Skip to comments.Fannie and Freddie Bailout May Cost One Trillion Dollars
Posted on 01/07/2011 11:24:30 AM PST by yoe
The Republicans are back in charge in the House of Representatives this week, and not a moment too soon!
Forget "stimulus" bills and "shovel-ready" bailouts (for public school teachers, who need shovels for what they're teaching), the current financial crisis, which is the second Great Depression, was created slowly and methodically by Democrat hacks running Fannie Mae and Freddie Mac over the past 18 years.
As even Obama's treasury secretary admitted in congressional hearings, "Fannie and Freddie were a core part of what went wrong in our system." And if it's something Tim Geithner noticed, it's probably something that's fairly obvious.
Goo-goo liberals with federal titles pressured banks into making absurd loans to high-risk borrowers -- demanding, for example, that the banks accept unemployment benefits as collateral. Then Fannie repackaged the bad loans as "prime mortgages" and sold them to banks, thus poisoning the entire financial market with hidden bad loans.
Believe it or not, the loans went belly up, banks went under, and the Democrats used taxpayer money to bail out their friends on Wall Street.
So far, Fannie and Freddie's default on loans that should never have been made has cost the taxpayer tens of billions of dollars. Some estimates say the final cost to the taxpayer will be more than $1 trillion. To put that number in perspective, for a trillion dollars, President Obama could pass another stupid, useless stimulus package that doesn't create a single real job.
Come on Republicans and few Democrats that see this.....get to work and do what is right.....like 'you' said 'you' would!
Thank you Barney Fwank and Chris Dodd for your stellar leadership.
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Adding to the existing bailout tab of $3.7 Trillion...
Women and minorities hid hardest.
If we get lucky, we can sucker the chicoms into buying a mountain of shiny new bonds backed by nothing.
We need to get ready for the VAT fight, which will pop up faster than a lightening strike and be a done deal before it is publicly mentioned.
Some things are inevitable.
REFERENCE---MICHELE MALKIN Fannie Mae serves as an industrial-sized Dem patronage factory -- sharing profits with political allies, spreading taxpayer funds to voting blocs----like ethnic groups-----and doling out jobs to left-wing academics, Washington has-beens and back-scratching buddies. Obama insider Fannie Mae exec Jim Johnson got sweetheart loans from shady sub-prime Countrywide. Pols raked in six-figure salaries as F/F engaged in Enron-style accounting, plunged into debt, and helped usher in the sub-prime housing meltdown through cockamamie lending practices.
Bill Clinton appointed Franklin Raines, Daley and Rahm Emanuel just as the quasi-governmental F/M engaged in rampant book-cooking so that F/M insider could help themselves to massive bonuses. The Chi/Tribune exposed how Emanuel's "profitable stint" was low-show w/ no woek involved. Emanuel was not even assigned to committees, according to company proxy statements.
Immediately upon joining the board, Emanuel and other insiders qualified for $380,000 in stock and options plus a $20,000 annual fee, public records indicate. W/ Wall Street Emanuel there, accounting tricks were used to mislead shareholders about outsize profits F/M reaped from risky investments. The goal was to cook the books to keep fraudulent earnings on the books, to make Freddie Mac look profitable on paper-----AND to fraudulently obtain humongous annual bonuses for political insiders.
The Government filed suit against F/M head Franklin Raines when the depth of the F/M accounting scandal became clear. READ IT HERE http://housingdoom.com/2006/12/18/fannie-charges/
The Government noted, "The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner."
These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the misstated Fannie Mae profits. (Soon going to trial.)
So which politicians get Fannie and Freddie political contributions. The top three U.S. Senators getting big Fannie and Freddie political bucks were Democrats and number two was then-Senator Barack Obama. who had only been in the Senate four years but still managed to grab the number two spot ahead of John Kerry, decades in the senate, and Chris Dodd then-chairman of the powerful Senate Banking Committee.
Fannie and Freddie were creations of the Congressional Democrats and the Clinton White House, designed to make mortgages available to more people, and as it turned out, some people who couldnt afford them.
Fannie and Freddie have also been places for big Washington democrats to go to work in the semi-private sector and pocket millions.
The Clinton Administrations White House budget director Franklin Raines was appointed by Clinton to run Fannie........ and collected $50 million dollars. Jamie Gurilli Gorelick (now BP's attorney), Clinton Justice Apartment Official, worked for Fannie and took home $26 million dollars.
Big Democrat Jim Johnson, recently on Obamas VP search committee hauled in millions from his Fannie Mae CEO job. Now remember, Obamas ads and stump speeches attacked McCain and Republican policies for the financial turmoil. It is demonstrably not Republican policy and worse, it appears the man attacking McCain, Senator Obama, was at the head of the line when the piggys lined up at the Fannie and Freddie trough for campaign bucks...." - FoxNews, Sept. 2008
McCain spoke forcefully on May 25, 2006, on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005: "Mr. President, this week Fannie Maes regulator reported that the companys quarterly reports of profit growth over the past few years were illusions deliberately and systematically created by the companys senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversights report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives.
In the case of Franklin Raines, Fannie Maes former chief executive officer, OFHEOs report shows that over half of Mr. Raines compensation for the 6 years through 2003 was directly tied to meeting earnings targets.
The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulators examination of the companys accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform."
Franklin Raines, left, Clinton's appointee to F/M, looted and pillaged Fannie Mae. Raines famously bought into the climate control scam w/ F/M funds. Now he's hooked up with Ohaha's Chicago mob who organized the Chicago Climate Exchange.
REFERENCE Ex-Fannie CEO Franklin Raines should be behind bars for life. He is a crook of the first order. This thief Raines cooked the FM books precipitating losses of $9B (that we know of) for the single purpose of creating bonuses for himself and other F/M insiders. The SEC said Raines broke accounting rules by playing with risky derivatives.
RAINES COOKS THE F/M BOOKS---WALKS AWAY A MULTI-MILLIONAIRE After Raines was fired and exposed as a fraudster for cooking the govt books, Raines walked away w/ $90 million dollars, a $26 million parachute,
PLUS..... Raines gets a MONTHLY pension of $116,300 for life. Raines had already collected $4.87 million in special performance shares. Raines owns options giving him $5.8 million in net profit after redemptions, plus another $8.7 million in deferred compensation for six years at the F/M helm.
Raines keeps $5 million of paid-up life insurance. He and his spouse get free medical and dental benefits for life, worth over $1 million. Raines earned $20 million in salary, bonuses and stock awards (that we know of) in one year.
After he was fired, Raines told the F/M board that he's entitled to get paychecks until June 22 giving him another $600,000, which triggers a $2,000 monthly raise in his lifetime pension. He also said he's entitled to disputed options with a gross value of about $5.6 million. To keep Raines happy within philanthropic circles, Fannie Mae will match Raines' charitable contributions by $10,000 a year.
OBAMA COVERUP Freddie Mac records exempt from FOIA
Sunlight Foundation | 03/26/2009 | Bill Allison
FR Posted 03/27/2009 by BuckeyeTexan
Bob Secter and Andrew Zajac of the Chicago Tribune report that, while researching what went at Freddie Mac during the period White House Chief of Staff Rahm Emanuel served on the government-sponsored enterprises board of directors, they were unable to get minutes of board meetings and other information.
The Obama administration rejected a Tribune request under the Freedom of Information Act to review Freddie Mac board minutes and correspondence during Emanuels time as a director. The documents, obtained by Falcon for his investigation, were commercial information exempt from disclosure, according to a lawyer for the Federal Housing Finance Agency. Freddie Mac executives cooked the books, mismanaged the firm, and ultimately drove it into the ground, costing taxpayers billions of dollars. The commercial information exemption is reserved for private companiesFreddie Mac is by no means a private company anymore.
TWO-FACED OBAMA Obama "said" in the FOIA memo, The Government should not keep information confidential merely because public officials might be embarrassed by disclosure, because errors and failures might be revealed, or because of speculative or abstract fears.
Obama added later that In responding to requests under the FOIA, executive branch agencies (agencies) should act promptly and in a spirit of cooperation, recognizing that such agencies are servants of the public.
Elected Republicans, as a rule, are too stupid to understand the inner workings of the financial markets and how the greatest fraud of all time was pushed onto the taxpayer’s balance sheet via Fannie, Freddie and now the FHA.
They don’t even know the correct questions to ask.
Thank you Barney Fwank and Chris Dodd for your stellar leadership.”
Don’t leave out Jimmah Carter & his originating the CRA in the first place.
Then add a dash of Bill Clinton, Janet Reno & Henry Cisneros, who fed the whole program serious steroids.
All of them need to be tried for treason, IMO.
In every economic downturn mortgage loans get hit. Go back into the panics of the 1800's and look at the bank failures caused by mortgage loans.
The real culprit here is not mortgages causing bank failures but the cause of the economic downturn. That had more to do with:
I just hope we now see what happens when social conservatism is removed from conservative principles.
I) between 2001 and 2008 we had a Republican administration which had power over the all the offending institutions and the Justice Department, i.e., the capability to act until Congress stops it at least;
II) The so-called “social agenda” was forced on Americans by administrations going back to Carter, but continued merrily along under the most recent Republican administration and was not only tolerated by the administration, but actually allowed to Expand; the conflict of principles was never even significantly brought into public debate by that administration prior to the debacle and the administration should have had a barrage of public relations aimed at shutting down the obsolete offending agencies rather than allowing them to expand;
III) Said expansion was largely administrative, not legislative, i.e., the supposed conservative administration was just as misguided as Congress and the administration should have done all that it could to stop the activities whereby wall street and the Federal government colluded to spread the risk of their mistake all over the world; This should have been stopped during the first term and the low-interest rates to perk up the economy should have been stopped which would have made the housing bubble much smaller.
That most recent Republican administration kept us safe and I think that most have a tremendous respect for them in that regard. But, like most administrations, they did not understand business, they thought that what is referred to as “Wall Street” represents the business community, where it only represents one angle of a business faction and is so closely allied with politicians that it has the political independence of a local zoning board. And they didn’t understand that the conservative principle of self-reliance and avoiding the poison of any government giveaway is not just a theoretical ideal, but a practical rule which must be followed to avoid eventual real government bankruptcy and societal dysfunction.
That is what happens when social conservativism and private enterprise are excluded from a conservative administration.
Since elimination of Federal programs and agencies presents tons of election fodder for the left, the principled conservative politician must always crash headlong into doing what’s right and never once think of political expediency, effectively being a one-termer in every office they hold. Just as important, they need to set about the business of creating their own election fodder, tirelessly saturating the electorate with a barrage of their own principles and goals; if not enough people understand the right action, people need to be enlightened to the truth at the grassroots level, and there is no escaping that. Instead of just giving in to what is politically correct at the drop of a hat, putting in all the hard work of “convince and convey” to the grassroots is an investment of effort worth it’s weight in gold. A wise leader can be hated by their constituents; however, once people understand what the politician is doing and why it’s right, we’ve got a chance to succeed.
The next administration needs a President with two primary goals: 1) building up our military capabilities exponentially in a very cost-effect manner by continuing to expand the use of free market principles and 2) downsizing, even deconstructing much of the executive branch, lopping off most of the agencies. Most have become obsolete and should be left to free market solutions.
Even if America suddenly gets conservative and has a moderate reduction in economic problems, without a massive, systemic overhaul and reduction, we have various world powers rising in power just enough to create a boldness that would end Pax Americana and give way to a warlord-like world geo-political structure.
Our conservative politicians have to make the changes necessary and our grassroots conservatives have to create the political momentum.
“Obama Sued Citibank Under CRA to Force it to Make Bad Loans UPDATED”
Posted by iusbvision on September 30, 2008
they will never be bailed out because they are slush