a long read. I'm no poli-sci major, but this makes sense to me. somebody that's well versed should read this and see if it makes sense to them.


'Crony' Capitalism Is Root Cause Of Fannie And Freddie Troubles
By TERRY JONES
INVESTOR'S BUSINESS DAILY | Posted Monday, September 22, 2008 4:30 PM PT

In the past couple of weeks, as the financial crisis has intensified, a new talking point has emerged from the Democrats in Congress: This is all a "crisis of capitalism," in socialist financier George Soros' phrase, and a failure to regulate our markets sufficiently.

Well, those critics may be right — it is a crisis of capitalism. A crisis of politically driven crony capitalism, to be precise.

Indeed, Democrats have so effectively mastered crony capitalism as a governing strategy that they've convinced many in the media and the public that they had nothing whatsoever to do with our current financial woes.

Barack Obama has repeatedly blasted "Bush-McCain" economic policies as the cause, as if the two were joined at the hip.

Funny, because over the past 8 years, those who tried to fix Fannie Mae and Freddie Mac — the trigger for today's widespread global financial meltdown — were stymied repeatedly by congressional Democrats.

This wasn't an accident. Though some key Republicans deserve blame as well, it was a concerted Democratic effort that made reform of Fannie and Freddie impossible.

The reason for this is simple: Fannie and Freddie became massive providers both of reliable votes among grateful low-income homeowners, and of massive giving to the Democratic Party by grateful investment bankers, both at the two government-sponsored enterprises and on Wall Street.

The result: A huge taxpayer rescue that at last estimate is approaching $700 billion but may go even higher.

It all started, innocently enough, in 1994 with President Clinton's rewrite of the Carter-era Community Reinvestment Act.

Ostensibly intended to help deserving minority families afford homes — a noble idea — it instead led to a reckless surge in mortgage lending that has pushed our financial system to the brink of chaos.

Subprime's Mentors

Fannie and Freddie, the main vehicle for Clinton's multicultural housing policy, drove the explosion of the subprime housing market by buying up literally hundreds of billions of dollars in substandard loans — funding loans that ordinarily wouldn't have been made based on such time-honored notions as putting money down, having sufficient income, and maintaining a payment record indicating creditworthiness.

With all the old rules out the window, Fannie and Freddie gobbled up the market. Using extraordinary leverage, they eventually controlled 90% of the secondary market mortgages. Their total portfolio of loans topped $5.4 trillion — half of all U.S. mortgage lending. They borrowed $1.5 trillion from U.S. capital markets with — wink, wink — an "implicit" government guarantee of the debts.

This created the problem we are having today.

As we noted a week ago, subprime lending surged from around $35 billion in 1994 to nearly $1 trillion last year — for total growth of 2,757% as of last year.

No real market grows that fast for that long without being fixed.

And that's just what Fannie and Freddie were — fixed. They became a government-run, privately owned home finance monopoly.

Fannie and Freddie became huge contributors to Congress, spending millions to influence votes. As we've noted here before, the bulk of the money went to Democrats.

Dollars To Dems

Meanwhile, Fannie and Freddie also became a kind of jobs program for out-of-work Democrats.

Franklin Raines and Jim Johnson, the CEOs under whom the worst excesses took place in the late 1990s to mid-2000s, were both high-placed Democratic operatives and advisers to presidential candidate Barack Obama.

Clinton administration official Jamie Gorelick also got taken care of by the Fannie-Freddie circle. So did top Clinton aide Rahm Emanuel, among others.

On the surface, this sounds innocent. Someone has to head the highly political Fannie and Freddie, right?

But this is why crony capitalism is so dangerous. Those in power at Fannie and Freddie, as the sirens began to wail about some of their more egregious practices, began to bully those who opposed them.

That included journalists, like the Wall Street Journal's Paul Gigot, and GOP congressmen, like Wisconsin Rep. Paul Ryan, whom Fannie and Freddie actively lobbied against in his own district. Rep. Cliff Stearns, R-Fla., who tried to hold hearings on Fannie's and Freddie's questionable accounting practices in 2004, found himself stripped of responsibility for their oversight by House Speaker Dennis Hastert — a Republican.

Where, you ask, were the regulators?

Congress created a weak regulator to oversee Freddie and Fannie — the Office of Federal Housing Enterprise Oversight — which had to go hat in hand each year to Capitol Hill for its budget, unlike other major regulators.

With lax oversight, Fannie and Freddie had a green light to expand their operations at breakneck speed.

Fannie and Freddie had a reliable coterie of supporters in the Senate, especially among Democrats.

"We now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years," wrote economist Kevin Hassett on Bloomberg.com this week.

Buying Friends In High Places

Over the span of his career, Obama ranks No. 2 in campaign donations from Fannie and Freddie, taking over $125,000. Dodd, head of the Senate Banking panel, is tops at $165,000. Clinton, ranked 12th, has collected $75,000.

Meanwhile, Freddie and Fannie opened what were euphemistically called "Partnership Offices" in the districts of key members of Congress to channel millions of dollars in funding and patronage to their supporters.

In the space of a little more than a decade, Fannie and Freddie spent close to $150 million on lobbying efforts. So pervasive were their efforts, they seemed unassailable, even during a Republican administration.

Yet, by 2004, the crony capitalism had gone too far. Even OFHEO issued a report essentially criticizing Fannie and Freddie for Enron-style accounting that let them boost profits in order to pay their politically well-connected executives hefty bonuses.

It emerged that Clinton aide Raines, who took Fannie Mae's helm as CEO in 1999, took in nearly $100 million by the time he left in 2005. Others, including former Clinton Justice Department official Gorelick, took $75 million from the Fannie-Freddie piggy bank.

Even so, Fannie and Freddie were forced to restate their earnings by some $3.5 billion, due to the accounting shenanigans.

As we noted, those who tried to halt this frenzy of activity found themselves hit by a political buzz saw.

President Bush, reviled and criticized by Democrats, tried no fewer than 17 times, by White House count, to raise the issue of Fannie-Freddie reform. A bill cleared the Senate Banking panel in 2005, but stalled due to implacable opposition from Democrats and a critical core of GOP abettors. Rep. Barney Frank, who now runs the powerful House Financial Services Committee, helped spearhead that fight.

Now, with the taxpayer tab approaching $1 trillion or more, we're learning the costs of crony capitalism.

In the coming days, an IBD series will look into this phenomenon in greater detail — how we got here, who's responsible, and why nothing was done.

http://www.ibdeditorial.com/IBDArticles.aspx?id=306978378974502

Good Intentions Paved The Road To Subprime-Stoked Meltdown
By TERRY JONES
INVESTOR'S BUSINESS DAILY | Posted Tuesday, September 23, 2008 4:30 PM PT

For those looking for a real start to today's financial meltdown and government rescue, you need to go back — way back — to 1977, and the Jimmy Carter presidency.

It was then, for the best and purest of reasons, that well-meaning Democratic members of Congress brought the Community Reinvestment Act into being.

The main idea, as the late Democratic Sen. William Proxmire said on the Senate floor in 1977, was "to eliminate the practice of redlining by lending institutions."

That term — "redlining" — seems quaint today. But in the 1970s, it was widely seen as the cause of housing disparities between white and black Americans.

The redlining theory went thus: Banks set up shop in low-income areas, took deposits, then lent the funds to richer areas — leaving poor and minority communities starved of housing and capital.

President Carter, a reformist former governor from the racially aware "New South," embraced the 1977 CRA as a way to end the supposed practice of redlining.

Coming as it did just years after other major civil rights legislation — including the 1964 Civil Rights Act, the Fair Housing Act of 1968 and the Equal Credit Opportunity Act of 1974 — community activists and others viewed it as essential to bringing African-Americans into the American dream.

At the time, the U.S. was in the middle of what came to be known as stagflation. After the first oil embargo in 1973 sent prices spiraling upward, the economy struggled to emerge from a vicious two-year recession in 1974 and 1975.

By 1977, inflation hit 7% — on its way to 14% in 1980. A year earlier, in 1976, 30-year mortgage rates crested 9% for the first time ever.

Meanwhile, the jobless rate stood at 7% — 14% for blacks. Many African-Americans felt frozen out of homeownership. As home prices soared, affordability became a crisis for black families.

In such a nasty economic environment, it's easy to see why something like the CRA got passed.

Good intentions, bad results.

Unfortunately, this well-intended law eventually led to a housing boom based on shoddy loan practices, a subsequent bust, and the financial mess we are in today.

Initially, the CRA was supposed to not just lend to poor areas, but to do so "consistent with safe and sound lending practices." That latter key proviso was ignored as CRA was implemented.

As IBD has already shown, the CRA forced banks and savings institutions — then, far more heavily regulated than today — to make loans to poor, often uncreditworthy minority borrowers.

Banks were required to keep extensive records of their minority lending practices. Those that didn't pass muster could be denied the right to expand their branches, merge with other banks, or boost lending in new markets.

Regulators didn't need to do much policing; they let that job fall to radical community groups, such as ACORN and NACA, which siphoned literally billions of dollars from banks and lent the money in poor communities.

It wasn't entirely altruistic.

The community groups booked thousands of dollars in fees for every loan. And loans often required recipients to become active in radical causes — what's today called "community organizing."

If a community group decided a bank was operating in bad faith, it could affect the bank's "CRA rating" — the scorecard for how well it was doing as a minority lender.

Banks became pliable, easy targets. No bank CEO wanted to be mau-maued as an enemy of the poor. They became shakedown targets, channeling billions of dollars to groups that had, at best, meager results to show for it.

That's how it began. Later, in the Clinton era, Fannie Mae and Freddie Mac got involved — buying up bad loans from banks, and securitizing them for sale on world markets. The seeds of the subprime meltdown were planted.

As of last year, the homeownership rate among all Americans was 68.1% — up from 63% in 1970. For black Americans, it's up from just below 42% in 1970 to 47.2% last year. It's still below 50%, and still the lowest of any minority group.

Today, Americans might rightly ask 31 years after the CRA was passed whether the more than $1 trillion lent under its auspices did what its proponents promised.

http://www.ibdeditorial.com/IBDArticles.aspx?id=307061229501695


How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable
By TERRY JONES
INVESTOR'S BUSINESS DAILY | Posted Wednesday, September 24, 2008 4:30 PM PT

One of the most frequently asked questions about the subprime market meltdown and housing crisis is: How did the government get so deeply involved in the housing market?

The answer is: President Clinton wanted it that way.

Fannie Mae and Freddie Mac, even into the early 1990s, weren't the juggernauts they'd later be.

While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was Clinton who supercharged the process. After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.

In so doing, he turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocs and handed favors, jobs and money to political allies. This potent mix led inevitably to corruption and the Fannie-Freddie collapse.

Despite warnings of trouble at Fannie and Freddie, in 1994 Clinton unveiled his National Homeownership Strategy, which broadened the CRA in ways Congress never intended.

Addressing the National Association of Realtors that year, Clinton bluntly told the group that "more Americans should own their own homes." He meant it.

Clinton saw homeownership as a way to open the door for blacks and other minorities to enter the middle class.

Though well-intended, the problem was that Congress was about to change hands, from the Democrats to the Republicans. Rather than submit legislation that the GOP-led Congress was almost sure to reject, Clinton ordered Robert Rubin's Treasury Department to rewrite the rules in 1995.

The rewrite, as City Journal noted back in 2000, "made getting a satisfactory CRA rating harder." Banks were given strict new numerical quotas and measures for the level of "diversity" in their loan portfolios. Getting a good CRA rating was key for a bank that wanted to expand or merge with another.

Loans started being made on the basis of race, and often little else.

"Bank examiners would use federal home-loan data, broken down by neighborhood, income group and race, to rate banks on performance," wrote Howard Husock, a scholar at the Manhattan Institute.

But those rules weren't enough.

Clinton got the Department of Housing and Urban Development to double-team the issue. That would later prove disastrous.

Clinton's HUD secretary, Andrew Cuomo, "made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis," the liberal Village Voice noted. Among those decisions were changes that let Fannie and Freddie get into subprime loan markets in a big way.

Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks.

Since they could borrow at lower rates than banks due to implicit government guarantees for their debt, the government-sponsored enterprises boomed.

With incentives in place, banks poured billions of dollars of loans into poor communities, often "no doc" and "no income" loans that required no money down and no verification of income.

By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market — a staggering exposure.

Worse still was the cronyism.

Fannie and Freddie became home to out-of-work politicians, mostly Clinton Democrats. An informal survey of their top officials shows a roughly 2-to-1 dominance of Democrats over Republicans.

Then there were the campaign donations. From 1989 to 2008, some 384 politicians got their tip jars filled by Fannie and Freddie.

Over that time, the two GSEs spent $200 million on lobbying and political activities. Their charitable foundations dropped millions more on think tanks and radical community groups.

Did it work? Well, if measured by the goal of putting more poor people into homes, the answer would have to be yes.

From 1995 to 2005, a Harvard study shows, minorities made up 49% of the 12.5 million new homeowners.

The problem is that many of those loans have now gone bad, and minority homeownership rates are shrinking fast.

Fannie and Freddie, with their massive loan portfolios stuffed with securitized mortgage-backed paper created from subprime loans, are a failed legacy of the Clinton era.

http://www.ibdeditorial.com/IBDArticles.aspx?id=307149667289804


Congress Pushed Fannie, Freddie In Wrong Direction During 1990s
By TERRY JONES
INVESTOR'S BUSINESS DAILY | Posted Thursday, September 25, 2008 4:30 PM PT

It was October 1992, nearly 15 years before the housing meltdown and subprime crisis. Republican Rep. Jim Leach of Iowa was on the floor of the House, talking about something that no one at the time seemed to care about: the potential danger that Fannie Mae and Freddie Mac posed to the economy.

In remarks later reported by the Washington Post, Leach warned that Fannie and Freddie were changing "from being agencies of the public at large to money machines for the stockholding few."

Leach's prescient comments went unheeded — indeed, Congress spent the next decade and a half avoiding the alarms going off around Fannie and Freddie. Until, that is, it was too late.

Led by top Democrats, including Rep. Barney Frank in the House and Sen. Chris Dodd in the Senate, Congress not only did nothing about the growing risks at Fannie and Freddie, it in essence doubled down on their risks.

The Democrat-led Congress of the early 1990s eased capital limits on the two mortgage lending giants, letting them use enormous leverage — 2.5% of assets at Fannie and Freddie, vs. 10% for banks — to expand lending to low-income, minority communities.

Regulator Reined In

Congress, with the passage of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, also created a regulator for Fannie and Freddie — but made sure that, from the very beginning, it would essentially be neutered.

That regulator, the Office of Federal Housing Enterprise Oversight, an arm of the Department of Housing and Urban Development, was unique among financial regulators in that it had to go back each year to Congress for its budget.

This assured its total dependence on Congress — a less-than-ideal situation for a regulator.

Over the next decade or so, Fannie and Freddie made sure that OFHEO stayed off their backs, funneling $200 million to various political causes and community activists while donating to 354 political candidates of both parties.

Congress Eases Lending Rules

In 1994, the Democratic Congress again moved, passing the Community Reinvestment Act — an update of the original 1977 law.

For the first time, homeowners that previously didn't qualify — either because they couldn't put any money down or had bad credit — were made eligible for government-backed loans.

The housing boom was on.

During the 1990s, according to one Fed study, Fannie and Freddie enjoyed a subsidy of as much as $182 billion, with most of that going to shareholders — not to poor borrowers, as supporters of the government-sponsored enterprises have often claimed.

Still, even after the GOP won control of Congress in 1995, Democrats in both houses worked with President Clinton as Fannie and Freddie's enablers.

Clinton, bypassing Republicans in Congress, had HUD rewrite the rules for Fannie and Freddie to let them get involved in the subprime market for the first time.

Robert Rubin's Treasury got involved too, reworking its own rules to crack down on banks that didn't make enough loans to distressed, minority neighborhoods.

That year, Fannie Mae bought an estimated $18.6 billion in subprime loans from banks. By 2004, that amount had exploded to $175 billion, or 44% of the total.

Republicans controlled Congress from 1995 through 2006. But under Clinton their hold was precarious, and with the Internet boom on and several foreign financial crises to deal with, Fannie and Freddie got lost in the shuffle.

Too Little, Too Late

At the tail end of Clinton's administration, Treasury officials under the new secretary, Lawrence Summers, became alarmed at Fannie and Freddie's excesses.

Undersecretary Gary Gensler went to Congress in 2000 seeking an end to the companies' special status — especially the "implicit" federal guarantee of their now-$5.4 trillion loan portfolio — and more power for regulators to boost the companies' capital requirements.

Democrats raised a ruckus. So did Fannie and Freddie, which were both headed by politically well-connected CEOs who knew how to strategically reward — and punish — those who crossed them.

"We think that the statements evidence a contempt for the nation's housing and mortgage markets," Freddie Mac spokeswoman Sharon McHale said at the time, summing up the sentiment in Congress.

It was the last chance during the Clinton era for anything like real reform.

http://www.ibdeditorial.com/IBDArticles.aspx?id=307241242284619


Saddest Thing About This Mess: Congress Had Chance To Stop It
By TERRY JONES
INVESTOR'S BUSINESS DAILY | Posted Friday, September 26, 2008 4:30 PM PT

Could the crisis at Fannie Mae-Freddie Mac and the subprime meltdown have been avoided? The answer is yes.

As early as 1992, alarm bells were going off on the threat Fannie and Freddie posed to our financial system and our economy. Intervention at any point could have staved off today's crisis. But Democrats in Congress stood in the way.

As the president recently said, Democrats have been "resisting any efforts by Republicans in the Congress or by me . . . to put some standards and tighten up a little on Fannie Mae and Freddie Mac."

No, it wasn't President Bush who said that; it was President Clinton, Democrat, speaking just last week.

Interesting, because it was his administration's relentless focus on multiculturalism that led to looser lending standards and regulatory pressure on banks to make mortgage loans to shaky borrowers.

Freddie and Fannie, backed by an "implicit" taxpayer guarantee, bought hundreds of billions of dollars of those subprime loans.

The mortgage giants, whose executive suites were top-heavy with former Democratic officials (and some Republicans), worked with Wall Street to repackage the bad loans and sell them to investors.

As the housing market continued to fall in 2007, subprime loan portfolios suffered major losses. The crisis was on — though it was 15 years in the making.

Democrats Blocked Reform

Just as Republicans got blamed for Enron, WorldCom and other early-2000s scandals that were actually due to the anything-goes Clinton era, the media are now blaming them for the mortgage meltdown.

But Republicans tried repeatedly to bring fiscal sanity to Fannie and Freddie. Democrats opposed them, especially Sen. Chris Dodd and Rep. Barney Frank, who now run Congress' key banking panels.

History is utterly clear on this.

After Treasury Secretary Lawrence Summers warned Congress in 1999 of the "systemic risk" posed by Fannie and Freddie, Congress held hearings the next year.

But nothing was done. Why? Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place.

"We manage our political risk with the same intensity that we manage our credit and interest rate risks," Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama adviser, bragged to investors in 1999.

In November 2000, Clinton's HUD hailed "new regulations to provide $2.4 trillion in mortgages for affordable housing for 28.1 million families." It made Fannie and Freddie take part in the biggest federal expansion of housing aid ever.

Soon after taking office, Bush had his hands full with the Clinton recession and 9/11. But by 2003, he proposed what the New York Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."

The plan included a new regulator for Fannie and Freddie, one that could boost capital mandates and look at how they managed risk.

Even after regulators in 2003 uncovered a scheme by Fannie and Freddie executives to overstate earnings by $10.6 billion to boost bonuses, Democrats killed reform.

"Fannie Mae and Freddie Mac are not facing any kind of financial crisis," said Rep. Frank, then-ranking Democrat on the Financial Services Committee.

North Carolina Democrat Melvin Watt accused the White House of "weakening the bargaining power of poorer families and their ability to get affordable housing."

In 2005, then-Fed Chairman Alan Greenspan told Congress: "We are placing the total financial system of the future at substantial risk."

McCain Urged Changes

That year, Sen. John McCain, one of three sponsors of a Fannie-Freddie reform bill, said: "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."

Sen. Harry Reid — now Majority Leader — accused the GOP of trying to "cripple the ability of Fannie Mae and Freddie Mac to carry out their mission of expanding homeownership."

The bill went nowhere.

This year, the media have repeated Democrats' talking points about this being a "Republican" disaster. Well, McCain has repeatedly called for reforming the mortgage giants. The White House has repeatedly warned Congress. This year alone, Bush urged reform 17 times.

Some GOP members are complicit. But Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats.

That's why taxpayers are now being asked for $700 billion.

http://www.ibdeditorial.com/IBDArticles.aspx?id=307322285431688



Desert Tuners

“When you come across a big kettle of crazy, it’s best not to stir it.”

my head just exploded

so wait....there's a crisis?

choosey moms choose J03Y wrote:so wait....there's a crisis?

in my underpants. wanna solve it?

LOL




Desert Tuners

“When you come across a big kettle of crazy, it’s best not to stir it.”

IN!

I love Monty Python.

KevinP (Stabby McShankyou) wrote:
and I'm NOT a pedo. everyone knows i've got a wheelchair fetish.

Good job Freq. This is what I've been saying for about a month now.

I can find all kinds of videos and articles about the Republicans warning about this for years and the Dem's in charge saying nothings wrong,it's under control,blah,blah,blah.

Now Obama's started saying "I warned them 2 years ago" and yet all I can find is this letter...

Quote:

Barack Obama - U.S. Senator for Illinois - obama.senate.gov
Obama Urges Bernanke, Paulson to Fight Foreclosures, Hold Homeownership Summit
Thursday, March 22, 2007
FOR IMMEDIATE RELEASE
Contact: Ben LaBolt

WASHINGTON, DC -- U.S. Senator Barack Obama today sent a letter to Federal Reserve Chairman Bernanke and Treasury Secretary Paulson urging them to immediately convene a homeownership preservation summit with key stakeholders to fight foreclosures driven by growth in the subprime mortgage market.

The text of the letter is below:

Dear Chairman Bernanke and Secretary Paulson,

There is grave concern in low-income communities about a potential coming wave of foreclosures. Because regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market, I urge you immediately to convene a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses to the challenge.

We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes. And while neither the government nor the private sector acting alone is capable of quickly balancing the important interests in widespread access to credit and responsible lending, both must act and act quickly.

Working together, the relevant private sector entities and regulators may be best positioned for quick and targeted responses to mitigate the danger. Rampant foreclosures are in nobody’s interest, and I believe this is a case where all responsible industry players can share the objective of eliminating deceptive or abusive practices, preserving homeownership, and stabilizing housing markets.

The summit should consider best practice loan marketing, underwriting, and origination practices consistent with the recent (and overdue) regulators’ Proposed Statement on Subprime Mortgage Lending. The summit participants should also evaluate options for independent loan counseling, voluntary loan restructuring, limited forbearance, and other possible workout strategies. I would also urge you to facilitate a serious conversation about the following:


What standards investors should require of lenders, particularly with regard to verification of income and assets and the underwriting of borrowers based on fully indexed and fully amortized rates.

How to facilitate and encourage appropriate intervention by loan servicing companies at the earliest signs of borrower difficulty.


How to support independent community-based-organizations to provide counseling and work-out services to prevent foreclosure and preserve homeownership where practical.


How to provide more effective information disclosure and financial education to ensure that borrowers are treated fairly and that deception is never a source of competitive advantage.


How to adopt principles of fair competition that promote affordability, transparency, non-discrimination, genuine consumer value, and competitive returns.


How to ensure adequate liquidity across all mortgage markets without exacerbating consumer and housing market vulnerability.

Of course, the adoption of voluntary industry reforms will not preempt government action to crack down on predatory lending practices, or to style new restrictions on subprime lending or short-term post-purchase interventions in certain cases. My colleagues on the Senate Committee on Banking, Housing and Urban Affairs have held important hearings on mortgage market turmoil and I expect the Committee will develop legislation.

Nevertheless, a consortium of industry-related service providers and public interest advocates may be able to bring quick and efficient relief to millions of at-risk homeowners and neighborhoods, even before Congress has had an opportunity to act. There is an opportunity here to bring different interests together in the best interests of American homeowners and the American economy. Please don’t let this opportunity pass us by.


Sincerely,

U.S. Senator Barack Obama

Nowhere does it address Fannie and Freddie.

If there's other warnings from Obama ,PLEASE show me.






"The FACTS are always subject to CHANGE once the TRUTH is applied"
"In the entire history of man the only stupid questions are the ones that don't get asked"

I'd just like to know if the information in my post is complete and viable. I'm not trying to bash any one particular person or political party. this is obviously a failure of the system in general, and certain key government people trying to stuff their pockets with money from the low- and middle-class.


Desert Tuners

“When you come across a big kettle of crazy, it’s best not to stir it.”

As far as what I've dug up so far it's pretty accurate. New info and truths are coming out all the time and will be for awhile.

I'm not trying to necessarily pin this on just the Dem's,BOTH parties are responsible in some form or another. But the Dem's have sure have put up a fight about any changes that have needed to made for a long long time.







"The FACTS are always subject to CHANGE once the TRUTH is applied"
"In the entire history of man the only stupid questions are the ones that don't get asked"

http://www.cnn.com/2008/POLITICS/10/01/paul.qanda/index.html#cnnSTCText

Like my Grandad and my Dad always taught me...

"You can't borrow your way out of debt."






"The FACTS are always subject to CHANGE once the TRUTH is applied"
"In the entire history of man the only stupid questions are the ones that don't get asked"

choosey moms choose J03Y wrote:http://www.cnn.com/2008/POLITICS/10/01/paul.qanda/index.html#cnnSTCText

good read Joe. that's who I'll be writing in come November.



Desert Tuners

“When you come across a big kettle of crazy, it’s best not to stir it.”

That could be just like a vote for Obama.

I like so many others tried this when Ross Perot was running and you see what we got...

(other wise it's what I'd do too)








"The FACTS are always subject to CHANGE once the TRUTH is applied"
"In the entire history of man the only stupid questions are the ones that don't get asked"

So how did the Democrats stop any reform since congress and the white house were in Republican control for 6 or the last 8 years? Did the Republicans reform the system in that 6 years and the Democrats changed it back in the last 2 years?

KevinP (Stabby McShankyou) wrote:
and I'm NOT a pedo. everyone knows i've got a wheelchair fetish.

IIRC, the republicans were in control, but not enough to easily get majority vote in the house or the senate. and reading the articles in my first post, both Democrats and Republicans could probably be implicated in this.



Desert Tuners

“When you come across a big kettle of crazy, it’s best not to stir it.”

Just because you have the majority in the Senate and/or House doesn't mean you can get reforms passed. You just saw this on Monday.

Read the paragraph marked "Democrats Block Reform". No politician wants go back to his state marked as "your against poor people".





"The FACTS are always subject to CHANGE once the TRUTH is applied"
"In the entire history of man the only stupid questions are the ones that don't get asked"

FReQ Z (ikE-Zed) wrote:IIRC, the republicans were in control, but not enough to easily get majority vote in the house or the senate. and reading the articles in my first post, both Democrats and Republicans could probably be implicated in this.

They are both at fault, I just love how people want to blame one side more than the other. They are all crooked. The sooner the American public does something about it the better. People bitch and bitch but they always vote for one of the two major parties. People need to get their heads out of their asses and vote Green or Libertarian and run ALL the Democrats and Republicans out of Washington.

KevinP (Stabby McShankyou) wrote:
and I'm NOT a pedo. everyone knows i've got a wheelchair fetish.

Harrington (Fiber Faber) wrote:

FReQ Z (ikE-Zed) wrote:IIRC, the republicans were in control, but not enough to easily get majority vote in the house or the senate. and reading the articles in my first post, both Democrats and Republicans could probably be implicated in this.

They are both at fault, I just love how people want to blame one side more than the other. They are all crooked. The sooner the American public does something about it the better. People bitch and bitch but they always vote for one of the two major parties. People need to get their heads out of their asses and vote Green or Libertarian and run ALL the Democrats and Republicans out of Washington.

I wholeheartedly agree.



Desert Tuners

“When you come across a big kettle of crazy, it’s best not to stir it.”

The main problem is systemic. What the government tried to do, is basically allow poor people to own houses without doing anything which would lower the market prices of the houses because people who invest in real-estate hate that. The government also (well, I hope they did) wanted to avoid economical monopoly. I mean, what's to keep some millionaire from buying up houses no one can afford and then renting them out? That's what's happened in Europe and what's happening in Canada. If you're blue collar, you rent, end of story.

The United-States has always prided itself, and with good reason, on being a place where home ownership is almost a right.

However, because of greed, they couldn't allow house prices to go down so they simply made sure that if anyone wanted a house they should get in debt over it. Also, house prices have gotten so high that some people clutched at those impossible morgages out of desperation. Just look at me, I live in a town that has become a retirement community in the last ten years. Basically, every house within a 100 mile radius has been bought and priced out of my league, and I make 15 bucks an hour. Not great money, but not bad either. It's not that I'm being snobby here and refusing to buy a house that doesn't live up to my standards. There are NO houses, none. There are a few cabins in the middle of nowhere and a few trailerhomes, but even those are priced slightly above what the bank will lend me. The bank loan I could get is 50 grand, not a penny more and every place around here is at least twice that. Now, imagine someone who has a kid and another on the way (for example) who's worked at the same place for 10-15 years, is he gonna up and move out the area and try to get a new job somewhere else because he can't afford to buy a decent place to raise a family? Nobody wants to raise a couple of kids in a small appartment. Because that's another problem around here. No decent appartments. You can either rent a tiny place in a nice area or a rat's nest in the crack part of town. When I was a kid this wasn't the case, we were all blue collar and everyone had a house and a car and a couple of kids. Think I'll ever have kids? It'd be impossible.

The problem in Canada is that the banks almost refuse you for a loan before you finish walking in the door, the problem in the United-States is that the banks would approve you for a loan whose monthly payments were more than your entire monthly salary.

Somewhere in between is a sane answer.

And as long as they keep trying to prop up this up the price of housing won't drop down to wher it should be. Used to be the price of homes stayed pretty much in line with inflation.

Now the "value" of a house just dropped 16% on average. If they would let it drop another 10-15% it would be back where it should be. Of course we'll probably still have to to pay the inflated value in property taxes...





"The FACTS are always subject to CHANGE once the TRUTH is applied"
"In the entire history of man the only stupid questions are the ones that don't get asked"

john317(AKA Gary the Old guy) wrote:
Now the "value" of a house just dropped 16% on average. If they would let it drop another 10-15% it would be back where it should be. Of course we'll probably still have to to pay the inflated value in property taxes...

I hear ya, but it is hard to lower taxes when the government is so far into debt. Granted it is popular to the people but it is not a responsible business move.


I am disappointed that no one got my Monty Python crack. I know the guy who wrote all the articles that FReQ Z posted were by Terry Jones founder of Tavelocity, but one of the guys from Monty Python was named Terry Jones too.

KevinP (Stabby McShankyou) wrote:
and I'm NOT a pedo. everyone knows i've got a wheelchair fetish.

FReQ, good read, and yes, it's pretty accurate. Democrats have always been very good at twisting things to make themselves look like they are more concerned about the average person than Republicans are. They have always been good at painting Republicans as anti-middle class. That is pure scare-tactics, that unfortunately work, because too many people don't bother to look into things for themselves.

Harrington (Fiber Faber) wrote:...I hear ya, but it is hard to lower taxes when the government is so far into debt. Granted it is popular to the people but it is not a responsible business move...

A classic misunderstanding of the concept of lowering taxes is that by doing so, economic activity increases, thereby increasing revenue. Everyone looks at it like there is only a finite amount of income to tax, so reducing taxes equals reducing revenue.

To make it simple, think about this: why do businesses have sales? If it were because they believed they would sell the same amount of items for less money, they wouldn't do it. It's because they believe the increase in quantity of items sold will give them an overall increased amount of profit dollars. This is the same exact concept behind lowering taxes, and it has worked on more than one occasion. By the same token, raising anyone's taxes can cause the oposite effect. If the government could ever get over it's need to make everything complicated, and make a flat tax rate, with certain basic deductions, things would operate a lot smoother, and it would truly be fair.

Another major problem that our economy is subject to is consumer confidence, and how people can make their fears come true. If people think the economy is slowing down, they tighten their spending, and the economy slows down. It's a very tough thing to overcome, because of the fact that it's self-fulfilling. The stimulus package would have worked, except for the fact that it should have come in 2007, when the economy wasn't already headed toward the downward spiral.