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Joined: 10/8/2005
Msg: 76
CA Real Estate (#2)Page 4 of 8    (1, 2, 3, 4, 5, 6, 7, 8)
Watch the videos

1977 Community Reinvestment Act, Barack Obama, and John McCain

If you’re going to debate this current financial market crisis or criticize the efforts to mitigate it, you HAVE to read this article by Noel Sheppard at

…The Carter-era Community Reinvestment Act forced banks to lend to uncreditworthy borrowers, mostly in minority areas.

Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race……

That’s the guts of what’s happening now. I don’t hear Obama mentioning it. And, I guarantee you won’t hear about it on CNN, ABC, CBS, MSNBC, NBC, or Daily Kos.

Something else you won’t hear any of them mention, John McCain’s speech in 2005:

“If Congress does not act,” McCain said in 2005, “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.”

Why he stumbled on this issue early in the week is beyond me. He should have just cited what he said three years ago.

And, the very last thing they’ll mention is this chart from IBD:
Fannie Mae and Freddie Mac financials contributions from 1989-2008 (from IBD)

Fannie Mae and Freddie Mac financials contributions from 1989-2008 (from IBD)

Although you’ll find Barack Obama has done quite well in a very short time, you’ll also find Hillary Clinton and Nancy Pelosi have done quite nicely as well. Of course, with the media not the least bit concerned about showing their preference for the candidate of their choice, Obama has nothing to worry about.

But, if you’ve read any of this, you’ll have an answer the next time Obama blames this on McCain, or Pelosi blames it on Bush.

Fact is, this is what you get when you compel liberal policies on the private business sector.

And you know what, even in this meltdown, Democrats are STILL trying to compel lendors to expand subprime mortgage loans to high risk areas:

Revises the duty of the enterprises to serve underserved markets. Requires them to purchase or securitize mortgage investments and to improve the distribution of investment capital available for mortgage financing for underserved markets such as: (1) manufactured housing; (2) affordable housing preservation; (3) subprime borrowers; (4) community development financial institutions; (5) assisting depository institutions in meeting their obligations under the Community Reinvestment Act; and (6) rural and other underserved markets.

The heart of that? “meeting their obligations under the Community Reinvestment Act“. Folks, that’s a bill submitted by Democrat Jack Reed less than a year ago. Although it’s not gotten very far, it just shows that the Democrats in Congress don’t have the slightest clue about what led to all this.

That’s what caused this meltdown. When risk based institutions are not allowed to mitigate their risk, they are compelled to fail.

Henry Paulson has crafted a plan to bail out the finance industry for the very short run. It’s brilliant. However, unless Congress has the balls to gut the Community Reinvestment Act, we’ll just be doing this again in ten years or less.

If cities and states are worried about slums and people not being able to get loans in high crime areas, then do something about the crime so that the risk is mitigated. Once that risk is mitigated, then the private sector will be more than happy to develop it.

Part 2

Bush Proposed Fannie Mae / Freddie Mac Supervision In 2003
Tue, Sep 16, 2008 at 12:21 pm Posted by Steven in Economy 34 Comments

A September 11, 2003 New York Times article shows that President Bush proposed “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac.

Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats.

Both entities were recently taken over by the government, a move that puts trillions of taxpayer dollars at risk.

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 plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

But Democrats in Congress, also known as “the caucus perpetually on the wrong side of history,” were having none of this “responsibility” stuff.

”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.

The proposal worked its way around Congress for a couple of years. Efforts at reform of the kind proposed by President Bush were shot down by Democrats each time.

In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie’s lobbyists set out to weaken it.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, [Democrat in bed with the mortgage industry Chris] Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

According to, between 1988 and 2008 Dodd received $133,900, Kerry $111,000, Clinton $75,550, and Obama — in only 143 days in the Senate — received a whopping $105,849 from Fannie Mae and Freddie Mac.

Pennsylvania Democrat representative Paul Kanjorksi, who also opposed new Fannie Mae and Freddie Mac regulations, was given more than any other member of the House of Representatives. He was paid $65,500 by representatives of these entities.

And, in case you were wondering, John McCain co-sponsored a bill requiring greater Fannie Mae / Freddie Mac regulation in 2005. It was also blocked procedurally by Democrats.
Joined: 10/8/2005
Msg: 77
CA Real Estate (#2)
Posted: 10/14/2010 9:07:22 AM
There are $1.4 Quadrillion in mortgage derivatives world wide, and they will come due soon. If you think the last crash was bad. Yes I said $1.4 Quadrillion!

Foreclosure Fraud: 6 Things You Need To Know About The Crisis That Could Potentially Rip The U.S. Economy To Shreds

The Economic Collapse
Oct 14, 2010

The foreclosure fraud crisis seems to escalate with each passing now. It is being reported that all 50 U.S. states have launched a joint investigation into alleged fraud in the mortgage industry. This is a huge story that is not going to go away any time soon. The truth is that it would be hard to understate the amount of fraud that has gone on in the U.S. mortgage industry, and we are watching events unfold that could potentially rip the U.S. economy to shreds. Many are now referring to this crisis as “Foreclosure-Gate“, and already it is shaping up to be the worst thing that has ever happened to the U.S. mortgage industry. At this point, it seems inevitable that some financial institutions will go under as a result of this mess. In fact, by the end of this thing we might see a whole bunch of lending institutions crash and burn. This crisis is very hard to describe because it is just so darn complicated, but it is worth it to try to dig into this thing and understand what is going on because it has the potential to absolutely decimate the entire U.S. mortgage industry.

The truth is that there was fraud going on in every segment of the mortgage industry over the past decade. Predatory lending institutions were aggressively signing consumers up for mortgages that they knew they could never repay. Many consumers were also committing fraud because a lot of them also knew that they could never possibly repay the mortgages. These bad mortgages were fraudulently bundled up and securitized, and these securitized financial instruments were fraudulently marketed as solid investments. Those who certified that these junk securities were “AAA rated” also committed fraud. Then these securities were traded at lightning speed all over the globe and a ton of mortgage paperwork became “lost” or “missing”.

Then, when it came time to foreclose on these bad mortgages, a whole bunch more fraud started being committed. The reality is that the “robo-signing” scandal is just the time of the iceberg. The following are six things that you should know about how deep this foreclosure fraud crisis really goes….

#1 According to the Associated Press, financial institutions were hiring just about whoever they could find, including hair stylists and Wal-Mart employees, as “foreclosure experts” to help them rush through the massive backlog of foreclosures that were rapidly piling up.

Apparently many of these “foreclosure experts” barely even knew what a “mortgage” was according to the AP….

In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn’t define the word “affidavit.” Others didn’t know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers’ accusations about document fraud.

#2 There is soon going to be a colossal legal scramble to figure out who actually owns millions of U.S. mortgages.

In his recent article entitled “Invasion Of The Robot Home Snatchers“, Robert Scheer described the complete and total mess that the U.S. mortgage industry has created….

How do you foreclose on a home when you can’t figure out who owns it because the original mortgage is part of a derivatives package that has been sliced and diced so many ways that its legal ownership is often unrecognizable? You cannot get much help from those who signed off on the process because they turn out to be robot signers acting on automatic pilot. Fully 65 million homes in question are tied to a computerized program, the national Mortgage Electronic Registration Systems (MERS), that is often identified in foreclosure proceedings as the owner of record.

Meanwhile, more organizations are stepping forward to help homeowners fight foreclosures. National People’s Action, PICO National Network, Industrial Areas Foundation, Alliance of Californians for Community Empowerment and the Northwest Federation of Community Organizations have all partnered with the SEIU to launch the “Where’s The Note” campaign which is going to encourage homeowners to demand to see the note before submitting to a foreclosure. Campaigns such as this are going to make foreclosures much more costly for banks.

#3 Legal battles over foreclosure documents could soon spawn thousands upon thousands of lawsuits across the United States.

Adam Levitin, a Georgetown University Law professor who specializes in mortgage finance and financial regulatory issues was recently quoted in an article on CNBC as saying the following about the situation we are currently in….

The mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you’re stealing my money. You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.

#4 The problems with foreclosure paperwork may be more widespread than anyone would have dared to imagine.

Attorney Richard Kessler recently conducted a study in which he found “serious errors” in approximately 75 percent of the court filings related to home repossessions that he examined. Now he says that the foreclosure crisis could haunt the U.S. mortgage industry for the next ten years….

“Defective documentation has created millions of blighted titles that will plague the nation for the next decade.”

#5 If some banks discover that they are missing the paperwork for large numbers of mortgages (as is currently being alleged), those banks could be forced to significantly revalue those assets (as in “close to zero”) on their balance sheets.

John Carney of CNBC recently described it this way….

The most damaging thing that could happen to banks would be the discovery that they simply cannot prove they hold a mortgage on a house. In that case, the loan would probably have to be written down to near zero. Even for current loans, the regulatory reserve requirements would double as the loan would no longer be a functional mortgage but an ordinary consumer loan. Depending on the size of the “no docs” portion of the loan portfolio, this might be a minor blip or require a bank to raise new capital to fill the hole in the balance sheet.

#6 Renowned investor Jim Sinclair is actually warning that the collapse of securitized mortgage debt could be the “final shot” that will wipe out many financial institutions across the United States.

The recent warning that Sinclair posted on his blog is more than a little sobering….

I am asking for your attention again because of the depth of the fraud and now the size of the securitized mortgage debt OTC derivative pile of garbage that is in the trillions. This entire mountain of weapons of mass financial and social destruction is now in question. I have been telling you this for more than 2 years since the manufacturers and distributors of this crap were called by the NY Fed due to the loss of control over the paperwork.

I had dinner with my former partner, then lead director of and CEO of Bear Stearns. I could not contain myself so I asked him why he did so much business in OTC derivatives which were certain to bankrupt them. The answer I got was it was more than 50% of their profit. The right answer should have been it was more than 80% of their earnings.

Securitized mortgage debt is going to be the final shot that kills all kinds of financial entities in the Western world. The biggest holder of this putrid junk is pension funds.

Meanwhile, the stock market continues to go up, up, up as if everything is right in the world and as if a juicy new bull market is now upon us.

Well, let’s all join hands and sing happy songs around the campfire.

Perhaps if we all close our eyes and wish real hard all of this foreclosure fraud will just go away.

Then again, maybe not.
Joined: 3/17/2008
Msg: 78
CA Real Estate (#2)
Posted: 10/14/2010 10:06:46 AM
Fzr, not minimizing the global financial disaster, but to hold up a foreclosure (non-payment per terms of mortgage) because the underlying asset's title may be confused is to miss the point entirely.

The asset (home mortgage) is upside down and non-performing. Getting the asset (home with new performing owner) performing and reestablish market pricing should be the first order of business. 1/3 of sales taking place today are foreclosure sales. The people who want to freeze the market pricing mechanisms because banks may have not dotted the i's is nonsensical.

It's ultimately a boon to underemployed lawyers and upside down home possessors looking for a payout for specious victim claims. There is nothing new about this story, when financial institutions packaged these mortgages and sold them throughout the world with the support of the Chris Dodd's and Barney Frank's of the world promising the US would do right by the AAA rating.... was the original sin. Government invovlement in risk assessment always leads to this end. Using confusing words and concepts like "derivatives" just distances the reader from the truth... government used financial institutions as a mechanism to pump an economy into a position guaranteed to BUST. (I say confusing because I have a Wharton MBA on my staff with a 25 year career in financial instruments who cannot get his mind around this. being a democrat he also sees nothing wrong with government taking an interest in picking winners and losers...i guess which takes us back to the first're not terribly bright if you think government should be a player in business).
Joined: 10/8/2005
Msg: 79
CA Real Estate (#2)
Posted: 10/14/2010 10:51:13 AM
GC non of this is the fault of the free market, it is the result of government interventionists, but they will blame it on the free market. This is another case of GM and such, crash the market and the fed steps in.

As you well know "Cloward and Piven" crash it and transform it to what you want.

Obama and his cronies and many Repubs as well as the bankers are all in bed together, as the bankers will get richer and Obama will get his "Fundamental Transformation of America" on the taxpayer dime.

The fed will take over the housing market through Freddie and Fannie and then people that apply for Sec 8 housing, will get a devalued house and make the payments to the fed.

FDR's second bill of rights, which I fundamentally disagree with. They are half way there as you can see from my comments at the end of each right.
Among these are:

The right to a useful and remunerative job in the industries or shops or farms or mines of the nation; (Unions)

The right to earn enough to provide adequate food and clothing and recreation;

The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;

The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;(De- industrialization of America)

The right of every family to a decent home; (Fannie & Freddie)

The right to adequate medical care and the opportunity to achieve and enjoy good health; (Health Care Bill)

The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;(SSI)

The right to a good education.(Took over student Loans)

All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.

For unless there is security here at home there cannot be lasting peace in the world.
Joined: 3/17/2008
Msg: 80
CA Real Estate (#2)
Posted: 10/14/2010 12:58:38 PM
Peace. Bush's economy got a lot of lift out of this housing boom and some us us knew it while it was happening. I think by 2004-2005 Bush's team realized they had ridden this horse a bit too far and too long and attempted to reel it in with tighter money, tighter standards, re-regulating, etc. The dem's (see prior video's) screamed racism and class envy on Bush. The kiss of death, the third rail in this country is to be declared a racist which essentially stifled regulation....until it crashed, then the Bush screwed up folks found their voice and gave us O'bumbler.
Joined: 1/31/2009
Msg: 81
view profile
CA Real Estate (#2)
Posted: 10/14/2010 2:12:07 PM

The kiss of death, the third rail in this country is to be declared a racist which essentially stifled regulation

I think both George Bushes were the kind of Republican who recoiled at the idea of taking a firm position on almost any domestic issue--it might lose votes by making someone squawk. And look where all that playing "Democrat lite" has got us. John McCain as a very uninspiring presidential candidate, which allowed voters to be foolish enough to put a man who detests their country in charge of it.

A lot of Republican politicians *still* seem to have an instinct for compromising their principles. They don't have the guts, for example, to strip Lisa Murkowski of her privileged positions in the Senate, no matter what she does. She lost the Alaska Republican primary fair and square to Joe Wilson, who's a true conservative and a very strong, impressive candidate.

But her Daddy arranged the Senate seat for her years ago, and she's so addicted to power she won't concede. So she's hurting the Republicans' chance for a Senate seat by running as a write-in candidate, and although the party leaders could have stopped her--still can--they won't lift a finger. The equally unscrupulous Charlie Crist is trying something similar in Florida, although Marco Rubio, the conservative candidate, probably has too big a lead for it to stop him.

Here's hoping we'll see a lot more optimism about the future after Nov. 2, and that it helps real estate and every other part of our economy.
Joined: 3/31/2010
Msg: 82
view profile
CA Real Estate (#2)
Posted: 10/17/2010 10:42:57 AM
Your last sentences sum up the issue, who in their right mind would lend five and six figure amounts of money to total strangers without verifying a sufficient income to repay.
Joined: 3/17/2008
Msg: 83
CA Real Estate (#2)
Posted: 10/17/2010 11:12:14 AM
NSA_Bob only someone from the government, or backed by someone from the government.
Joined: 3/17/2008
Msg: 84
CA Real Estate (#2)
Posted: 10/17/2010 12:20:15 PM
Thinking it must take a willing suspension of disbelief not to understand the motives of fannie and freddie, franklin Raines and that band of Dem thieves. Iknow/knew plenty of mortgage writers, most of them are s clued in to the ultimate carnage as a the burger flipper at McD's is to cattle ranching.

Businessmen assess risk very well. They got lucky in finding a party (government) willing to assume all the risk. Everyone got what they wanted, fannie's Franklin raines got a $100M bonus his final year, Johnny lunchbox got a new house in the Inland Empire and a Harley to boot, dem politician's got to buy votes from people not actually dead or in prison (a big change for those crooks).
Joined: 3/17/2008
Msg: 85
CA Real Estate (#2)
Posted: 10/18/2010 2:58:04 PM
Unthinking you have conflated (always wanted to use that word) two separate issues, error v. policy. Somehow I'm not surprised everything runs together for you.
Joined: 10/8/2005
Msg: 86
CA Real Estate (#2)
Posted: 10/19/2010 9:55:29 AM
Many Democrats wish Bill Clinton still occupied the White House. However, before you put him in Mt. Rushmore, you might want to investigate his role in the mortgage foreclosure crisis.

The chief aim of what I have termed the Republican Counterrevolution has always been to roll back the New Deal. Anti-government rhetoric hides this as surely as states' rights hid racist segregation. Of all the New Deal legislation the GOP has sought to overturn, one that has always been at or near the top of the list is the Glass-Steagall Act. Ironically, a Democratic president repealed this for them.


An unreconstructed Southerner from Virginia, Carter Glass shepherded the creation of the Federal Reserve System through Congress, which has caused some to call him the "founding father of the Federal Reserve System." Later Glass would serve as Wilson's Treasury Secretary, recommending aid to Europe after World War I. Just before leaving Treasury to become senator, Glass warned about banks getting involved in stocks.

In his economic history of the Great Depression, John Kenneth Galbraith pointed out one of the causes was:

The large-scale corporate thimblerigging that was going on. This took a variety of forms, of which by far the most common was the organization of corporations to hold stock in yet other corporations, which in turn held stock in yet other corporations.

Galbraith would note:

During 1929 one investment house, Goldman, Sachs & Company, organized and sold nearly a billion dollars’ worth of securities in three interconnected investment trusts—Goldman Sachs Trading Corporation; Shenandoah Corporation; and Blue Ridge Corporation. All eventually depreciated virtually to nothing.

It is hard to imagine today what it felt like to walk through the door of a bank in those days and learn that the dollars you had earned had vanished. Every day spent working and saving had been for nothing. A great many farmers, brick layers, carpenters, factory workers believed the bankers had stolen their lives.

When Franklin Roosevelt took office, both the President and Congress knew the banking crisis demanded immediate action. The result was one of the crown jewels of the New Deal: the Glass-Steagall Act, officially known as the Banking Act of 1933. Glass made sure the bill forbid banks from getting into the investment business. In addition, the bill established the Federal Deposit Insurance Company, which protects our bank deposits.

In 1971, in Investment Company Institute v. Camp, no less than the United States Supreme Court would write what stands as the most cogent summary of the reasons for Glass-Steagall:

Congress was concerned that commercial banks in general and member banks of the Federal Reserve System in particular had both aggravated and been damaged by stock market decline partly because of their direct and indirect involvement in the trading and ownership of speculative securities.

The legislative history of the Glass-Steagall Act shows that Congress also had in mind and repeatedly focused on the more subtle hazards that arise when a commercial bank goes beyond the business of acting as fiduciary or managing agent and enters the investment banking business either directly or by establishing an affiliate to hold and sell particular investments.

Many arguments the Supreme Court advanced in support of Glass-Steagall, would prove prophetic three decades later.

Bill Clinton and the Wall of Me

Billionaire Sanford I. Weill, who according to Louis Uchitelle made "Citigroup into the most powerful financial institution since the House of Morgan a century ago," has what I call the Wall of Me leading to his office, which he has decorated with tributes to him, including a dozen framed magazine covers. A major trophy is the pen Bill Clinton used to sign the repeal of the Glass-Steagall Act, a move which allowed Weill to create Citigroup. Fittingly, Citigroup is a major contributor to guess which current Democratic Presidential candidate?

A Frontline report on the repeal of Glass-Steagall shows how those with money end up with pens from the President of the United States on their walls.

Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"

When Bill Clinton gave that pen to Sanford Weill, it symbolized the ending of the twentieth century Democratic Party that had created the New Deal. Although the 1999 law did not repeal all of the banking Act of 1933, retaining the FDIC, it did once again allow banks to enter the securities business, becoming what some term "whole banks."

The repeal of one of the most important pieces of legislation in this nation's history came about as a result of another Clinton "triangulation," the wobbling attempt to find the middle of the road that has somehow managed to pass for a philosophy with many Democrats for over two decades. As former Clinton former campaign Richard Morris once described it, you move a little to the left, a little to the right. I'd love to hear Clinton give that explanation to a foreclosed home owner today.

With the stroke of a pen, Bill Clinton ended an era that stretched back to William Jennings Bryan and Woodrow Wilson and reached fruition with FDR and Harry Truman. As he signed his name, in the whorls and dots of his pen strokes William Jefferson Clinton was also symbolically signing the death warrant of Liberal America and its core belief in the level playing field that had guided the Democratic Party. But it was the gift of the pen to Sanford Weill and its assuming an honored place on the Wall of Me that rubbed salt in the wound.

In his famous First Inaugural Roosevelt asserted:

Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

Clinton not only repealed the act Roosevelt had put in place to curb those practices, but presented one of the pens used to sign it to one of those "money changers."

What Hath Clinton Wrought?

What can be said in Clinton's favor is that in 1999 few people anticipated the out-of-control growth of the hedge fund industry and the subprime mortgage market. The New York Times described the new financial world created by the repeal of Glass-Steagall in a June 2007 profile of Goldman Sachs:

While Wall Street still mints money advising companies on mergers and taking them public, real money — staggering money — is made trading and investing capital through a global array of mind-bending products and strategies unimaginable a decade ago.

Curiously, Goldman Sachs head Lloyd Blankfein paints the perfect big picture of what has happened:

We’ve come full circle, because this is exactly what the Rothschilds or J. P. Morgan, the banker were doing in their heyday. What caused an aberration was the Glass Steagall Act.

Blankfein's analysis testifies to the full impact of Bill Clinton's actions, for like many members of the Counterrevolution he sees the New Deal as an aberration and longs for a return to the days J. P. Morgan and other tycoons gave the Gilded Age its nickname. His "aberration" was eliminated not because of the actions of some radical Republican, but because of Bill Clinton. No wonder Goldman Sachs is also a prime contributor to you-know-who.

As is often the case, the story of the repeal of Glass-Steagall and the growth of the subprime mortgage market that is now crumbling around us like a financial house of cards can be best be told by a graph:

If you think of this graph as the level playing field, notice how flat it was before Bill Clinton repealed Glass-Steagall, then notice how steep it has become. Those subprime loans amount to nothing more than an organized ripoff of millions of innocent Americans, with the steepness of the graph illustrating the how far the playing field has tilted.

The result is that all of a sudden people are thinking Glass-Steagall wasn't such a bad idea after all. Robert Kuttner testified before Barney Frank's Committee on Banking and Financial Services in October, evoking the dreaded specter of the Great Depression:

Since repeal of Glass Steagall in 1999, after more than a decade of de facto inroads, super-banks have been able to re-enact the same kinds of structural conflicts of interest that were endemic in the 1920s – lending to speculators, packaging and securitizing credits and then selling them off, wholesale or retail, and extracting fees at every step along the way. And, much of this paper is even more opaque to bank examiners than its counterparts were in the 1920s. Much of it isn’t paper at all, and the whole process is supercharged by computers and automated formulas.

Then there is Dow Jones MarketWatch's Kostigen:

I'm not saying that Glass-Steagall would have made a difference to the evolution of the collateralized debt obligations. But it might have helped identify and isolated the damage.

As Congress continues to investigate the mortgage crisis, more people are wondering whether the repeal of Glass-Steagall was a mistake.

The Future of Your Mortgage

In testimony before Congress on November 8, Federal Reserve Chair Ben Bernanke painted a grim picture of the current crisis and even grimmer picture of the future:

On average from now until the end of next year, nearly 450,000 subprime mortgages per quarter are scheduled to undergo their first interest rate reset. [My emphasis]

According to a December 2006 study by the Center for Responsible Lending, a nonpartisan research and policy organization:

More than 2 million people with subprime loans are facing foreclosure this year and nearly 20 percent of subprime mortgages issued between 2005 and 2006 are projected to fail.

But numbers and testimony and even history mean little to those who suddenly find themselves up against the wall. In every city and town across this country "For Sale" signs are popping up on lawns. Behind each of those signs lies a personal story, a family tragedy, which like the tragedies of the Great Depression, tells of innocent Americans felled by an affliction they never saw coming. Walk any street in this country today--even in affluent neighborhoods--and each time you see one of those signs the hairs on the back of your own neck stand up, because those signs instill the same fear people felt when they walked into a bank in 1932 and found their money gone.

Two million people have found themselves one step away from figuratively being tossed out onto the street, the way millions were in the 1930s. Meanwhile, there are young people starting new lives for whom home ownership is rapidly receding, middle-aged people who finally had scraped together enough for a down payment only to find they can't get a mortgage and older people for whom their home was their retirement and now find its value dropping like George Bush's poll numbers. Finally there are even millions more for whom the collateral damage from the crises promises to cast its shadow over their American Dream.

The International Monetary Fund recently drew the following lessons from various financial crisis:

# It is difficult to tell at the time whether a financial crisis will have broader economic consequences

# Regulators often cannot keep up with the pace of financial innovation that may trigger a crisis.

Both have characterized what happened after the repeal of Glass-Steagall. It is too bad Bill Clinton did not have their wisdom when he made his decision, but then when you make decisions by triangulating, how much weight do you give such studies?

And the current crop of politicians? Look closely at their donor lists, which I detailed in the series "Follow the Money." Then wonder why no moderator or other candidate has asked Hillary Clinton if she supports her husband's repeal of Glass-Steagall? Ask the other candidates if they support Bill Clinton's move.

Meanwhile the signs keep sprouting and the playing field keeps tilting and soon the snow will start to fall, drifting against the signs. How many more people will have lost their homes when the snow melts?
Joined: 3/17/2008
Msg: 87
CA Real Estate (#2)
Posted: 10/20/2010 11:41:43 AM
Thinking you are creating strawmen (for us) that simply do not exist. I have less than zero interest in supporting, bailing out, or providing comfort for the banking community. I simply offer that every economic recovery in the past 50 years has been lead by housing, and that conflating the investors screwed up titles and interests with the unwillingness or inability of thehome occupier to pay their mortgage is a hindrance to said economic recovery.

Have you ever considered taking your deep thinking to the HuffPo, those folks dream up strawmen that exist only in their fever swamp thinkboxes also?
Joined: 10/8/2005
Msg: 88
CA Real Estate (#2)
Posted: 10/21/2010 7:21:24 AM
GC don't be so sinister towards Thinking because what she is actually advocating and unaware of is free market economics. What she calls fighting I call competition and accountability to the investors.

The failed government interventionists will never get it right. When the feds get involved competition ceases.

I would suppose that the competition between cable and satellite TV , the cellphone companies, car insurance companies is fighting in her mind.
You would be hard pressed to find any government subsidized industry that has to compete through marketing and a better cheaper product line. (Health Care)

The sad thing about the automakers is they aren't advertising to sell they are advertising to convince people that they are still a viable product line and don't hate us because we are Government Motors.
Joined: 3/17/2008
Msg: 89
CA Real Estate (#2)
Posted: 10/21/2010 9:01:46 AM
FZR you've tricked me in to going off topic but you mentioned Gubmint Motors. Another Oblunder funded screw up of almost inconceivable incompetence. of course your faithful writer has warned for the duration this eventual headline. For brevity I will list only the pain points, the careful reader will access the IBD link themselves.

Volt Fraud At Government Motors

Government Motors' all-electric car isn't all-electric and doesn't get near the touted hundreds of miles per gallon. Like "shovel-ready" jobs, maybe there's no such thing as "plug-ready" cars either.

The Chevy Volt, hailed by the Obama administration as the electric savior of the auto industry and the planet, makes its debut in showrooms next month,

It appears we're all being taken for a ride.

we called the car an "electric Edsel, Advertised as an all-electric car that could drive 50 miles on its lithium battery, it requires a gas motor to recharge and at speeds near or above 70 mph, the Volt's gasoline engine will directly drive the front wheels

So it's not an all-electric car, but rather a pricey $41,000 hybrid that requires a taxpayer-funded $7,500 subsidy

Range? Car and Driver reported that "getting on the nearest highway and commuting with the 80-mph flow of traffic — basically the worst-case scenario — yielded 26 miles; a fairly spirited backroad loop netted 31; and a carefully modulated cruise below 60 mph pushed the figure into the upper 30s."

Perfect. I'm certain they will do better with healthcare.
Joined: 10/8/2005
Msg: 90
CA Real Estate (#2)
Posted: 10/21/2010 7:39:41 PM
Competition and anti-trust suits keep prices down.

Even though fannie and freddie went somewhat private they were still GSEs and it was the government that gave them cart Blanche to buy up sub-primes to keep the social justice on track.

Franklin Raines’ Criminal Enterprise and Barack Obama, His Accomplice **UPDATE** Top Recipients By $/Yr in Congress

by Bill Hennessy
This is an eye-opener. I’ve simply added Years in Congress and divided total Fraudie
Mae and Fraudie Mac donations by that number to rank the top 15 recipients by $ per Year. Obama is winner by a ton:

As an executive at Fannie Mae, Franklin Raines illegally coerced his employees to falsify accounting facts so he’d get a maximum bonus. The[Quote] government-backed firm used Enron-like fraud, in part at Raines’s orders, to create the largest bail-out in US history. Raines had the whistleblower fired. From the Heritage Foundation:

In 2004, after a tip from a whistle blower who was later fired, the Office of Federal Housing Enterprise Oversight (Ofheo) issued a report finding that the government-sponsored entity Fannie Mae had engaged in Enron-like accounting machinations that allowed Fannie to overstate its earnings and underestimate the risk the company faced. The accounting wizardry Fannie engaged in was designed so that Fannie could meet profit targets to maximize bonus payments to company executives like Clinton administration deputy attorney general Jamie Gorelick and Carter administration assistant director for domestic policy Franklin Raines.

From the ACU:

Following his tenure in Democrat Bill Clinton’s White House as Budget Director, Raines returned to Fannie Mae where he served as Chairman and Chief Executive Officer prior to being forced out over accounting fraud allegations that federal authorities claimed were used to pad his own pocket with tens of millions of dollars in un-earned bonuses on top of his multi-million dollar pay. Raines and other top executives drew multi-million dollar salaries at Fannie Mae for many years.

Although he claimed no wrong doing, Raines agreed to settle the suit with the federal government just this year and agreed to pay back a few million of the near $50 million it had been alleged he obtained illegally through bonuses not due from Fannie Mae.

Now, this criminal is Barack Obama’s campaign adviser. Only one member of Congress, Barney Frank, Chris Dodd, received more kickbacks from Raines’s Fannie Mae cronies than did Barack Obama–over $120,000 in bribes.

Campaign Contributions, 1989-2008 (source)
Name Office State Party Grand Total Total from
PACs Total from
Dodd, Christopher J S CT D $165,400 $48,500 $116,900
Obama, Barack S IL D $126,349 $6,000 $120,349

Dodd has been in Congress since Moses was a baby. What did Obama do in 2.5 years to earn nearly as much cash from Frannie and Freddie as Dodd earned in 25?

Remember Countrywide? According to BusinessWeek Obama’s financial adviser, Raines, was responsible for its demise, too:

The Countrywide project deemed, “friends of Angelo” or FoA, standing for Friends of Countrywide Chief Executive Angelo Mozilo, apparently provided special loan rates for connected officials. These included Raines, James Johnson (a Democratic party activist and adviser to Sen. Barack Obama who was named to a panel to help choose Obama’s Vice Presidential running mate), Democrat Chairman of the Senate Banking Committee, Senator Christopher Dodd, and the chairman of the Senate Budget Committee, Democrat Kent Conrad.

Fannie Mae and Freddie Mac control almost 50 percent of all mortgages in the United States. They were started by Democrats, protected by Democrat, funded by Democrats, and absorbed into the government proper at the behest of their paid hacks in the Democrat party. Conservatives have advocated the demolition of these twin towers of corruption, fraud, and bribery for decades. But Democrats blocked every attempt to even hold hearings on corruption in Fannie Mae and Freddie Mac,citing racial fairness.

But where are the Congressional hearings? Where is the Department of Justice? Why aren’t Raines, Johnson, and Obama doing a perp walk on the evening news?

Because liberals OWN Washington. Obama will threaten, lie, and kill if he must to keep his sham campaign going. At this point, he must win to stay out of prison.

I cannot believe that conservative bloggers and talk show hosts are staying away from this story. This should be the end of Barack Obama, particularly after today’s disaster on Wall Street: Dow down >500, Lehman Brothers GONE, Bear Stearns GONE, Merrill Lynch GONE, Fannie Mae GONE, Freddie Mac GONE, AIG GOING, more to follow.

Lehman Brothers, too, contributed the lion’s share of its political donations to DEMOCRATS. Why don’t you people rise up and demand some goddamn ACCOUNTABILITY! This isn’t some little $10 million Chrysler bailout here. We’re talking BILLIONS of STOLEN MONEY. Stolen by Democrats, for Democrats.

We could face an economic DEPRESSION because of Obama, Dodd, Biden, Frank, Pelosi, Kennedy, and the rest of the Democrat criminals who’ve destroyed the housing market, put families on the streets, and wrecked Wall Street through greed and avarice on a scale unseen since the Roman Empire!

Fannie also bought off activist groups such as the corrupt Association of Community Organizations for Reform Now (ACORN), which has been indicted, multiple times across the country, for vote fraud (Obama worked closely with ACORN as a street organizer in Chicago). Fannie’s lobbying efforts paid off as liberal politicians such as Sen. Chuck Schumer (D-N.Y.) and Rep. William Clay (D-Mo.) worked to kill any real reform of Freddie and Fannie. The Washington Post reports: “In an internal memo in 2004, Fannie Mae executive Daniel H. Mudd affirmed what the company’s critics had long contended: In the political arena, ‘we always won’ and ‘we took no prisoners.’”


I’ll say it again without any fear of error: Franklin Raines is a criminal and Barack Obama is his paid accomplice. Prove me wrong.

*UPDATE 1/4/2009: Michelle Malkin has a wonderful post on original reporting by conservative bloggers. While this piece might not be original, the analysis certainly is. This is, as far as I can tell, the only graphical analysis showing that Barack Obama received more money from Frannie Mae and Freddie Mac crooks than any other politician when measured in dollars per day in office.

So Thinking what is your response to this.
Joined: 3/17/2008
Msg: 91
CA Real Estate (#2)
Posted: 10/22/2010 7:24:03 AM
Thinking why would you have difficulty in imagining a government involved in the business of business, and feeling in some way it should create prosperity, would not latch on to real estate, housing specifically? And of course the friends of Angelo, all Dem financial system players is simply established fact. Now I personally, among the hierarchy of sin, do not get agitated over a congressman getting favorable interest rates. Guys like Frank and Dodd willing to convince Euro banks to buy repackaged mortgages with the full faith and credit of the US government... well a few points on interest would have been a welcome free lunch to a party of free lunchers.

back to the point. If one has strong housing, one has an engine. In the list of levers on the economy, trickly up or down if you will, probably nothing works like housing. Virtually every industry benefits, materials, transportation, consumer goods, these newly minted homeowners fill their houses with big screen TV's, zero degree appliances, harleys, art and egyptian cotton sheets.

Sounds like a great plan until the economy hits a jelly bean in the road...then the wheels fall off.

What Obama has tried to do with all forms of RE incentives, cash for clunkers, cash for caulking, etc. are all variations on the same thing.
Joined: 1/31/2009
Msg: 92
view profile
CA Real Estate (#2)
Posted: 10/22/2010 8:18:49 AM
Here's a good article by Thomas Sowell on the major role the esteemed Rep. Barney Frank (D-Mass.) played in creating the economic mess we're in. As a racist, I normally wouldn't cite a black academic. But I think the fact Prof. Sowell is an expert on Marxist economics (among many other things) gives him an especially good understanding of the leftists in this government.
Joined: 3/17/2008
Msg: 93
CA Real Estate (#2)
Posted: 10/22/2010 3:57:45 PM
Government doesn't benefit from prosperity? New property tax rolls? Building infrastructure/ tax revenue from sales of all the aforementioned products?

Take a look at the Temecula valley. Not that long ago it was a sleepy farming area. Then someone said build Diamond Valley (Lake). Then 10,000's of thousands of houses went up. Then business sprung from the ground. Then casinos. Traffic jams to LA every morning, widening of the Ortega hwy.

All was boom boom boom. Then one day someone lost their job.... and the unraveling began. Soon armies of investment types from NYC were given helicoptor fly overs of the entire length of the valley with stats on entire communities that could be purchased from the air, for pennies on the dollar. They didn't buy. I know. I was on a few rides.

I can see a lot of areas where one could disagree with a conservative. I think I've wasted both of our times talking to someone who believes government doesn't benefit from housing based prosperity.
Joined: 10/8/2005
Msg: 94
CA Real Estate (#2)
Posted: 10/25/2010 7:35:53 AM
Sadly, the state of California is facing such a wide array of social, economic, and political problems that it is hard to even document them all. It is really one huge gigantic mess at this point.

60 Minutes Shock Report: Real Unemployment Rate 17.5%; California 22%

Just consider the following facts about what life is like in the state of California today….

#1 Unemployment in the state of California was 12.4% in September – one of the highest rates in the nation.

#2 The number of people unemployed in the state of California is approximately equivalent to the populations of Nevada, New Hampshire and Vermont combined.

#3 Not even state government jobs are safe in California these days. Last month, government agencies in California slashed a total of 37,300 jobs.

#4 California has the third highest state income tax in the nation: a 9.55% tax bracket at $47,055 and a 10.55% bracket at $1,000,000.

#5 California has the highest state sales tax rate in the nation by far at 8.25%. Indiana has the next highest at 7%.

#6 Residents of California pay the highest gasoline taxes (over 67 cents per gallon) in the United States.

#7 Even with all of the taxes, the budget deficit for the California state government for the current year is approximately 19 billion dollars.

#8 According to an article in the Wall Street Journal, California’s unfunded pension liability is estimated to be somewhere between $120 billion and $500 billion.

#9 20 percent of the residents of Los Angeles County are now receiving public aid.

#10 Budget cuts are making life very difficult in many California cities. For example, Oakland, California Police Chief Anthony Batts says that due to severe budget cuts there are a number of crimes that his department will simply not be able to respond to any longer. The crimes that the Oakland police will no longer be responding to include grand theft, burglary, car wrecks, identity theft and vandalism.

Things have gotten so bad in Stockton, California that the police union put up a billboard with the following message: “Welcome to the 2nd most dangerous city in California. Stop laying off cops.”

#11 According to one survey, approximately 1 in 4 Californians under the age of 65 had absolutely no health insurance last year.

#12 California’s poverty rate soared to 15.3 percent in 2009, which was the highest in 11 years.

#13 California’s overstretched health care system is also on the verge of collapse. Dozens of California hospitals and emergency rooms have shut down over the last decade because they could not afford to stay open after being endlessly swamped by illegal immigrants and poor Californians who were simply not able to pay for the services they were receiving. As a result, the remainder of the health care system in the state of California is now beyond overloaded. This had led to brutally long waits, diverted ambulances and even unnecessary patient deaths.

#14 California home builders began construction on 1,811 homes during the month of August, which was down 77% from August 2006.

#15 Earlier this year, it was reported that in the area around Sacramento, California there was one closed business for every six that were still open.

#16 The “lawsuit climate” in California is ranked number 46 out of all 50 states.

#17 Residents of California pay some of the highest electricity prices in the entire nation.

#18 Over 20 percent of California homeowners are now underwater on their mortgages.

#19 Large tent cities have been springing up all over the state of California. Just check out the following shocking video news report….
Joined: 1/31/2009
Msg: 95
view profile
CA Real Estate (#2)
Posted: 10/25/2010 8:37:52 AM
^^^^Thanks to all the leftist jerks who've ruined my state. I know most of them aren't very bright, but that doesn't make them any less guilty.

All the artificially inflated wages paid to all those public employees are just overhead--they don't produce anything valuable. But one second-rate leftist politician after another has pimped for their votes. The crook who now passes for mayor of Los Angeles and his cronies in Sacramento have no shame at all about it. And Jerry Brown did as much as anyone to get the ball rolling.

All those millions of illegal immigrants are an enormous load on public services of all kinds--police, fire, sewers, roads, parks, utilities, transport, welfare, hospitals, schools, etc. And many of them are not the honest, hardworking folks they're made out to be. About 30% of the inmates in federal prisons are illegal aliens. Quite a few of them have murdered policemen here. On any given day, several thousand are serving time for misdemeanors at a state prison in Lancaster, before they are deported.

One academic study estimated it costs us about $25,000 a year, net, for each one of the several million illegal aliens who live in California. It costs about $11,000 a year just to educate each of their children (which we have to do because of a wrongly decided 1967 Supreme Court decision which Congress ought to fix right away.) And they don't pay most of it. That means a total drain of tens of billions of dollars a year. L.A. public schools used to be very well regarded, but look at them now. And a poorly educated local work force is part of what drives businesses away.

The country's strictest environmental regulations also haven't helped the economic climate. Of course it makes sense for this and other states which depend a lot on tourism--e.g., Hawaii, Arizona, Vermont-- to stay attractive. State laws used to serve the purpose just fine, and they still could. But like other states, California is forced to administer and enforce an entire system of federal environmental laws duplicating its own laws. If it doesn't perform to EPA's satisfaction, it can have federal funds for our highways, etc. cut off.

California has such redundant, oppressive, expensive environmental laws that they cost far more than they've ever delivered. It's very hard to build anything here, and the costs of regulation and delay are often passed on to home buyers. Small businesses create most of our jobs. But we force them to pay several thousand dollars a year per employee just to comply with government regulations, and then moan about where all the jobs have gone.
Joined: 10/8/2005
Msg: 96
CA Real Estate (#2)
Posted: 10/25/2010 9:20:36 AM
Here is the future of the Obamanation and the future of your housing in California.!
Joined: 9/24/2010
Msg: 97
view profile
CA Real Estate (#2)
Posted: 11/11/2010 6:01:36 AM
As a property inspector I'm amazed at where prices haven't falling much like certain pockets of orange county. It appears that most of the buyers are foreign and have a healthy supply of cash to play with. This upturn for RE prices, while in appearance looks promising will be short lived because it is not sustainable.

You have the wholesale, retail, and discount markets which are all reported and tracked differently. There's still a wave loaded with millions of foreclosures coming. Not to mention the long winded short sale process, and the clean up of REO's which aren't moving fast enough.

Any growth happening in this market right now feels like manipulation. Perhaps this is part of the soft landing the feds have been working on. Anyways sales have been pretty descent this last quarter because I've been very busy performing home inspections and I hope that is a trend that continues no matter where the real estate market goes.

The Septemberman
Joined: 7/9/2006
Msg: 98
CA Real Estate (#2)
Posted: 12/1/2010 9:56:48 PM
Now that there are just enough Repubs in Congress to cause gridlock I am starting to wonder....

Are we going to see any more programs designed to prop up RE prices or are these programs going to get stuck?

If so then it will be interesting to see what the RE market does if forced to stand on it's own two feet.
Joined: 7/9/2006
Msg: 99
CA Real Estate (#2)
Posted: 12/1/2010 9:57:36 PM
Ok maybe I'm just dreaming...but what the hell.
Joined: 3/17/2008
Msg: 100
CA Real Estate (#2)
Posted: 12/1/2010 10:08:07 PM
Case-Shiller (Dr. Shiller specifically) is reporting sales and prices down in 18 of 20 major markets. He was very pessimistic and stated more price reductions to come which he felt would be for the economy as a whole just as it was showing signs of life. I've never seen him so concerned.
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