Free Republic

For those who want a smoking gun to show the genesis of the financial collapse, this short sequence from a longer video I posted this week will do it. Clinton HUD Secretary Andrew Cuomo announced a settlement of a lending discrimination complaint with Accubanc, a Texas lender whose prerequisites for mortgages came under attack from “community organizers” at the Fort Worth Human Relations Commission and the city of Dallas. I clipped out this sequence to underscore its importance: (video at link) CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have...

For John McCain and the Republicans, there’s nowhere to go but up. Cut through all of the self-congratulatory talk about how foresighted and responsible they were in voting for the $700 billion mortgage bailout and the truth is that the GOP today is staring into a political abyss. The stock market has fallen, and the remarkable political bounce that Republicans had gained with Sarah Palin’s vice-presidential nomination is gone. Obama has surged into the lead in the polls by depicting McCain as out of touch, aided by the Arizona senator’s erratic, muddled performance on the bailout. First, he temporarily suspended...

[UPDATE: If you read the Ambinder piece, you'll see that this was leaked to Marc: it's an internal document designed to make sure that the GOP's people are up to speed on this issue. - Moe Lane] This makes a good point. Congress (Republican and Democratic) attacked Enron, but nothing against the politically connected Fannie Mae. Here's a slide show, care of Marc Ambinder, that the McCain campaign is passing around:

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The Debate: John McCain rightly laid the blame for the economic crisis on Fannie and Freddie, and the blame for that on the Democrats. But he missed opportunities and left much too much on the podium.When moderator Tom Brokaw opened the Nashville debate by asking both candidates, "What's the fastest, most positive solution to bail these people out of the economic ruin?" Sen. McCain should have responded by saying the first thing we should do is not put in power those who caused the crisis in the first place. Instead McCain, at the advice of those with a political death...

Repeat a lie often enough and people will believe it. That has worked well for Obama, Biden and Pelosi in laying blame on “failed” Bush economic policies. The Fannie Mae/Freddie Mac (F & F) fiasco and the “Bail-Out” are tied directly to the Clinton Administration and Congressional Democrats. It’s laudable to make mortgages available to most people; unfortunately, too many could not afford them. Bad lending practices are at the core of this mess. Why were F & F unregulated? It was by courting politicians with lobbying budgets and political contributions. The top three U.S. senators in the F &...

Association of Community Organizations for Reform Now ACORN: The Poisonous NUT That Ended Democracy in America By Cristi Adkins Saturday, October 4, 2008 Within its shell, ACORN contains all the makings of an intriguing government political conspiracy movie: drama, injustice, organized crime, election fraud, intimidation, violence, money, lies, extortion and a presidential candidate.[1] If you are a patriotic, middle class American who spends most of your time working for your family and enjoying your FREEDOM, you have probably not been bothered by the sounds of an ACORN dropping before now. But, while you were sleeping peacefully at night, the roots...

Johan Norberg, on his blog JohanNorberg.net, points out the Democratic intervention that caused the financial crisis SOME milestones in the prehistory of the crisis. 1933: As part of the New Deal, investment banks are stopped from also acting as commercial banks (which would have given them bank deposits and more stability). 1938: As part of the New Deal, president (Franklin D.) Roosevelt creates Fannie Mae and in 1970 Congress creates Freddie Mac. With their implicit government guarantees they can offer cheaper loans and expand until they dominate the American mortgage market. 1989: The American government step(s) in and pay(s) for...

MR. RUBIN: Hi. I'm Bob Rubin, the Assistant to the President for Economic Policy, and I'm going to introduce today's topic. The President, as you know, has a broad, comprehensive strategy for dealing with the economic problems of the country for putting the country back on the right track for the long-term. A lot of the legislative and executive actions that have taken place in 1993 have been pursuant to that long-term economic strategy of the President's. An important component of that strategy is to deal with the problems of the inner city and distressed rural communities -- pursuant to...

BOSTON (AP) - Rep. Barney Frank said Monday that Republican criticism of Democrats over the nation's housing crisis is a veiled attack on the poor that's racially motivated. The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country's mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act.

2004 Video: Democrats Defend Fannie/Freddie from Regulation: "We've been through nearly a dozen hearings where frankly we were trying to fix something that wasn't broke. Mr. Chairman we do not have a crisis at Freddie Mac and in particular at Fannie Mae under the outstanding leadership of Mr. Frank Raines."-Rep. Maxine Waters, 2004http://www.youtube.com/watch?v=YL36nwCSYUMHistory of Fannie Mae scandal Associated Press, December 7, 2006 "Fannie Mae announces its long-awaited restatement, erasing $6.3 billion in profit from 2001 through June 30, 2004."http://www.boston.com/business/articles/2006/12/07/history_of_fannie_mae_scandal/?page=1_________________________________________________________ Bailout Politics: The Congressional Dems who enabled this crisis are now being trusted to fix it?Thomas Sowell, September 30, 2008http://article.nationalreview.com/?q=OWE3OWU3OTExYzNlNTUzMzY2YmJmOWZjMzcwN2M1NjU=_________________________________________________________ Guilty...

DJIA just prior to House defeat of bailout: 10843 DJIA close the day after House defeat of bailout: 10850 DJIA just prior to Senate approval of bailout: 10831 DJIA close the day after Senate approval of bailout: 10482 DJIA just prior to House approval of bailout: 10679 DJIA close the day after House approval of bailout:??? 9999 and dropping

During the last few months, some site commenters have feared (or gleefully predicted) that an all-out right wing Rove-style assault would swing public opinion against Obama in the closing weeks of the campaign. The assault has commenced. If the best the McCain campaign can muster is a rehash of accusations that the public has already assessed and rejected, there isn't much to fear. The reality of looming economic disaster leaves voters with no time or patience for the politics of distraction. Campaigns go negative because it works, but the strategy has a cost. Nate Silver analyzes the risk McCain runs...

The oil crisis and the credit crunch mark the end of one epoch and the painful but promising beginnings of another that won't come from Wall Street or Washington.

[B]oth Democratic and Republican nominees for President, self-professed agents of reform, followed the cattle call to back the bailout. Sen. Obama, who claims to be the messiah of change, sure is showing his true colors in two huge decisions – first by his appointment of politics-as-usual Joe Biden and now by his vote to pass this economic bailout bill and drive us deeper into debt. And, quite frankly, Sen. McCain is also disappointing me at this point. At the Republican Convention, John talked about bringing the power back to the people. So he chose Sarah Palin, and finally gained my...

As our financial markets totter, as homes go into foreclosure, as Wall Street executives lose millions, as Americans have more and more difficulty getting loans, can anyone be happy? Certainly. Those on the left who now, with unbounded glee, pen obituaries for the free market. One can sense their joy as they have, they think, the last laugh. Bernie Sanders, the far left senator from Vermont, was almost giddy on Larry Kudlow's TV show recently to hear free-marketer Kudlow endorse the bailout and tell Kudlow that he is glad to see he has become a socialist. The Washington Post's Harold...

“Those who cannot remember the past are condemned to repeat it.�–George Santayana What would Santayana (1863-1952) say were he with us today? Although born in Madrid, Santayana lived and taught in the United States for decades, an amused, slightly detached observer of the human panoply and its addiction to folly. Recalling the disater of the Carter years–the economic dégringolade (remember the “misery index“?), the foreign policy disasters (remember the Iran hostage crisis?), recalling above all the hang-dog, defeatist attitude of the Carter years (remember the “malaise� speech?)–Santayana would doubtless have shaken his head as so many Americans (and even more,...

If McCain Doesn't Want to Talk Fannie and Freddie, Why Is He Running? Palin is bringing up Barack Obama's long connection to William Ayers... okay. I don't doubt that not enough Americans know about Obama and his ties to Ayers, and what an unrepentant domestic terrorist and SOB Ayers is. But that message is going to come up against a media that is hostile, determined to downplay the ties and/or willing to lie. (What the heck got into CNN lately? The past few weeks, they're getting things 180 degrees flat wrong, again and again, about easily verifiable facts and the...

The Curve in the Road Necessary but Not Sufficient Why the Government Had to Step In All the King's Horses How Can I Be 59? The "Bailout Plan" was passed. Will it work? The answer depends on what your definition of "work" is. If by work you mean no more government intervention and no further costly programs and a functioning market, then the answer is no. But there are things it will do. This week I try to help you see what might lie ahead around the Curve in the Road. We look at how the rescue plan will function,...

--> The United States prides itself on being the home of free market capitalism, governed by the rule of law. However, the rapidly developing capital market crisis demonstrates once again that, faced with a systemic crisis, rules and ideology take second place to pragmatism. A similar incident happened on 15 August 1971 when Nixon arbitrarily ditched the solemn US international pledge to honour the Bretton Woods Agreements making the dollar convertible into gold at US$35 an ounce. Cynics might say that the US lives by the Gold Rule: he who has the gold makes the rules.Hence, the unprecedented developments in...

My cohort, the sainted Boomer generation, now rules this country and its institutions. The elite of this generation, graduates of the finest schools, cosmopolitan in taste and sensibility, and left-liberal in political and cultural allegiance -- have always been counted the smartest people in the room (just ask them). Now these new Masters of the Universe have made a shambles of the US and world financial system. This is, to be sure, not the construction put upon things by the main stream media, but it is plainly the case. The current market turmoil is a product of every bad trait...

If conservative Republicans are right and the $700 billion financial-sector rescue plan signals America's slide into socialism, you'd think Seth Dellinger would be celebrating. "They can reorganize capitalism in different ways, and they will," says Mr. Dellinger, a college graduate turned working-class meat cutter. "But it is above all with a view toward continuing a system in which a small minority of super-rich families controls everything." To Mr. Dellinger, 32, capitalism's crisis may be socialism's opportunity. He's making the case to anyone who will listen that the U.S. should adopt a Cuban-style government before the Bush administration and Congress empty...

A SNLIVE satirical skit of the financial crisis bailout. Pelosi, Bush and Barney Frank. VIDEO:Click Here

Germany’s HRE says rescue collapsed By James Wilson in Berlin Published: October 5 2008 10:07 | Last updated: October 5 2008 10:07 Hypo Real Estate was racing to find a way to save itself on Sunday after the German property lender revealed the collapse of a previous rescue plan. A consortium of banks that was to provide HRE with an emergency liquidity line had now declined to do so, HRE said at the weekend. The reversal threatens a dramatic escalation of the financial crisis in Germany and leaves HRE and the Berlin government scrambling to come up with an alternative...

"Digg" the blog's comments: http://digg.com/politics/Even_Angry_Liberal_Alec_Baldwin_Knows_B_Frank_Screwed_US?OTC-widget "Even Angry Liberal Alec Baldwin Knows B. Frank Screwed US"

A decision, made under pressure from Congress and investors, to steer Fannie Mae into dangerous corners of the mortgage market proved to be disastrous.

Quite "a coincidence that you're interested in this one," the salesman says. "Another lady was just in here wanting it and she ran home for her checkbook. I can't guarantee it'll still be here in half an hour." Eleven days ago, the entire government of the United States -- OK, no one invited the Supreme Court -- sat in the White House in front of the gathered cameras and played used car salesman. From Bernanke of the Fed to Paulson of the Treasury; from Harry Reid to Nancy Pelosi; from Chris Dodd to John McCain to Barack Obama to their...

Watch The Coulter Factor On Fox News from Sat, 4 Oct 2008 as Ann Coulter gives her two cents on the bailout. This transcript was automatically generated with speech-to-text technology and may not be 100% accurate. NEAL CAVUTO: [play from 0:00]" And again, Ann Coulter has, as well, she says those who are pointing the fingers at the White House, should first take a good look in the mirror, and to a Clinton era push to grant mortgages to the poor and minorities. And those comments got her in a heap of trouble. She's here to explain. Ann, explain. Good...

The rise and fall of our housing market and how did it happen? This is a very high level overview of the pertinent facts. Ok we have heard a lot of talk back and forth on what caused the problems that led to the economic meltdown this year. We have heard that it is both party's fault and that the Democrats share the blame equally with others. Additionally people want you to believe that Glass-Steagal is the main cause here. What I am going to try to do is provide the core facts of this scenario all the way back...

We have confronted the first financial panic of the “New Global Economy” – an economy spawned by the fall of the Berlin Wall; and the precedent we set will affect our prosperity, liberty and posterity for generations. Unconscionably we have rushed to misjudgment and approved a $700 billion Wall Street Bailout the American people know is intrinsically unfair to them. This truth is self-evident in how, initially, an exiting President and his Treasury Secretary incited a panic amongst our people and the world, all to compel a compliant Congress to deliver upon this demand: “Main Street must bail out Wall...

What few today remember is that one of the government's central goals in undertaking mortgage market reform was to segregate American cities by race. As the insurer of much of the national mortgage industry, the FHA fixated obsessively on fears that racial integration would harm real estate values and leave the government responsible for bailing out legions of failed loans. (snip) Wall Street Street's apologists have tried to blame the subprime crisis on the Community Reinvestment Act, Congress' tepid attempt in 1977 to atone for the FHA's sins. This argument, of course, is completely ludicrous, since the vast majority of...

Here is a novel idea coming to Southwestern Pennsylvania for Election Day: Sign up to become a “pollworker,” paid by a “non-partisan effort,” and then ensure that people who shouldn’t be allowed to vote actually will get to vote. This from “Pollworkers for Democracy,” which uses fear tactics based on the recent mortgage crisis as a hook to snag people living on the edge of financial problems: “Imagine being told you've lost the right to vote because the bank foreclosed on your home,” begins the e-mail. It goes on to say that if you lose your home and have to...

She is Black, she's young, she loves America, and she hates Obama. SHE Deserves our applauses !!

Housing prices would never have risen so high without multiple Washington mistakes. Many believe that wild greed and market failure led us into this sorry mess. According to that narrative, investors in search of higher yields bought novel securities that bundled loans made to high-risk borrowers. Banks issued these loans because they could sell them to hungry investors. It was a giant Ponzi scheme that only worked as long as housing prices were on the rise. But housing prices were the result of a speculative mania. Once the bubble burst, too many borrowers had negative equity, and the system collapsed....

Tradecraft Politicians Use Bailout to Grab More Power By Jonathan Hoenig |Jonathan Hoenig Archive |Published: October 2, 2008 There was a time I wrote extensively about promising sectors and stocks. I looked at companies' new products, analyzed earnings and tracked moving averages of securities big and small. I miss those days.In recent weeks, those fundamentals have all but ceased to matter now that politicians are pulling the economy's strings. From restricting trade, such as through the short-sale ban that was just extended, to outright seizure, as was the case with AIG (AIG: 4.02*, +0.09, +2.29%), we are witnessing the biggest...

A federal grand jury in New York is probing the accounting shenanigans at Fannie Mae and Freddie Mac. ~~snip~~ Remember the early 2000s, when companies such as WorldCom, Enron, Tyco and Xerox suddenly and spectacularly were revealed to have been cooking their books? Remember the glee expressed by Washington politicians, especially Democrats, as they watched CEOs and their underlings get perp-walked out of their buildings and into federal custody? ~~snip~~ Here's how James B. Lockhart III, head of the Federal Housing Enterprise Oversight, described the two companies back in 2006, before the meltdown occurred: "The result of (Fannie's and Freddie's)...

In the boom years the financial world, which we call Wall Street, reaped rewards to satisfy King Midas. In just one recent year, 2006, its firms paid out an astonishing $62 billion in bonuses (no, this is not a typo). The "masters of the universe" created not one bubble, but two: a housing bubble and then a credit bubble, and now that both have burst we face a growing danger of a global financial panic. Every day that passes without a remedy multiplies the risk of a complete freeze up of the financial and credit markets. This threatens a crash...

The Senate Finance Committee has published a summary of some of the additions to the Emergency Economic Stabilization Act. There are many provisions in the bill that will directly benefit millions of Americans -- what's called the "AMT patch," for instance, which will protect 20 million middle class Americans from seeing a tax increase in 2009. Or tax deductions for tuition, and for teacher expenses. Corporations will see extensions of popular tax cuts -- for research and development, or renewable energies. But there's also some other stuff. My colleague Z. Bryon Wolf points out that it bears mentioning that all...

The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story. Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex. But really, it isn't. Enough cards on this table have been turned over so that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some...

Who do I blame for this financial disaster? Let me count the villains. Start with President Bush and Treasury Secretary Hank Paulson. By their own actions, they have shown that they believe that markets have become too vulnerable under their watch. The Bushies have mishandled the $700 billion bailout at every juncture. They pulled a too-large number out of the hat, then asked Congress to write a blank check. Paulson even rejected limits on the compensation of the geniuses who bought bad mortgage paper with other people's money. No way was Congress going to go along with that scheme. Like...

<p>We were reading President Bush's budget the other day (we know, get a life), when we came across an unusual mention of our all-time favorite companies -- Fannie Mae and Freddie Mac. What we found is a tale we think taxpayers and investors should want to hear.</p>

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems. The White House released this list of attempts...

A September 11, 2003 New York Times article shows that President Bush proposed “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.” His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac. Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats.

Fannie Mae and Freddie Mac Invest in Democrats Published by Lindsay Renick Mayer on July 16, 2008 5:27 PM The federal government recently announced that it will come to the rescue of Freddie Mac and Fannie Mae, two embattled mortgage buyers that for years have pursued a lobbying strategy to get lawmakers on their side. Both companies have poured money into lobbying and campaign contributions to federal candidates, parties and committees as a general tactic, but they've also directed those contributions strategically. In the 2006 election cycle, Fannie Mae was giving 53 percent of its total $1.3 million in contributions...

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...

Reform Blocked by Party Line Vote   By Party line vote in 2005 the Democrat party blocked the much needed reform of Fannie Mae and Freddie Mac so not to interrupt the high risk loans being granted to constituents. The led us to where we are today with the prospects of a costly bailout with the same players who broke the system claiming they are ready to fix it.

http://www.wsj.com/article/SB122091796187012529.html?mod=most_emailed_day

THERE is a story about a science professor giving a public lecture on the solar system. An elderly lady interrupts to claim that, contrary to his assertions about gravity, the world travels through the universe on the back of a giant turtle. “But what supports the turtle?” retorts the professor. “You can’t trick me,” says the woman. “It’s turtles all the way down.” The American financial system has started to look as logical as “turtles all the way down” this week. Only six months ago, politicians were counting on Fannie Mae and Freddie Mac, the country’s mortgage giants, to bolster...

James A. Johnson--the man chosen by Sen. Barack Obama to lead his vice presidential search committee---served as head of the Federal National Mortgage Association, or “Fannie Mae,” from 1991 to 1998, receiving a reported $21 million in compensation upon his departure. As CEO of Fannie Mae, Johnson set a goal of buying up $1 trillion in low-income mortgage loans, a move that eventually helped trigger what would become the sub-prime mortgage crisis. >snip Fannie Mae opposed any attempt to regulate or monitor that business. In 1992, Congress considered a proposal requiring Fannie Mae and Freddie Mac to disclose their debt...

Alexander Pope’s original quote was, of course, “all’s fair in love and war,” meaning you can get away with anything in those two areas. Now, as we all know, the entire economy of the United States is threatened with collapse because of supposed “errors and outright fraud on Wall Street.” Let’s step back a bit. The crisis began with the financial collapse and federal take-over of the two “private” organizations which insured and/or bundled and marketed a major part of all home mortgages in the US. These two organizations had gone along for decades, serving the public one mortgage at...