The Trillion-Dollar Shakedown That Bodes Ill For Cities , Howard Husock, City Journal, Winter 2000 “.....By intervening—even just threatening to intervene—in the CRA review process, left-wing nonprofit groups have been able to gain control over eye-popping pools of bank capital, which they in turn parcel out to individual low-income mortgage seekers.....(Bruce) Marks is unhesitatingly candid about his intent to use NACA to promote an activist, left-wing political agenda. NACA loan applicants must attend a workshop that celebrates—to the accompaniment of gospel music—the protests that have helped the group win its bank lending agreements....The home mortgage business is his tool for political organizing...This policy—"America's best mortgage program for working people," NACA calls it—is an experiment with extraordinarily high risks....Looking into the future gives further cause for concern: "The bulk of these loans," notes a Federal Reserve economist, "have been made during a period in which we have not experienced an economic downturn." The Neighborhood Assistance Corporation of America's own success stories make you wonder how much CRA-related carnage will result when the economy cools....It will take a Republican president to change or abolish CRA, so firmly wedded to it is the Clinton administration and so powerfully does it serve Democratic Party interests.....”
Burning down the house: What Caused Our Economic Crisis
(1st October 2008) Burning down the house: What Caused Our Economic Crisis, is an unusual youtube presentation that gets your attention and gets to the guts of the economic calamity on Wall Street. The main players involved here going back many years are Jimmy Carter, Bill Clinton. Check it out for yourself. You'll see that both Bush and McCain identified the problem as far back as 2001 but were hobbled and hamstrung by the Democrats from doing anything about it. As we know, leftwing social engineering is all about the politics of the Warm Inner Glow except, as usual that feel-good Warm Inner Glow is coming from the house burning down. Literally!!
A Second Mortgage Disaster On The Horizon?
(13Jan09) “.....As it turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. In the executive suites of Wall Street and Washington, you're beginning to hear alarm about a new wave of mortgages with strange names that are about to become all too familiar. If you thought sub-primes were insanely reckless wait until you hear what's coming......The trouble now is that the insanity didn't end with sub-primes. There were two other kinds of exotic mortgages that became popular, called " Alt-A " and " option ARMs ” A Second Mortgage Disaster On The Horizon? “....The option ARMs, in particular, lured borrowers in with low initial interest rates - so-called teaser rates - sometimes as low as one percent. But after two, three or five years those rates "reset." They went up. And so did the monthly payment. A mortgage of $800 dollars a month could easily jump to $1,500. Now the Alt-A and option ARM loans made back in the heyday are starting to reset, causing the mortgage payments to go up and homeowners to default....”
A damning chronology of warnings and alarm bells going back as far as April 2001 – and it seems that we now have the Democrats as the arsonists now turning up to play the firemen.
( 14 Oct 08) “.....In 1995, President Clinton mandated new regulations that coerced banks to make significantly more subprime loans to inner-city residents previously viewed as unqualified buyers in high-risk areas. Banks were rated on how well they complied and faced big fines if they didn't do what government regulators wanted. The government's worst decision was allowing and encouraging banks, for the first time, to bundle these subprime loans in giant packages with prime loans..... April 2001 : The Bush administration's fiscal budget stated that the size of Fannie and Freddie was "potential problem because financial trouble of a large Government-Sponsored Enterprise could cause repercussions in financial markets, affecting federally insured entities and economic activity." • May 2002 : The Office of Management and Budget wanted disclosure and governance principles in Bush's 10-point plan for corporate responsibility to apply to Fannie and Freddie. • February 2003 : A federal housing oversight report warned that unexpected problems at Fannie Mae could immediately spread into financial sectors.....” America's Second Wake-Up Call , Investor Business Daily, “.... • September 2003 : Treasury Secretary John Snow, in testimony to the House Financial Services Committee, recommended that Congress enact legislation to create new agency to regulate and supervise financial activities of housing-related government entities to set prudent and appropriate minimum capital requirements.Rep. Frank, the committee's ranking member, strongly disagreed, saying: "Fannie Mae and Freddie Mac are not facing any kind of financial crisis . . . . The more people exaggerate these problems, the more pressure there is on these companies, the less we'll see in terms of affordable housing." • February 2004 : The president's new budget again highlighted risks of the explosive growth of these government enterprises and the then-low levels of required capital. It also called for the creation of a world class regulator. The administration determined that housing regulators of government agencies lacked the power and stature to meet their responsibilities and should be replaced with a strong new third regulator . •February 2004 : Greg Mankiw, chairman of Bush's Council of Economic Advisers, cautioned Congress against taking the strength of financial markets for granted. He too called for reducing the risk by ensuring that housing GSEs are overseen by an effective regulator. • April 2004 : Rep. Frank ignored warnings, accusing the administration of creating an "artificial issue." "People pay their mortgages," he told a group of mortgage bankers. "I don't think we are in any remote danger here. This focus on receivership, I think, is intended to create fears that aren't there. • July 2005 : Senate Majority Leader Harry Reid rejected legislation on reforming Fannie and Freddie. "While I favor improving oversight by our federal housing regulators to ensure safety and soundness, we cannot pass legislation that would limit Americans from owning homes and harm our economy in the process," he said • August 2007 : Sen. Dodd, another Democrat, ignored President Bush's emphatic calls for Congress to pass Fannie and Freddie reform legislation and called for him to immediately reconsider his ill-advised position....”
ACORN is an acronym for Association of Community Organizations for Reform Now
( 11 Oct 08) “.....You've got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don't despair: You can still buy a house.” So began an April 1995 article in the Chicago Sun-Times that went on to direct prospective home-buyers fitting this profile to a group of far-left “community organizers” called ACORN, for assistance. In retrospect, of course, encouraging customers like this to buy homes seems little short of madness. At the time, however, that 1995 Chicago newspaper article represented something of a triumph for Barack Obama. That same year, as a director at Chicago's Woods Fund, Obama was successfully pushing for a major expansion of assistance to ACORN... ACORN's entirely deserved reputation for militance is balanced by its less-well-known “inside strategy.” ACORN has long employed Washington-based lobbyists who understand very well how the legislative game is played.... Critics of the notion that CRA had a major impact on the subprime crisis ask how a law passed in 1977 could have caused a crisis in 2008? The answer has a lot to do with ACORN — and the critical years of 1990-1995. While the 1977 Community Reinvestment Act did call on banks to increase lending in poor and minority neighborhoods, its exact requirements were vague, and therefore open to a good deal of regulatory interpretation.....” Planting Seeds of Disaster , Stanley Kurtz “.... ACORN's efforts to undermine credit standards in the late 1980s taught it a valuable lesson. However much pressure ACORN put on banks to lower credit standards, tough requirements in the “secondary market” run by Fannie Mae and Freddie Mac served as a barrier to change.... By July of 1991, ACORN's legislative campaign began to bear fruit. As the Chicago Tribune put it, “Housing activists have been pushing hard to improve housing for the poor by extracting greater financial support from the country's two highly profitable secondary mortgage-market companies..... Finally, in June of 1995, President Clinton, Vice President Gore, and Secretary Cisneros announced the administration's comprehensive new strategy for raising home-ownership in America to an all-time high. Representatives from ACORN were guests of honor at the ceremony..... In his remarks, Clinton emphasized that: “Our homeownership strategy will not cost the taxpayers one extra cent.... Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts.... ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN's economic madness every step of the way....”
Given the international dimension and magnitude, and the international ramifications of this economic tsunami, and the associated trashing of share markets, and super and pension funds and the damage to just about every economy on the planet costing hundreds of billions of dollars, it is beyond comprehension that specific individuals can't be brought to account. It's even more difficult to believe that Obama looks like a very big chance for the Whitehouse.
( 15 Oct 08) “....As evidenced by Barack Obama 's rise in the polls immediately following the financial collapse of mortgage giants Fannie Mae and Freddie Mac, few Americans understand that for many years Fannie and Freddie have been, first and foremost, tools of Democratic politicians, funders of the Democratic Party, and, in the words of a former Fannie CEO, the intimate “friends” and “family” of the Democratic Party's left wing. Nor are most Americans aware that Fannie and Freddie, through their eponymous grant-making foundations, have funneled literally hundreds of millions of dollars in recent years to a host of leftist groups and causes that work to promote Democratic agendas, causes, and policies. To set the record straight, it is worthwhile to examine the connections between Fannie, Freddie, and the Democratic Party.... A full account of the recent financial collapse of Fannie Mae and Freddie Mac must consider the role of the Clinton administration... Now that the crisis has arrived, Democratic finger-pointing has become the order of the day. Leading the charge, Barack Obama not only blames Republicans, but tacitly blames capitalism as a whole, referencing it by the pejorative code name of “trickle-down” economics . Yet, Obama makes no mention of the fact that the Bush administration exhorted Congress for years to set up an agency to regulate lending institutions like Fannie Mae and Freddie Mac.....” Fannie, Freddie and the Left , John Perazzo, FrontPageMagazine “.....Nor does he mention that John McCain demanded similar oversight, only to be rebuffed by Democrats like House Financial Services Committee Chairman Barney Frank, who continued to favor the issuance of the subprime loans that have now caused the mortgage market to collapse....Since the 1990s, indeed, Fannie Mae and Freddie Mac have been in the Democratic Party's hip pocket. From 1991 to 1998 , for example, Fannie Mae was headed by James Johnson, a longtime aide to former Democratic vice president Walter Mondale.... To gain a fuller appreciation for just how closely the mortgage companies were allied with the Democratic Party and its surrogates, one might look at the grant-making arms of Fannie and Freddie — specifically, the Fannie Mae Foundation and the Freddie Mac Foundation. The former was established in 1968, the latter in 1991. Together, they hold combined assets exceeding $285 million, and each year they give tens of millions of dollars (nearly $89 million in 2006 alone) in grants to predominantly leftwing organizations that promote a host of pro-Democrat agendas....”