April 1, 2010
The Fed Admits To Breaking The Law
Now how long will it be before something is done about it?
The Fed has effectively usurped Article 1 Section 7 of The Constituion which reads in part:
All bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills.
The Fed effectively appropriated taxpayer funds without authorization of Congress. At the time these facilities were put in place neither TARP or any other Congressional authorization existed for them to do so, and to date no bill has been put through Congress authorizing the expenditure of taxpayer funds, either through putting them at risk or via outright expense, for this purpose.
This was and remains a blatantly unlawful activity.
Nor does it stop with a "mere" Constitutional violation - The Federal Reserve Act's Sections 13 and 14 do not permit Fed asset purchases except, once again, for items carrying "full faith and credit" guarantees. Credit-default swaps and trash mortgages most certainly do not meet these qualifications.
I know I've harped on this for more than two years, but here we have a raw admission of exactly what was done - and there is simply no way to construe any of it in a light that conforms with either The Constitution or black-letter statutory law.
What's worse is that Tim Geithner, head of the NY Fed at the time, was very much involved in this - that is, he in effect personally, along with Ben Bernanke, usurped the power of the United States House.
The Fed has spent two years trying to hide this from the public and Congress. It has fought off both Congressional demands for disclosure and multiple FOIA lawsuits, the latter of which has resulted in a series of adverse rulings (and, it appears, was ultimately going to force disclosure anyway.)
These actions are unacceptable but promising "never to do that again" is insufficient. In a Representative Republic where the rule of law is supposed to be paramount - that is, where we do not crown Kings and relegate everyone else to the status of knaves, unlawful actions such as this demand that strong and unmistakable sanction also be applied to all wrongdoers in addition to protection against future abuse.
In this case this means that both Geithner and Bernanke must go - for starters.
Amending The Federal Reserve Act of 1913 (as Chris Dodd has proposed to prevent future lending bailouts) is not sufficient in that The Fed did not lend in this case, it purchased, and by buying what we now know were trash loans it violated the black letter of existing law.
There is only one effective remedy for an institution that has proved that it will not abide the law: it must be stripped of all authority that has been in the past and can be in the future abused.
This means that The Fed, if we are to keep it at all, must be relegated to a body that only practices and provides monetary policy - nothing more or less - and that all monetary operations must be performed openly, transparently, and within those constraints.
We cannot have a republic where an unelected body is left free to violate The Constitution with wild abandon and those acts are then allowed to stand.
One final thought: If the individuals responsible for this blatant black-letter violation of the law do not face meaningful sanction for these acts, and neither does The Fed as an institution, can you fine folks over at The Executive, Judiciary and Legislative branches of our government please explain to us ordinary Americans why we should obey any of the laws of this land when you will not enforce the laws that already exist?
Don't hold your breath what with the crew we got running our govt at the moment.
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EXCERPT Affirmative Action Mortgages ruined the economoy. If the banks wish to prevent similar crises, the securitization mess needs rectifying. Banks must be forced to keep a minimum percentage of the mortgage loan on their books so that they are forced into due diligence so that they also share in the financial pain of default. Banks cannot be allowed to divert the entire risk of a mortgage to investors who have no access to the underlying pool of mortgages.
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Yes, the banksters messed it up. But there's a secondary problem----the secularization of the culture--- wherein moral certitudes and the Golden Rule were tossed aside in favor of self-absorbed individuality. At one time, getting a mortgage was considered a moral obligation----mortgage-holders took on the responsibility; they budgeted and had second jobs in order to pay their obligations.
CASE IN POINT A TV documentary "House of Cards" showed an illegal who could not speak English, who mowed loans for a living, getting a sub-prime mortgage for a posh California property worthy of a multi-millionaire. Of course he defaulted----the illegal had lied about his income on the mortgage application.
REFERENCE Financial Bust Connected to Illegal Alien Mortgages
Human Events | October 5, 2009 | William Campenni
FR Posted by machogirl
......the new alchemists: mortgage bankers and investors. They found a way to turn worthless mortgages into hordes of gold. Or at least they thought they had.
There were other factors that contributed to the collapse of the credit markets. Low interest rates by the Federal Reserve, lowered standards by FannieMae and FreddyMac, securitized mortgages (derivatives and collateralized debt obligations -- a real alchemic brew), the machinations of Barney Frank and Chris Dodd, the Community Reinvestment Act, Alan Greenspan, and so forth. etc. But of themselves, and even in concert, they could not have brought about a collapse of the magnitude that ensued.
So what supplied this quintessential element? It was the opportunity to exploit the sudden and coincidental housing needs of millions of illegal aliens with subprime mortgages.
The grand schemes and diabolical financial instruments would otherwise lie fallow without a huge base of mortgages to hold up the Ponzi pyramid, and the new market of the 12 -- more likely 20 -- million housing-starved illegal alien populace was the ripe, low hanging fruit. (Excerpt) Read more at humanevents.com ...
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As FReeper raybbr postulated: "the sense of entititlement to tear down our government while enjoying US prosperity, the principles of democracy, our legislative process, and our thriving society is an affront to every real American."
The subprime mortgage meltdown is attributed to illegal invaders fraudulently getting loans with stolen identities; if they could breathe and make an X, they got a mortgage, no questions asked. The conniving illegals then flipped the mortgaged houses among relatives at higher and higher prices.......the last relative absconds to Mexico with loads of cash, leaving banks (and taxpayers) holding the bag.