Clinton Administration Caused Housing Crash and Bank Crisis

From Investors.com:

Subprime Scandal: Newly released memos from the Clinton presidential library reveal evidence the government had a big hand in the housing crisis. The worst actors were in the White House, not on Wall Street. 

During the 1990s, former Clinton aides bragged that more aggressive enforcement of the Community Reinvestment Act pressured banks to issue riskier mortgages, lending more proof the anti-redlining law fueled the crisis. 

A 2012 National Bureau of Economic Research study found "that adherence to that act led to riskier lending by banks," with "a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam, (and) the effects are larger for loans made within CRA tracts," or low-income and minority areas. 

To satisfy CRA examiners, Clinton mandated "flexible" lending by large banks. As a result, CRA-approved loans defaulted about 15% more often, the NBER found. 

Exhibit A in the 7,000-page Clinton Library document dump is a 1999 memo to him from his treasury secretary, Robert Rubin. 

"Public disclosure of CRA ratings, together with the changes made by the regulators under your leadership, have significantly contributed to ... financial institutions ... meeting the needs of low- and moderate-income communities and minorities," Rubin gushed. "Since 1993, the number of home mortgage loans to African Americans increased by 58%, to Hispanics by 62% and to low- and moderate-income borrowers by 38%, well above the overall market increase. 

"Since 1992, nonprofit community organizations estimate that the private sector has pledged over $1 trillion in loans and investment under CRA." 

Other documents reveal how the community-activist group ACORN and other organizations met with Rubin and other top Clinton aides on "improving credit availability for minorities." 

Clinton's changes to the CRA let ACORN use the act's ratings to "target merging firms with less-than-stellar records and to get the banks to agree to greater community investment as a condition of regulatory approval for the merger," White House aide Ellen Seidman wrote in 1997 to Clinton chief economist Gene Sperling. 

"Community groups have come to recognize how terribly powerful CRA has been as a tool for making credit available in previously underserved communities," Seidman added. 

Seidman later boasted that Clinton's 1995 CRA revisions created not only the subprime mortgage market but also the subprime securities market. Of course, subprime loans and their high default rates ruined minority neighborhoods when the market crashed. 

Memos also reveal how Clinton aides held repeal of the Glass-Steagall Act hostage to strengthening the CRA. They gave Republicans deregulation of banking activities in exchange for over-regulating how those banking activities applied to low-income communities. 

Clinton aides viewed ending the Glass-Steagall Act as a way to "extend the CRA to Wall Street firms" and wanted to extend it to insurers, mutual funds and mortgage bankers. But due to GOP opposition, that was "not politically feasible," Rubin told Clinton in a 1997 memo. 

In 2000, HUD Secretary Andrew Cuomo lit the fuse on the subprime bomb by requiring Fannie Mae and Freddie Mac to purchase subprime, CRA and other risky mortgages totaling half their portfolios. 

A 1993 memo, "Racism in Home Lending," captured the tone of Clinton's affordable-housing crusade. It proposed coordinating with the Washington Post and Congressional Black Caucus on bank investigations. 

These White House papers are smoking-gun evidence of Clinton's culpability in creating the subprime bubble. The mainstream media's silence is deafening.

###

Naturally, because the "fit hit the shan" during the final months of George W. Bush's administration, Democrats try to blame him for the crisis. It was the Bush Administration that first sounded the alarm that fell on deaf ears and led Christopher Dodd, Barney Frank and Maxine Waters (among others) to claim everything's alright and charge the whistle-blowers of racism. [See this.]

5th Anniversary: Democrats Caused Wall Street Debacle

Since the media is commemorating the fifth anniversary of the start of the financial crisis, this is a re-post on why it all happened and why we still haven't recovered.

This was originally posted in October 2008. Just a stroll Down Memory Lane for those yo-yos who blame George W. Bush:


The Democrats are up to their eyeballs with responsibility for the current crisis on Wall Street over Fannie Mae and Freddie Mac. Barack Obama was the no. 2 recipient of campaign donations from Fannie Mae (Sen. Christopher Dodd was no. 1).

Two former CEOs of Fannie Mae are now on Obama's staff as economic advisors: Franklin Raines and Jim Johnson. Those two raked in millions of dollars for themselves.

Another noted Democrat was involved (from Michael Reagan's article, link below):

Jamie Gorelick, an official in Clinton’s Justice Department — the woman who built the “wall” that prevented the FBI from targeting terrorists before 9/11 — worked for Fannie Mae and took home $26 million.

Gorelick should be familiar to us from the 9/11 Commission Report as she was the one responsible for keeping the CIA from sharing terrorist data with the FBI before 9/11 thanks to her wall.

The Wall Street Journal has a compendium of articles warning of the debacle and the involvement of Democrats: Wall Street Journal Compendium

The Obama campaign is currently trying to blame Republicans for this crisis, but that won't fly as the real facts are now coming out. In fact, McCain warned of a possible crisis (source: Michael Reagan):

Obama brazenly blames John McCain and the GOP for the current Wall Street mess when it’s clear none of it was due to Republican policies. The truth of the matter is that it was McCain and three GOP colleagues who sought to reform the government’s lending policies three long years ago after the Bush administration had failed two years earlier. On May 25, 2006, McCain spoke on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005, and warned against the debacle we are now facing if it failed to pass.

He told the Senate that a report by the Office of Federal Housing Enterprise Oversight charged that “Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives.”

McCain warned, “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.”

McCain predicted the entire collapse we now are suffering through. He stressed the falsification of financial records to benefit executives, including Obama advisers Franklin Raines and Jim Johnson.

Jonah Goldberg at National Review Online writes:

The current financial crisis stems in large part from the fact that people who shouldn’t have been buying a home, or who bought more home than they could afford, now can’t pay their bills. Their bad mortgages are mixed up with the good mortgages. And thanks in part to new accounting rules set up after Enron, the bad mortgages have contaminated the whole pile, reducing the value of even stable mortgages.

Of course, there are other important factors at work here, having to do with changing technology among other things. And even if the bad mortgages weren’t in the system, we’d still have the hangover from the end of the housing boom. But the financial system could have handled that with the usual corrections. The biggest dose of poison entered the financial bloodstream through Washington. And some people warned us. In 2005, Fannie Mae revealed it overstated earnings by $10.6 billion and that it didn’t really know what was going on. The Bush administration pushed for reforms, but those efforts were rebuffed by Congress, with Democrats Barney Frank and Christopher Dodd taking point, because Fannie and Freddie have spent millions in campaign contributions.

In 2005, McCain sponsored legislation to thwart what he later called “the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”

Obama, the Senate’s second-greatest recipient of donations from Fannie and Freddie after Dodd, did nothing.

Meanwhile, Raines, the head of a government-supported institution, made $52 million of his $90 million compensation package thanks in part to fraudulent earnings statements.

Hopefully, people will remember this when they go to the polls in November.

To see Michael Reagan's full article:
Michael Reagan: Democrats Own Wall Street Debacle

To see Jonah Goldberg's full article: Wall Street Fat Cats Aren't At Fault This Time

***********************************************************************
Since the above was posted, a YouTube video surfaced showing Barney Frank and Maxine Waters attacking "whistleblowers" who were sounding the warning over Fannie and Freddie with Waters injecting the "race card." Just do a search at YouTube for Barney Frank and Maxine Waters along with Fannie and Freddie and you'll find it.

The Blame Bush B.S.

Talk show host Rush Limbaugh mentioned some exit polling taken during the election that show people still blaming President George W. Bush for this economy, despite the fact the President Obama has been in office for nearly four years and whose policies made economic matters worse.

Limbaugh correctly pointed out that for most of Bush's tenure, the economy was robust with 4% unemployment on average, which is considered full employment by economists.

It was only during the end of 2007 and the beginning of 2008 when things went sour due to the mortgage meltdown caused by the sub-prime loan policies of lenders, led by Freddie Mac and Fanny Mae.  Bush had nothing to do with those and his administration sounded a warning of potential trouble as far back as 2002.

I sent the following email to Limbaugh today:

One problem I've noticed during the campaign is that Romney and none of the other GOP candidates offered any kind of rebuttal to Obama's/Democrats' charges of "Bush's policies got us into this mess." Romney just sat and said nothing during a debate when Obama stated this. 

We know it was the Democrats' policies of extending mortgage loans to people who had no business in taking them out and who had no means of repaying them back.

The Bush Administration sounded the alarm as far back as 2002 on problems with this, but they were met with charges or racism by Maxine Waters, et al.

This will keep on as long as the GOP doesn't "go for the throat" in rebutting their charges. They keep allowing the "blame Bush" stuff to stand.

Repost: Democrats Caused Wall Street Debacle

This was originally posted in October 2008. Just a stroll Down Memory Lane for some trolls:


The Democrats are up to their eyeballs with responsiblity for the current crisis on Wall Street over Fannie Mae and Freddie Mac. Barack Obama was the no. 2 recipient of campaign donations from Fannie Mae (Sen. Christopher Dodd was no. 1).

Two former CEOs of Fannie Mae are now on Obama's staff as economic advisors: Franklin Raines and Jim Johnson. Those two raked in millions of dollars for themselves.

Another noted Democrat was involved (from Michael Reagan's article, link below):

Jamie Gorelick, an official in Clinton’s Justice Department — the woman who built the “wall” that prevented the FBI from targeting terrorists before 9/11 — worked for Fannie Mae and took home $26 million.

Gorelick should be familiar to us from the 9/11 Commission Report as she was the one responsible for keeping the CIA from sharing terrorist data with the FBI before 9/11 thanks to her wall.

The Wall Street Journal has a compendium of articles warning of the debacle and the involvement of Democrats: Wall Street Journal Compendium

The Obama campaign is currently trying to blame Republicans for this crisis, but that won't fly as the real facts are now coming out. In fact, McCain warned of a possible crisis (source: Michael Reagan):

Obama brazenly blames John McCain and the GOP for the current Wall Street mess when it’s clear none of it was due to Republican policies. The truth of the matter is that it was McCain and three GOP colleagues who sought to reform the government’s lending policies three long years ago after the Bush administration had failed two years earlier. On May 25, 2006, McCain spoke on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005, and warned against the debacle we are now facing if it failed to pass.

He told the Senate that a report by the Office of Federal Housing Enterprise Oversight charged that “Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives.”

McCain warned, “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.”

McCain predicted the entire collapse we now are suffering through. He stressed the falsification of financial records to benefit executives, including Obama advisers Franklin Raines and Jim Johnson.

Jonah Goldberg at National Review Online writes:

The current financial crisis stems in large part from the fact that people who shouldn’t have been buying a home, or who bought more home than they could afford, now can’t pay their bills. Their bad mortgages are mixed up with the good mortgages. And thanks in part to new accounting rules set up after Enron, the bad mortgages have contaminated the whole pile, reducing the value of even stable mortgages.

Of course, there are other important factors at work here, having to do with changing technology among other things. And even if the bad mortgages weren’t in the system, we’d still have the hangover from the end of the housing boom. But the financial system could have handled that with the usual corrections. The biggest dose of poison entered the financial bloodstream through Washington. And some people warned us. In 2005, Fannie Mae revealed it overstated earnings by $10.6 billion and that it didn’t really know what was going on. The Bush administration pushed for reforms, but those efforts were rebuffed by Congress, with Democrats Barney Frank and Christopher Dodd taking point, because Fannie and Freddie have spent millions in campaign contributions.

In 2005, McCain sponsored legislation to thwart what he later called “the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”

Obama, the Senate’s second-greatest recipient of donations from Fannie and Freddie after Dodd, did nothing.

Meanwhile, Raines, the head of a government-supported institution, made $52 million of his $90 million compensation package thanks in part to fraudulent earnings statements.

Hopefully, people will remember this when they go to the polls in November.

To see Michael Reagan's full article:
Michael Reagan: Democrats Own Wall Street Debacle

To see Jonah Goldberg's full article: Wall Street Fat Cats Aren't At Fault This Time

***********************************************************************
Since the above was posted, a YouTube video surfaced showing Barney Frank and Maxine Waters attacking "whistleblowers" who were sounding the warning over Fannie and Freddie with Waters injecting the "race card." Just do a search at YouTube for Barney Frank and Maxine Waters along with Fannie and Freddie and you'll find it.

Good riddance, Barney Frank!

Good riddance, Barney Frank!

The Massachusetts Democrat and an architect of the housing crisis announced that he's not going to seek re-election in 2012.

For more, go here.

Obama: What A Liar

President Barack Obama is either living in a fantasy world or is the biggest liar to have ever resided in the White House.

In a speech this morning at the Brookings Institute, Obama said that he is "restoring fiscal responsibility" and that the deficits were caused during the past eight years.

Excuse me, but Obama has spent more in his one year in office than President Bush did during his entire eight years. Also, the deficits were built up over years from both Democrat and Republican administrations and Obama voted for most of the spending during Bush's years when he was in the senate.

While trying to blame Bush and the GOP for the economy, he omits the fact that it was the policy of the Democrats, starting with Jimmy Carter, to extend sub-prime loans to people who had no business taking out loans. This was led by Barney Frank and Christopher Dodd through Fannie Mae and Freddy Mac.

He also claims the "expansion" of the economy is the largest in three decades. What expansion? Incredible!

Again, Obama is habitually blaming his problems on the prior administration. This is both childish and unbecoming for a president to act.

Unemployment Hits 9.7%

The Labor Department reports that unemployment has reached 9.7%.

According to Reuters:

U.S. employers cut a fewer-than-expected 216,000 jobs in August, while the unemployment rate rose to a 26-year high, the government said on Friday in a report showing a still fragile labor market.

The Labor Department said the unemployment rate rose to 9.7 percent after dipping to 9.4 percent in July and the decline in payrolls was the smallest in a year. The department revised job losses for June and July to show 49,000 more jobs lost than previously reported.

The Obama Administration said that if the stimulous package was passed (and rushed into passage, need I remind you), unemployment would be held at 8%. Well, it didn't happen.

Reuters also reports:

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs, the department said. Stubbornly high unemployment is wearing on consumer confidence and crimping domestic demand, pointing to an anemic recovery from the worst slump in 70 years. Consumer spending accounts for over two-thirds of U.S. economic activity.

I was laid off in November 2007, which was directly attributed to the mortgage meltdown (thanks to the Barney Frank, Christopher Dodd, Maxine Waters and others for the problems with Fannie Mae and Freddie Mac), so the December 2007 date is on the mark as far as I am concerned. Thankfully now, I have two jobs, although combined they don't pay as well as my lost job.

Will unemployment hit 10% during this month? We'll see.

To read the full article, go here.

Obama Still Finger-Pointing

President Obama is still trying to blame his predecessor for his problems. Instead of leadership, we get whining and finger-pointing.

Joseph Curl at the Washington Times noted:

Facing the first real rough patch of his presidency, President Obama and his supporters are once again resorting to a tried-and-true tactic: attacking George W. Bush and Dick Cheney.

In his White House press conference last week, Mr. Obama referred to the Bush era at least nine times, three times lamenting that he "inherited" a $1.3 trillion debt that has set back his administration's efforts to fix the economy.

With the former president lying low in Dallas, largely focused on crafting his memoirs, Mr. Obama has increasingly attempted to exploit Mr. Bush when discussing the weak economy, the wars in Iraq and Afghanistan and the difficulty closing the military prison at U.S. Naval Base Guantanamo Bay, Cuba.

As he took power, Mr. Obama promised a "new era of responsibility" that would transcend partisan politics.

Obama did not "inherit" the $1.3 trillion debt. He created it. The debt never hit the trillion mark until this month.

The economic problems we currently have were caused by his own party in extending sub-prime loans to people who had no business getting them in the first place. He should point the finger at Barney Frank, Chris Dodd, Maxine Waters and others who caused this mess.

Curl also points out:

Since taking office, Mr. Obama has implemented a $787 billion stimulus package that has failed to produce a quick economic turnaround and the U.S. economy has shed more than 2.5 million jobs.

This isn't Bush's fault. Obama should take responsibility for his and his party's own actions instead of finger-pointing. It is immature and is not leadership.

Warren Buffett and the "Banking Queen"

Billionaire Warren Buffett told CNBC in an interview that he sees no signs of a recovery in the economy:

BUFFETT: Well, it's been pretty flat. I get figures on 70-odd businesses, a lot of them daily. Everything that I see about the economy is that we've had no bounce. The financial system was really where the crisis was last September and October, and that's been surmounted and that's enormously important.

Buffett also criticized Obama's cap-and-trade energy tax scheme as a "huge, regressive tax."

He is basically saying that the stimulous/porkulous bills failed (i.e., Obama failed). All they accomplished was to saddle the country with four times the national debt we had previously.

Speaking of the economy, one of the architects of the current meltdown, Congressman Barney Frank is at it again (it seems the "Banking Queen" hasn't learned his lesson):

Two U.S. Democratic lawmakers (Representatives Barney Frank, the chairman of the House Financial Services Committee, and Anthony Weiner) want Fannie Mae and Freddie Mac to relax recently tightened standards for mortgages on new condominiums, saying they could threaten the viability of some developments and slow the housing-market recovery.

Source: Reuters.

I'll go out on a limb and make a prediction: the economy will get worse and this, along with the Democrats' tax and spending schemes will cause them to lose both majorities in congress and will threaten the very existence of the Democrat Party.

Bush Not To Blame For Mortgage Crisis

Above, Rep. Maxine Waters, one of the real culpits of the mortgage crisis.

There are some idiots (mainly Democrats) who try to lay the blame over the current financial crisis on the lap of George W. Bush. (It bears repeating on who the real culprits are as some don't seem to be getting the message.)

The blame on Bush won't wash as it was Republicans who sounded the warning alarms that Fannie Mae and Freddie Mac were headed into dangerous waters.

Fannie Mae and Freddie Mac, and others (including Christopher Dodd's favorite, Countrywide), engaged in subprime mortgage lending so that opportunites for home-ownership low-income people would be created. The mandates that were implemented trace their origins to Jimmy Carter's Community Reinvestment Act of 1977 and Bill Clinton's ordering of the Department of Housing and Urban Development to enforce the CRA regulations. Banks were pushed to modify their lending qualifications and were underwriting loans to a whole range of unqualified buyers by 2006.

Republicans, including Sen. John McCain, raised concerns that government tinkering in the housing market could lead to problems.

Democratic Rep. Barney Frank led the charge in defending Fannie and Freddie: "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. And even if there were a problem, the federal government does not bail them out."

Rep. Maxine Waters, D-Los Angeles, backed Frank and said, "We do not have a crisis at Freddie Mac and particularly Fannie Mae under the outstanding leadership of Frank Raines." She also accused those raising concerns as being "racist" as Raines is black. Raines later directed millions of campaign contributions to Barack Obama's presidential campaign. There's an interesting video on YouTube with Frank and Waters attacking the whistle-blowers.

As Thomas Sowell wrote:

"Those who warned of the dangers had their warnings dismissed." One of those whose warnings were dismissed was our much-reviled, much-blamed, former president, George W. Bush. Bush warned of the problems brewing at Fannie Mae and Freddie Mac at least twice - first in his 2001 budget, and then again in 2003, when he warned that a meltdown by Fannie and/or Freddie could cause "systemic" problems in our financial system.

Who was it that dismissed those warnings? Democrats, including Maxine Waters, Barnie Frank and Chris Dodd, who demonized those giving the warnings as being against low-income housing, and worse!

Dodd In Political Trouble

Senator Christopher Dodd, D-Conn., is facing a rebellion in his home state, according to a new Time magazine article.

The Connecticut voters' unhappiness with Dodd ranges from his role in the mortgage meltdown to his sweetheart deal with mortgage lender Countrywide.

The Time article reads in part:

Much of Dodd's current woes stem from a pair of mortgages that he must wish he had never gotten. His reputation still has not recovered from the revelation last year that he received a sweetheart deal on his mortgage, saving upwards of $75,000 courtesy of Countrywide, one of the biggest pushers of the subprime mortgages that have landed the U.S. economy in such dire straits. Connecticut officials say there is no evidence of wrongdoing, and Dodd, who has allowed reporters limited access to his mortgage documents, denies he got any preferential treatment and insists he is going to refinance with a different bank. "I made the mistake of not addressing it earlier," Dodd concedes in an interview. Still he will not allow reporters to further examine the "hundreds of pages" of mortgage documents, saying, "no one has ever showed as much as we have." But the scandal has left a bad taste with Connecticut voters; in a January Quinnipiac poll, 56% of them said the Countrywide connection made them less likely to vote for Dodd.

The voters' ire was also raised when Dodd moved his family to Iowa during his short-lived presidential campaign in 2007.

Time goes on to say that Dodd's worries over his re-election and health care reform has distracted him or stretched him too thin:

Still, the double distraction of a looming tough reelection battle and the ongoing health-care talks has some worried that Dodd might be neglecting the Banking Committee at a crucial time, or at least be stretched too thin. "Health care is yet another distraction on the list of things that have distracted Dodd from his [Banking] Committee work," says one Republican senator who has served with Dodd on the committee. "Legislation to regulate the insurance industry and to crack down on Fannie Mae and Freddie Mac languished before the committee while he was on the campaign trail. Then Countrywide distracted him from the housing bill, a bill that had to be overhauled by the Obama Administration this week," the senator said, referring to the Obama Administration's changes to the housing program created by Dodd's bill last summer. The changes, which did not require congressional approval, were badly needed to loosen up the $300 billion fund that had been choked by conditions Congress had placed on the money. "We created a bill that did a lot of good things but made it cumbersome to deal with foreclosures," Dodd concedes, adding that his committee held 82 hearings "on the foreclosure issue" in the 110th Congress.

To add to Dodd's woes, a botched book deal announcement was met with ridicule.

Crown Publishers announced that Dodd would be the author of "Thirteen Days: How the Financial Crisis Changed the Politics of Washington" last month. Republicans attacked the announcement. "You have to wonder who advised Senator Dodd that striking a book deal on a crisis that he was at least partially responsible for was a good idea," said Brian Walsh, a National Republican Senatorial Committee spokesman. "A more apt title would be '13 Weeks: The Senate Banking Committee Chairman's Time in Iowa While the Housing Market Collapsed.'" The publisher has backed away saying that a book deal hasn't been finalized. Right.

It is good that Connecticut voters are unhappy with Dodd. Whether there's enough of them to defeat him next year is another question. But his role in the mortgage crisis continues to dog him and that can only be helpful to the Republicans. Dodd was one of several Democrat senators who protected Fannie and Freddie, including Barack Obama and Hillary Clinton, who have received mind-boggling levels of financial support from them over the years. Dodd, the Senate Banking Committee chairman, received more than $165,000 in contributions from Freddie and Fannie's PACs. When the crisis was jelling, Dodd said Freddie and Fannie were "fundamentally strong". He also said they were in a "sound situation" and "in good shape" and to "suggest they are in major trouble is not accurate". We know differently now, don't we? He should be in jail, instead of writing banking legislation.

To read the full article, go here.

Deception Is The Core of Obama Plans

Charles Krauthammer nails President Obama again in his article, "Deception At Core of Obama Plans."

In it, Krauthammer notes:

The "day of reckoning" has now arrived. And because "it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament," Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.

Amazing. As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

Maybe it's because he has no plan. He is either clueless or the biggest liar in Presidential history!

Krauthammer knows what's going on:

What's going on? "You never want a serious crisis to go to waste," said Chief of Staff Rahm Emanuel. "This crisis provides the opportunity for us to do things that you could not do before."

Things. Now we know what they are. The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions -- the sense of crisis bordering on fear-itself panic -- for enacting his "Big Bang" agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core. Health, education and energy -- worthy and weighty as they may be -- are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime.

Right-o. Obama is an idealogue steeped in socialism and Marxism. Many of us had him pegged months ago, but the drones who voted for him have yet to wake up. When they do, it just may be too late for this country.

At least Rahm Emanuel is honest in his comments. They are taking advantage of this bad economy and are using it to further their socialist aims. That's why they are using scare tactics to panic people into demanding fast action, not realizing that they are being deceived and the "fast action" is leading this country into socialism.

As Rush Limbaugh has been asking the Obama drones, Did you really vote for this?

To read Krauthammer's full article, go here.

Obama Causing Market Crash

Source: MoneyNews.com

You can't blame the current economic conditions on George W. Bush anymore (as if you could anyway, since it really was caused by Democrat mortgage policies). The Bush Administration sounded the alarm about potential problems with Fannie Mae and Freddy Mac in 2001 and tried to get a regulator for those mortgage giants in 2003. But the Democrats, led by Barney Frank and Christopher Dodd, fought those efforts.

The Stock Market has tumbled since Barack Obama was inaugurated and pushed his socialistic policies.

Greg Brown at MoneyNews.com writes:

Since Barack Obama was sworn in as president on Jan. 20, stocks have tumbled to record lows — with investors losing an estimated $2.5 trillion in market value.

The trend continued Thursday, with the Dow closing down 281 points, a 4.1 percent drop for the day. Since Inauguration Day, the Dow has fallen 20.4 percent.

All week, negative headlines have competed with the slumping market ticker, including early news Thursday that General Motors might well go bankrupt despite billions in taxpayer loans.

As selling sped up, Citigroup traded at one point under $1 a share, General Electric dipped under $7, and international financial names like Barclays saw declines of nearly 30 percent on the day.

"Everybody is so bearish right now that you would expect to be in the midst of a counter-trend rally," Steven Goldman, market strategist at Weeden & Co, told CNNMoney.

"But the implosion in the banking and insurance sectors is just overwhelming."

Let's call it for what it is, it's the Obama Stock Market Crash of 2009.

To read the full article, go here.

“The trouble with socialism is that you eventually run out of other people’s money.”
–Margaret Thatcher.

"Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery."
- Winston Churchill

Limbaugh Electrified CPAC

Talk show king Rush Limbaugh wowed the annual Conservative Political Action Conference (CPAC) today. The event is sponsored by the Conservative Union.

Limbaugh, originally scheduled to address the convention for about 20 minutes, spoke for nearly a hour and a half before a crowd estimated at over 9,000. Two other ballrooms were filled with attendees watching on big screen monitors.

"Ladies and gentleman, this is my first ever address to the nation," Limbaugh kidded, observing that FOX News and C-SPAN were broadcasting the speech live. Unlike Obama, Rush observed, he didn't need to use a telepromptor.

He noted that although the Democrats won the last election, conservatives are not the minority. He said, "We can take this country back. All we need is to nominate the right candidate."

He also poked fun at Vice President Joe Biden for some recent gaffes and he also noted that Sen. Christopher Dodd and Rep. Barney Frank were instrumental in the failure of the sub-prime mortgage giants Fannie Mae and Freddy Mac. While the Democrats are praised for "good intentions," they aren't judged on their results, Limbaugh said. He called those results "cruel."

He attacked the Democrats on several issues and skewered Obama's stimulus package and budget plan.

"It's not new. It's not change. And it's not hope," Limbaugh said.

He also told conservative to stand by their principles and fight the "bastardization of the Constitution that the Obama plans are."

Here's a Libertarian's review of Limbaugh's speech: Limbaugh Defines Conservatives

Specter's An Idiot; Obama's A Liar

Above, three GOP defectors.

Two things ticked me off today concerning the stimulus/porkulus bill now before the U.S. Senate.

First, I was listening to Sean Hannity's show on the way to work and he had Sen. Arlen Specter, R-PA call in. Despite many excellent arguments given by Hannity against the bill, Specter said he is "independent" and believes that the government "has to act". Otherwise, he said, the economy would be headed for disaster. He refused to even reconsider his support for the bill. He seems to think that it's either this bill or nothing at all.

At the end of the interview, Hannity was incredulous and I was angry. Specter is up for election next year, and he's got to go!

Second, I caught President Barack Obama's first prime time press conference. I noticed that he only picked reporters who'd give him softball questions. What really got to me was that he attributes the current economic mess to the policies of "the last eight years." He blamed it on the Bush tax cuts. No mention was made of the fact that the mess was caused by lenders, led by Fannie Mae and Freddie Mac, who provided mortgages to people who were unqualified for them under pressure by Democrats led by Rep. Barney Frank and Sen. Chris Dodd.

Hugh Hewitt saw the press conference like this:

But when he distorted the GOP opposition as wanting to do nothing he lost the game. The American people are tuned into this debate and know very well that the GOP is committed to a large but balanced stimulus plan that puts tax relief and immediate infrastructure spending to work to immediately surge the economy. They have listened closely to the arguments made on the Senate floor and know that the president's bald mischaracterization of those positions is just false.

Obama told another whopper when he said the stimulus bill contains "no earmarks." Practically the whole thing is an earmark, with goodies to satisfy forty years of liberal desires!

Obama also said that he hopes to gain the trust of Republicans, even if there's disagreements. If he wants the trust of Republicans, he should stop lying about the cause of the mortgage meltdown and blaming it on the previous administration.

It's Official: We're In A Recession! Duh!

As if we didn't know this already, but it is now official: We're in a recession! Well, duh!

From FoxBusiness.com:

The National Bureau of Economic Research declared Monday that the U.S. has been in a recession since last December.

While it may now be official, the announcement hardly came as news to economists and consumers.

“We’ve been saying this since February or March,” said Gus Faucher, director of macroeconomics at Moody’s Economy.com. “It’s been pretty obvious for a while.”

Faucher cited as evidence payroll employment numbers that have been falling every month since January. Private sector employment payroll figures have declined every month since last December, he added.

These figures have been indicating for months “that firms are cutting back and that they are producing less,” said Faucher.

A recession is traditionally defined as two consecutive quarters of economic contraction.

The NBER, a private group of leading economists, also cited declining employment numbers as a key indicator that the recession began nearly a year ago.

Hell, I could have told you that. I was laid off last November and found that insurance claims work job offerings have been sparse at best. I did land a position as an independent contractor for an independent adjusting company last February, but claim assignments have been few and far between. Luckily, I maintained my security permits that I obtained years ago when I worked in armed private patrol. I was able to get a job working as a field supervisor for a company who contracts with Los Angeles County.

I have landed a job this week with another independent adjusting company. This one looks to be more promising. If things work out as I hope, I will just concentrate on that.

It is not surprising that insurance claims positions are sparse, as AIG problems has shown, insurance carriers are very much tied to the financial markets through investments. Since the mortgage meltdown, insurers have had a tough time because of bad investments, and by people cutting back on buying insurance. We can thank Sen. Chris Dodd, Rep. Barney Frank and others for this mess.

Is there a light at the end of the tunnel? I hope so, but right now I don't see it. Things may get worse before it gets better. But putting the same people in charge of the economy who denied problems with Countrywide, Fannie Mae, Freddie Mac, et al is not boosting my confidence level any.

ADDENDUM: See How The Democrats Created The Financial Crisis by Kevin Hassett at Bloomberg.com.

Rahm Emanuel In Freddie Mac During Scandal

Chief of Staff desigate Rahm Emanuel was on the Board of Directors of Freddie Mac when the firm was hit by a scandal, it has been revealed.

According to ABCNews.com:

President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.

President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com. According to a complaint later filed by the Securities and Exchange Commission, Freddie Mac, known formally as the Federal Home Loan Mortgage Corporation, misreported profits by billions of dollars in order to deceive investors between the years 2000 and 2002.

Emanuel was not named in the SEC complaint but the entire board was later accused by the Office of Federal Housing Enterprise Oversight (OFHEO) of having "failed in its duty to follow up on matters brought to its attention."

In a statement to ABCNews.com, a spokesperson said Emanuel served on the board for "13 months-a relatively short period of time."

Emanuel was appointed to the Board by Bill Clinton and served there until he resigned in May 2001 to run for Congress.

The Associated Press notes:

Clinton appointed Emanuel to mortgage giant Freddie Mac's board, a post that paid him at least $292,774 in director's fees, according to a financial disclosure report Emanuel filed in 2002 when he ran for Congress. Emanuel served on the board when Freddie Mac misstated its earnings by $5 billion for 2000-2002. When the problem was uncovered in 2003, three top Freddie Mac executives were forced out.

And the Wall Street Journal writes:

Mr. Obama's choice of Mr. Emanuel to lead his White House staff through the economic crisis symbolizes the awkward balancing act that Democrats will face as they reshape the financial industry that they have also cultivated for political support.

Mr. Emanuel earned $16.2 million in a two-year stint working in Chicago for investment-banking firm Wasserstein Perella & Co. He also served on the board of Freddie Mac, the mortgage giant that was nationalized this year in the financial crisis.

It is interesting that Barack Obama seems to surround himself with Freddie Mac and Fannie Mae alumns. While Emanuel has not been charged with any wrongdoing, it certainly stinks that people associated (i.e., Jim Johnson, Jaime Gorelick, Frainklin Raines) with the failed two mortgage firms were a part of his campaign or now being selected to be a part of his administration.

It also underscores that the financial meltdown can be laid at the feet of the Democrats.

Christopher Dodd: The Crook Put In Charge Of The Investigation

The Associated Press reported today the following:

WASHINGTON (AP) — Arthur Levitt, the one-time chairman of the Securities and Exchange Commission, blamed his former agency Thursday for failures he said helped cause the financial meltdown.

A resource-strapped SEC allowed confusion and reckless risk-taking to dominate financial markets, Levitt, who led the agency from 1993 to 2001, told the Senate Banking Committee.

"As the markets grew larger and more complex — in scope and in products offered — the commission failed to keep pace. As the markets needed more transparency, the SEC allowed opacity to reign. As an overheated market needed a strong referee to rein in dangerously risky behavior, the commission too often remained on the sidelines," Levitt said.

His testimony came at a hearing on the roots of the economic crisis.

The SEC says the agency's enforcement staff levels are higher now, and the commission has taken many more enforcement actions, than was the case in the 1990s.

An SEC spokesman said he had no direct comment on Levitt's testimony, but noted that as chairman, Levitt hadn't sought the kind of regulations that he's now faulting the SEC for failing to impose.

Indeed, Levitt acknowledged that in 1998, he opposed imposing rules on a type of obscure and extremely complicated financial instrument — known as credit default swaps — that are increasingly being blamed for igniting the crisis. He instead called at the time for establishing a clearing facility to keep better track of the swaps, but didn't seek to mandate one.

"I wish that I had probed further. I wish that I had asked for swaps and derivatives to be given the transparency," Levitt said.

In the thick of the meltdown last month, current SEC Chairman Christopher Cox called for the swaps to be regulated as part of a broader financial overhaul Congress plans to tackle next year.

Sen. Chris Dodd, D-Conn., the panel chairman, blamed unscrupulous lending practices for the meltdown, saying the tactics "will be remembered as the financial crime of the century."

He said regulators "willfully ignored the abuses taking place on their beat."

This would be a laugh, but nobody's laughing. Dodd investigating the mortgage mess is like a robber being put in charge of investigating the robbery. Christopher Dodd, Barney Frank, Maxine Waters and other Democrats are responsible for this economic mess. They fought more regulations on Fannie Mae and Freddie Mac and disregarded Republican warnings of impending disaster. Dodd should look in the mirror.

On October 10, the Wall Street Journal wrote:

The Connecticut Senator has been out front denouncing the "companies that form the foundation of our financial markets," for "their insatiable appetite for risk." He has also decried "reckless, careless and sometimes unscrupulous actors in the mortgage lending industry" and he has proclaimed that "American taxpayers deserve to know how we arrived at this moment." To that end, we propose he take the stand -- under oath.

Former Countrywide Financial loan officer Robert Feinberg says Mr. Dodd knowingly saved thousands of dollars on his refinancing of two properties in 2003 as part of a special program the California mortgage company had for the influential. He also says he has internal company documents that prove Mr. Dodd knew he was getting preferential treatment as a friend of Angelo Mozilo, Countrywide's then-CEO.

That a "Friends of Angelo" program existed is not in dispute. It was crucial to the boom that Countrywide enjoyed before its fortunes turned. While most of the company was aggressively lending to risky borrowers and off-loading those mortgages in bulk to Fannie Mae and Freddie Mac, Mr. Feinberg's department was charged with making sure those who could influence Fannie and Freddie's appetite for risk were sufficiently buttered up. As a Banking Committee bigshot, Mr. Dodd was perfectly placed to be buttered.

In response to the charge that he knew he was getting favors, Mr. Dodd at first issued a strong denial: "This suggestion is outrageous and contrary to my entire career in public service. When my wife and I refinanced our loans in 2003, we did not seek or expect any favorable treatment. Just like millions of other Americans, we shopped around and received competitive rates." Less than a week later he acknowledged he was part of Countrywide's VIP program but claimed he thought it was "more of a courtesy."

Mr. Feinberg, who oversaw "Friends of Angelo" from 2000 to 2004, begs to differ. He told us that as the loan officer in charge he was supposed to make sure that the "VIP" clients knew at every step of the process that they were getting a special deal because they were "Friends of Angelo."

"People are referred into that department as 'very important people.' You're told that your loan is priced from Angelo. As the 'Friends of Angelo department,' [the department] has to give them a sense of importance and explain the reduction of fees and the rate as a result of being a 'Friend of Angelo,'" he says. According to a report by Dan Golden in Condé Nast Portfolio in August, other VIPs included Senator Kent Conrad. Mr. Golden reported that "Countrywide also offered special discounts to congressional staffers involved in housing issues."

As to Mr. Dodd, Mr. Feinberg says he spoke to the Senator once or twice and mostly to his wife and that like other FOAs Mr. Dodd got "a float down," which means that even after he had a preferred rate, when the prevailing rate dropped just before the closing, his rate was reduced again. Regular borrowers would pay extra for a last-minute adjustment, but not FOAs. "They were aware of it because they were notified and when they went to the closing they would see it," Mr. Feinberg says, adding that he "always let people in the program know that they were getting a very good deal because they were 'Friends of Angelo.'" All of this matters because Mr. Dodd was one of those encouraging Fan and Fred to plunge into "affordable housing" loans made by companies like Countrywide.

One indicator of his influence is the $165,400 in campaign contributions -- more than to any other politician -- that Fan and Fred have given him since 1989, according to the Center for Responsive Politics. These contributions are legal. But favors like those Mr. Dodd is alleged to have received may not be. Mr. Feinberg says he went public with his story because when he heard Senator Dodd on TV talking about predatory lending, he felt it was "hypocritical" and he says, "I just thought, 'This is wrong.'"

Mr. Dodd hasn't yet released his copies of the mortgage documents, though he promised to do so more than two months ago. His office told us this week they'd get back to us on that. Meanwhile, presumably the Justice Department can have Mr. Feinberg's Countrywide documents, if it's interested.

Dodd has much to answer for on Countrywide, Fannie Mae and Freddie Mac. His sweetheart deal with Countrywide amounts to kick-backs.

As Jonah Goldberg wrote in National Review Online:

The biggest dose of poison entered the financial bloodstream through Washington. And some people warned us. In 2005, Fannie Mae revealed it overstated earnings by $10.6 billion and that it didn’t really know what was going on. The Bush administration pushed for reforms, but those efforts were rebuffed by Congress, with Democrats Barney Frank and Christopher Dodd taking point, because Fannie and Freddie have spent millions in campaign contributions.

In 2005, McCain sponsored legislation to thwart what he later called “the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”

Obama, the Senate’s second-greatest recipient of donations from Fannie and Freddie after Dodd, did nothing.

Meanwhile, Raines, the head of a government-supported institution, made $52 million of his $90 million compensation package thanks in part to fraudulent earnings statements.

But, ah yes, the greedy criminals responsible for this mess must be somewhere on Wall Street.

Senator, if you really want to find the criminals responsible for this mess, the best place to find them is on Capitol Hill.

McCain Letter Demanding Action on Fannie/Freddie Released

A 2006 letter signed by John McCain and other Republican U.S. Senators demanding action on Fannie Mae and Freddie Mac has been released. Note that no Democrat senators signed the letter. Click on the image to see the full size.

Barney Frank's "Broke Bank Mountain"

Barney rubble

Per Mark Steyn at National Review Online:

It turns out the entire planetary meltdown is due to Congressman Frank's sex life:

Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.

So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions... Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie...

Frank met Moses in 1987, the same year he became the first openly gay member of Congress.

"I am the only member of the congressional gay spouse caucus," Moses wrote in the Washington Post in 1991. "On Capitol Hill, Barney always introduces me as his lover."

The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses "helped develop many of Fannie Mae’s affordable housing and home improvement lending programs."

Critics say such programs led to the mortgage meltdown that prompted last month’s government takeover of Fannie Mae and its financial cousin, Freddie Mac. The giant firms are blamed for spreading bad mortgages throughout the private financial sector... Three years later, President Clinton’s Department of Housing and Urban Development tried to impose a new regulation on Fannie, but was thwarted by Frank. Clinton now blames such Democrats for planting the seeds of today’s economic crisis.