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Bush is not the problem with the economy,

by gagrice on Sun Oct 05 14:27:16 PDT 2008

It is Congress that dropped the ball: September 11, 2003 New Agency Proposed to Oversee Freddie Mac and Fannie Mae By STEPHEN LABATON The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios. The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates. Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission. After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan. ''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members. Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products. Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.'' ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' Representative Melvin L. Watt, Democrat of North Carolina, agreed. ''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said. http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B6- 3&sec=&spon=&pagewanted=print Guess who shot it down? A year later Raines was forced to retire under pressure from the SEC for cooking the books. And now it is costing tax payers half a trillion dollars to fix what the Bush administration tried to fix 5 years ago.

Re: McCain's Fannie and Freddie Connections [dallasdude1]

by gagrice on Sat Oct 04 20:04:48 PDT 2008

Suarez oversaw the lending giant's $47,510,000 lobbying campaign from 2003 to 2006. Franklin Raines was CEO at the time. He took over $100 million in bonus money on bogus profit claims. Pressman would have been credible if he had told the whole story instead of Cherry Picking the McCain connections to Fannie Mae. Too bad there is no such thing as honest journalism anymore. I would like to know the WHOLE story of how Fannie Mae got themselves into a $500 billion mess. We have to go after all the responsible parties. Not just the ones we do not agree with politically. Your article started out like it was going to be honest. Too bad I do not see a single Democrat involved in his story.

David Sirota Saying 'No Deal' to this New Deal

by dallasdude1 on Fri Oct 03 16:23:25 PDT 2008

The marriage of American capitalism and democracy has always been a Pamela Anderson and Tommy Lee affair - stormy and erratic since its hasty wedding. But during the debate over a Wall Street bailout this week, we watched that matrimonial knot unwind into a tangled tale of terror. As a financial crisis became a political panic, capitalism murdered democracy (ironically, while pursuing a vaguely socialist bailout). Only, unlike a typical horror story, the dead body wasn't hidden, it was dumped in the nation's public square. The fiasco started, like most, with unreasonable demands. Under threat of financial meltdown, capitalism's corporate lobbyists asked our democracy to forsake its usual deliberations and hand over $700 billion of taxpayer money in less than a week. Many were surprised when democracy responded with such valiant defiance. As television screens split between the floors of the stock exchange and the House of Representatives, lawmakers initially voted with their constituents and against the bailout. That's when this husband-and-wife argument escalated into a grisly crime of passion. CNN's Ali Velshi frothed that "the banks and the companies don't care about the intricacies" of democratic deliberations. A CEO angrily told CNN that "the money is being held hostage to the political process" - as if government resources are rightfully Wall Street's. And as the Dow tanked, the Chamber of Commerce threatened retribution against recalcitrant lawmakers. The final deathblow came from TINA, shorthand for "There Is No Alternative" - the motto that Margaret Thatcher used to peddle her corporatism, and that Washington and Wall Street used to promote theirs. Whether it was a Barclays Capital executive telling reporters "there is no choice" or Rep. Joe Crowley, D-N.Y., insisting that "this needs to be done and it needs to be done right away," responsibly democratic prescriptions were pulverized by capitalism's deranged mantra of inevitability and urgency. To even mention, as economist Dean Baker did, that the taxpayer giveaway could exacerbate the crisis was to risk flogging by columnists like Tom Friedman. The sycophantic flat-earther vilified bailout opponents (i.e., most Americans) as mentally incapacitated deadbeats who "can't balance their own checkbooks." By the time the fight hit Congress' upper chamber, senatorial morticians were embalming democracy's corpse. Senate Majority Leader Harry Reid permitted consideration of just one alternative, and he rigged parliamentary procedure to guarantee its defeat. Yet, if capitalism took democracy's life through a perverse legislative process, then it robbed its grave with the bailout bill's substance. American democracy is defined by vesting government power in systems and rules, not in individuals and whims. We have been, as John Adams wrote, "an empire of laws, and not of men" - until now. Instead of responding to this meltdown by updating regulatory institutions or investing in job-creating infrastructure, the bailout proposes giving one unelected appointee - the Treasury secretary - complete authority to dole out $700 billion to bank executives, with little oversight. And here's the scary part: That lurch toward dictatorship was motivated not just by crony corruption, but also by a deeper ideological shift. We now face market forces uninhibited by democratic governance - Chinese dictators and Saudi princes can move trillions of dollars without so much as a press release. This bailout, marketed as a speed enhancer, is an attempt to discard democracy's checks and balances and pantomime that kind of autocracy. While our political culture still required a public sales job (thus, the fearmongering), the bill's czarism aims to permanently euthanize democracy in the name of improving our capitalism's global agility. In that sense, this week's spousal killing wasn't random. It was the beginning of a systematic assault on our Constitution and a radical departure from Franklin Roosevelt's original covenant - a dangerous "new deal" we must say "no deal" to.

Why is Franklin Raines a free man?

by gagrice on Tue Sep 30 17:08:46 PDT 2008

In 2006, the OFHEO announced a suit against Raines in order to recover some or all of the $50 million in payments made to Raines based on the overstated earnings initially estimated to be $9 billion but have been announced as 6.3 billion. Civil charges were filed against Raines and two other former executives by the OFHEO in which the OFHEO sought $110 million in penalties and $115 million in returned bonuses from the three accused. On April 18, 2008, the government announced a settlement with Raines together with J. Timothy Howard, Fannie's former chief financial officer, and Leanne G. Spencer, Fannie's former controller. The three executives agreed to pay fines totaling about $3 million, which will be paid by Fannie's insurance policies. Raines also agreed to donate the proceeds from the sale of $1.8 million of his Fannie stock and to give up stock options. The stock options however have no value. Raines also gave up an estimated $5.3 million of "other benefits" said to be related to his pension and forgone bonuses. An editorial in The Wall Street Journal called it a "paltry settlement" which allowed Raines and the other two executives to "keep the bulk of their riches." In 2003 alone, Raines's compensation was over $20 million In a settlement with OFHEO and the Securities and Exchange Commission, Fannie paid a record $400 million civil fine. Fannie, which is the largest American financier and guarantor of home mortgages, also agreed to make changes in its corporate culture and accounting procedures and ways of managing risk. In June 2008 The Wall Street Journal reported that Franklin Raines was one of several public officials who received below market rates loans at Countrywide Financial because the corporation considered the officeholders "FOA's"--"Friends of Angelo" (Countrywide Chief Executive Angelo Mozilo). He received loans for over $3 million while CEO of Fannie Mae. In accordance with the mission of Fannie Mae to enable home ownership by a greater proportion of the population, Franklin Raines, while Chairman and CEO, began a pilot program in 1999 to issue bank loans to individuals with low to moderate income, and to ease credit requirements on loans that Fannie Mae purchased from banks. Raines promoted the program saying that it would allow consumers who were "A notch below what our current underwriting has required" to get home loans. The move was intended in part to increase the number of minority and low income home owners. Some observers have noted that the expansion of easy credit to home buyers with a lesser ability to pay them back was one of the major contributing factors to the subprime mortgage crisis. Wiki $3 million in fines paid by the insurance company. Plus turning over worthless stock. How can people get away with this kind of behavior?

Obama had a part in sub-prime mess/financial crash

by xrunner2 on Tue Sep 30 07:16:59 PDT 2008

"Homeownership has been a cornerstone of the country’s economic strength throughout the past decade. “State and local governments nationwide must expand their efforts to ensure that every family in America has the opportunity to own a home,” said Davis. The home ownership by those who could not afford it began in the Clinton administration. It was aided and abetted through the years by Democrat US Reps such as Barney Frank, Maxine Waters of CA, Gregory Meeks of NY, Lacy Clay of Missouri and most significantly by Obama advisor Franklin Raines with regard to Fannie and Freddie. Also include Dem Jamie Gorelick of 911 fame who had put in procedures in the 90's that prevented FBI, CIA and other intelligence orgs from working together and finding and connecting "the dots". Perhaps Raines should be in jail for cooking books to enable him to illegitimately get millions in bonuses. House Republicans in late 2004 had wanted to put in reforms and better regulatory processes in Freddie and Fannie but Frank, Waters, Clay and Meeks strongly objected. The House Committee hearing on this matter, courtesy of CSPAN2, is on Utube. Obama had a hand in the sub-prime mess. He was recruited by Acorn founder Madeline Talbot back in 90's as "community organizer" to train agitators for Acorn in confrontational tactics. The agitators would go into banks and intimidate personnel and management to provide loans/mortgages to people who would otherwise not qualify. Acorn is the organization that also registers voters. They have been found to falsely register voters as in Washington State where it was found that of some 1600 voters registered in a particular time frame, less than 10 were legitimate. Public needs to know the ties and association between Obama and Acorn, both past and present. The "negotiated" financial rescue bill in Congress that failed yesterday had previously had a clause inserted by the Democrats that would have given some benefits to Acorn. Incredible!!!!!! But, House Republicans had found that part and had it removed. The Bill originally submitted by Bush/Paulson to Congress was 3 pages long. The one voted on was 100 pages.

Re: Who is the smart one? [rockylee]

by gagrice on Thu Sep 25 06:32:23 PDT 2008

Well you wouldn't have very many rich republicans left gagrice. Probably one of the more ruthless men in our history tells how to avoid taxes legally: The Kennedys' Secret Weapon At age 25, Joseph P. Kennedy was merely the president of a bank. Kennedy, however, soon established himself as a freewheeling investment banker, becoming a master of stock market manipulation and insider trading during the Roaring Twenties before the government regulated the securities market. Kennedy made another fortune in Hollywood, where he established RKO during the formative years of the movie industry. After liquidating his stock holdings just before the October 1929 crash, Kennedy used short sales to make huge profits during the Depression. Ironically, his insight into exploiting the system made him President Franklin D. Roosevelt's choice to become the first chairman of the brand new Securities and Exchange Commission. In his estate planning, Joseph Kennedy followed a simple strategy. Before the enactment of the Tax Reform Act of 1976, the estate tax greeted (and depleted) each successive generation like a gatekeeper. Having amassed a considerable fortune, Kennedy apparently saw the wisdom of avoiding a 77% tax. By passing wealth directly to his grandchildren and skipping a generation, he skipped an entire layer of estate taxation. For example, trusts Joseph Kennedy established for John F. Kennedy provided JFK with income for life as well as the right to withdraw up to 5% of principal in any year. During the Kennedy administration, the President's trust funds were said to be paying him $500,000 of annual income. Because Joseph Kennedy gave his son only a life estate, the assets were not subject to estate tax at JFK's death. Thus, the government taxed the assets only once, in Joseph P. Kennedy's estate, before those assets reached Joseph's grandchildren, John F. Kennedy Jr. and Caroline Kennedy Schlossberg. The Kennedy estate plan shows that when assets are unencumbered by transfer taxes or the need to benefit one particular generation, the family can productively invest those assets in long-term pursuits. The Kennedy trusts held assets ranging from businesses to real estate. The family holding company, Joseph P. Kennedy Enterprises, recently sold the Merchandise Mart in Chicago--which Joseph Kennedy purchased in 1945 for $13 million--for $625 million. Taking Kennedy's estate plan concept to its logical conclusion, a client could create a trust that is a perpetual source of revenues, will avoid transfer taxes forever and will serve as a family bank to finance his or her descendants. Although the common law rule against perpetuities imposes a time limit--a life in being plus 21 years can reach about 100 to 120 years--true dynasty trusts can be established, with various limitations, in a growing number of perpetuity havens: South Dakota, Wisconsin, possibly Idaho (ambiguities exist), Delaware (for personal property) and, most recently, Alaska, Arizona, Illinois and Maryland. references: http://www.time.com/time/magazine/article/0,9171,840408-2,00.html Does this sound familiar? Joseph P. Kennedy was the ambitious son of a prosperous Boston saloon keeper and ward boss. He married the mayor's daughter, went to Harvard, and generally made the most of his ample connections and talent. He ran a bank (admittedly two-bit) at 25, and was number-two man at a shipyard with more than 2,000 workers during World War I. At 30 he became a stockbroker and made a fortune through insider trading and stock manipulation. He was a master of the stock pool, a then-legal stunt in which a few traders conspired to inflate a stock's price, selling out just before the bubble burst. http://www.straightdope.com/columns/read/716/what-is-the-true-source-of-the-kenn- edy-familys-wealth