by the Congress for placing a GSE in receivership, where the conditions under which debt holders take losses are made clear.

Hotair.com has the following commentary:

By special request of Ace. Nothing here you haven’t read and/or heard before, but Fox deserves a little publicity for being willing to challenge the narrative. Especially now that we’re about to be told it’s McCain’s campaign manager and his lobbyist pals, not the Democrats they lobbied who actually cast the votes, who are the real culprits in all this. The FBI: Doing the (after-the-fact) oversight job Congress wouldn’t.

UPDATE XIV: Bloomberg News covered the story again with video and gives similar information as we have already given you here.

UPDATE XV: Fox updated the story and has a devastating new report. The Report mirrors the investigation IUSB Vision Published HERE, HERE, HERE and HERE. Hotair.com comments on this new report from Fox HERE.

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