How the Democrats Created the Financial Crisis

[BeanCounter]

Bill,

Did you move to Washington after you served as New York attorney general? By chance did you used to be Governor and change your name after you resigned? Got any good numbers for hookers?

[cobra bill]

Ha! No, I admit it was a cut a past from the Huffington post, I can only get on during breaks, so I don't have a lot of time to post, I am an avid reader and there are times when I think it's appropriate to share!

[cobra de capell]

SUBJECT: REQUEST FOR URGENT BUSINESS RELATIONSHIP

DEAR AMERICAN:

I NEED TO ASK YOU TO SUPPORT AN URGENT SECRET BUSINESS RELATIONSHIP WITH A TRANSFER OF FUNDS OF GREAT MAGNITUDE.

I AM MINISTRY OF THE TREASURY OF THE REPUBLIC OF AMERICA. MY COUNTRY HAS HAD CRISIS THAT HAS CAUSED THE NEED FOR LARGE TRANSFER OF FUNDS OF 800 BILLION DOLLARS US. IF YOU WOULD ASSIST ME IN THIS TRANSFER, IT WOULD BE MOST PROFITABLE TO YOU.

I AM WORKING WITH MR. PHIL GRAM, LOBBYIST FOR UBS, WHO WILL BE MY REPLACEMENT AS MINISTRY OF THE TREASURY IN JANUARY. AS A SENATOR, YOU MAY KNOW HIM AS THE LEADER OF THE AMERICAN BANKING DEREGULATION MOVEMENT IN THE 1990S. THIS TRANSACTIN IS 100% SAFE.

THIS IS A MATTER OF GREAT URGENCY. WE NEED A BLANK CHECK. WE NEED THE FUNDS AS QUICKLY AS POSSIBLE. WE CANNOT DIRECTLY TRANSFER THESE FUNDS IN THE NAMES OF OUR CLOSE FRIENDS BECAUSE WE ARE CONSTANTLY UNDER SURVEILLANCE. MY FAMILY LAWYER ADVISED ME THAT I SHOULD LOOK FOR A RELIABLE AND TRUSTWORTHY PERSON WHO WILL ACT AS A NEXT OF KIN SO THE FUNDS CAN BE TRANSFERRED.

PLEASE REPLY WITH ALL OF YOUR BANK ACCOUNT, IRA AND COLLEGE FUND ACCOUNT NUMBERS AND THOSE OF YOUR CHILDREN AND GRANDCHILDREN TO WALLSTREETBAILOUT@TREASURY.GOV SO THAT WE MAY TRANSFER YOUR COMMISSION FOR THIS TRANSACTION. AFTER I RECEIVE THAT INFORMATION, I WILL RESPOND WITH DETAILED INFORMATION ABOUT SAFEGUARDS THAT WILL BE USED TO PROTECT THE FUNDS.

YOURS FAITHFULLY MINISTER OF TREASURY PAULSON

[cobra bill]

Oh that is a good one!$$$$$$$$$$

[MysteryTrain]

This thread should be titled: How the Democrats CONTRIBUTED to the financial crisis. Implying that the republicans had nothing to do with this is just as partisan and myopic as the dems refusing to pass the bill mentioned. Posts which try to imply that one party is golden and the other is crap are easy explanations for why the two party system is such a disaster. And I suppose the billions spent by Republicans and Demorcats fighting shadows in the middle east were sound, low risk investments? Please. If you expect the government as run by either party to make good financial decisions, you are hopelessly naive.

I had a few more things to pass on, but 392's avatar made me forget what I was saying. What were we talking about?

[cobra de capell]

What do Osama and Obama have in common?

They both have a friend who bombed the Pentagon.

[MysteryTrain]

I didn't know Obama and George Bush were friends.

[Roscoe]

Ahhh, you wanna splain that Lucy?

Roscoe

[J. T. Toad]

http://www.youtube.com/watch?v=H5tZc8oH--o&e

[MysteryTrain]

Roscoe,

Sure, I can splain it. Cobra de Capell said Obama and Osama were friends with someone responsible for bombing the pentagon. By saying "I didn't know Obama and Bush were friends" I made a very hilarious joke. See, the Bush family and the Bin Laden family used to be very close. So by implying that Bush and Osama are buds, I allow the reader to draw the conclusion that I'm saying that Cobra De Capell thinks Bush bombed the Pentagaon. Which obviously, he doesn't. See? I know, I know. It's less funny when you have to spell it out. But trust me, I'm freaking hilarious. Just ask me.

For those who can't master the obvious, I'll put it this way: Linking Obama to 9/11 is not less ridiculous than linking Bush to it.

[wtm442]

Originally Posted by MysteryTrain

Roscoe,

Sure, I can splain it. ......... For those who can't master the obvious, I'll put it this way: Linking Obama to 9/11 is not less ridiculous than linking Bush to it.

Yes, but there are too many nut jobs around the world that think the US gov't staged the attacks on 9/11 so we could invade various countries. Hell, they even teach that to kids in many countries in the Middle East.

The USA even staged all of the walks in space!
Its amazing what a lot of people believe.

[Ron61]

Hey, China is having their first space walk now. In fact I think it is already over. Russia is building new and larger nuclear subs and upgrading their missile fleet to newer long range stealth missiles with larger nuclear warheads. In fact they tested one of the stealth missiles a few weeks ago and our detection system didn't catch it at all. None of that is staged, and I think Russia wants to go back into the Cold War stage.

Ron

[J. T. Toad]

Originally Posted by Ron61

Hey, China is having their first space walk now.

Ron

Did you see where they posted the successful press release before the launch took place?

Dewey defeats Truman!!! LOL

it's always about the birth certificate... I AM TALKING ABOUT THE GYMNAST.

[Ron61]

Damage control before anything happens. If it fails, they don't have to say anything as everyone already knows it was a success.

Ron

[Anthony]

Originally Posted by nevermind65

No. The reason this happened is somebody came up with a great "get rich quick" ponzi scheme and milked the marked. Everybody knew what was going on, so why didn't these businesses just stop doing it? Because there are a few at the top that wanted to get rich, and now at the taxpayers expense, they are getting their dream. They ran their respective companies into the ground, then waited for the taxpayers to bail them out.

It is called capitalism and maybe we need a good depression to get rid of a lot of worthless businesses. BTW...read the article where the top 8 big shots at Lehmans got cushy multi-million dollar contracts? Nice huh?

Alot of good points, but I believe the underlying cause are the current laws/regulations in place that allow companies, CEO's, executives to get away with millions when the failure of their company cost's the general public mega-money.

It's the legislators (lawyers) that have created the current legal envrioment that has allowed businessmen to hide behind LLC's, Corp.s, etc, such that the artificial inflation of real estate, as well as stock prices, ultimately leads to a collapse and tax payer bail out, as well as let the businessmen exit with millions/billions of dollars.

It cracks me up people talking about more legislation/regulations are needed, when it is the current legislation/regulations that has allowed this situation in the beginning. But, I guess, that's the easiest solution to apply more layers of BS regulations to bandaid the underlying problem.

If the culprits are appropriately punished for gross mismanagement, i.e. all their private assets confiscated and then sold/redistributed, then there would not be too many CEO's/businessmen doing bad things, risking their own wealth/assets.

The current legal enviroment allows this type of thing, and will continue to do so unless drastic changes in the system occur, which we know never will happen.

If this was done in China, I bet some people would have been executed, or at least commited suicide.

Obviously, we all know that anybody can sue anybody for any reason. The problem is that there is no simple recourse for the victim to recover their expenses for their defense, costing them thousands/millions of dollars when they were not in the wrong. Obviously, the lawyers make out all the time, and encourage this practice as well.

What a phucked up system.

[Roscoe]

Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.

Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named "Caylee." ........Ann Coulter


September 24, 2008, 1:11 PM
JOHN LOTT ON CLINTON-ERA BEGINNINGS OF MORTGAGE CRISIS - Analysis: Reckless Mortgages Brought Financial Market to Its Knees

So what were some of the "outdated" criteria [for mortgages in the nineties]?

Credit History: Lack of credit history should not be seen as a negative factor.... In reviewing past credit problems, lenders should be willing to consider extenuating circumstances. For lower–income applicants in particular, unforeseen expenses can have a disproportionate effect on an otherwise positive credit record. In these instances, paying off past bad debts or establishing a regular repayment schedule with creditors may demonstrate a willingness and ability to resolve debts....

Down Payment and Closing Costs: Accumulating enough savings to cover the various costs associated with a mortgage loan is often a significant barrier to homeownership by lower-income applicants. Lenders may wish to allow gifts, grants, or loans from relatives, nonprofit organizations, or municipal agencies to cover part of these costs. . . .

Sources of Income: In addition to primary employment income, Fannie Mae and Freddie Mac will accept the following as valid income sources: overtime and part–time work, second jobs (including seasonal work), retirement and Social Security income, alimony, child support, Veterans Administration (VA) benefits, welfare payments, and unemployment benefits.

Accepting these new criteria was hardly voluntary. The Fed warned the banks:

"Did You Know? Failure to comply with the Equal Credit Opportunity Act or Regulation B can subject a financial institution to civil liability for actual and punitive damages in individual or class actions. Liability for punitive damages can be as much as $10,000 in individual actions and the lesser of $500,000 or 1 percent of the creditor’s net worth in class actions."

[Ron61]

Anthony,

You make some very good points. Many of these CEOs sit on boards of more than one company in addition to the ones they run into bankruptcy and take millions of dollars in bonuses with them when they leave. And more laws piled on top of ones that they won't or can't enforce isn't going to solve the problem. I agree that the top people should have everything confiscated and sold and the amount divided up among the stock holders who get left holding an empty bag. I may be wrong about this, but I think they used to have regulation of Fanny Mae and the other big loan companies and some of the politicians who undoubtedly got millions for this, decided they would do better if unregulated. Now that is not a statement of fact as I am going from memory and I may be completely wrong about it. They had warnings of what was coming several years ago and chose to ignore them, probably since they knew it wouldn't hurt them any.

Ron

[jmimac351]

Watch this...

Of course, Obama was warning about the crisis in 1897...

[Cobrabill]

Congress Tries To Fix What It Broke
By INVESTOR'S BUSINESS DAILY | Posted Wednesday, September 17, 2008 4:20 PM PT

Regulation: As the financial crisis spreads, denials on Capitol Hill grow more shrill. Blame an aloof President Bush, greedy Wall Street, risky capitalism — anybody but those in Congress who wrote the banking rules.



Such denials won't hold against the angry facts banging on their doors. The only question is whether the guilty party can keep up the barricade until Election Day.

A visibly annoyed House Speaker Nancy Pelosi rejected suggestions that Democrats share blame for the meltdown. "No," she snapped at reporters who dared ask.

Stick to our narrative, she scolded: The bursting of the housing bubble was another story of market failure and deregulation.

"The American people are not protected from the risk-taking and the greed of these financial institutions," she said, while calling for investigations of the industry.

Only, the risk-taking was her idea — and the idea of all the other Democrats, along with a handful of Republicans, who over the past 30 years have demonized lenders as racist and passed regulation after regulation pressuring them to make more loans to unqualified borrowers in the name of diversity.

They were the ones who screamed — "REDLINING!" — and sent banks scurrying for cover in low-income neighborhoods, where they have been forced to lower long-held industry standards for judging creditworthiness to make the subprime loans.

If they don't comply, they are threatened with stiff penalties under the Community Reinvestment Act, or CRA, a law that forces banks to make home loans to people with poor credit risks.

No fewer than four federal banking regulatory agencies are responsible for enforcing the law. They subject lenders to racial litmus tests and issue regular report cards, the industry's dreaded "CRA rating."

The more branches that lenders put in poor neighborhoods, and the more loans they make there, the better their rating. Those lenders with low ratings can not only be fined, but also blocked from mergers and other business transactions needed to expand.

The regulation grew to monstrous proportions during the Clinton administration, obsessed as it was with multiculturalism. Amendments to the CRA in the mid-1990s dramatically raised the amount of home loans to otherwise unqualified low-income borrowers.

The revisions also allowed for the first time the securitization of CRA-regulated loans containing subprime mortgages. The changes came as radical "housing rights" groups led by ACORN lobbied for such loans. ACORN at the time was represented by a young public-interest lawyer in Chicago by the name of Barack Obama.

HUD, in turn, pressured Fannie Mae and Freddie Mac to purchase more subprime mortgages, and Fannie and Freddie, in turn, donated to the campaigns of leading Democrats like Barney Frank and Pelosi who throttled investigations into fraud at the agencies.

Soon, investment banks such as Bear Stearns were aggressively hawking the securities as "guaranteed." Wall Street's pitch was that MBSs were as safe as Treasuries, but with a higher yield.

But they weren't safe. Everyone in the subprime business — from brokers to lenders to banks to investment houses — absolved themselves of responsibility for ensuring the high-risk loans were good.

The mortgage lenders didn't care, because they were going to sell the loans to other banks. The banks didn't care, because they were going to repackage the loans as MBSs. The investors and traders didn't care, because the MBSs were backed by Fannie and Freddie and their implicit government guarantees.

In other words, nobody up and down the line — from the branch office on main street to the high-rise on Wall Street — analyzed the risk of such ill-advised loans. But why should they? Everybody was just doing what the regulators in Washington wanted them to do.

So everybody won until everybody lost, including the minorities the government originally mandated the banks to serve.

The original culprits in all this were the social engineers who compelled banks to make the bad loans. The private sector has no business conducting social experiments on behalf of government. Its business is making profit. Period. So it did what it naturally does and turned the subprime social mandate into a lucrative industry.

Of course, it was a Ponzi scheme, because they weren't allowed to play by their rules. The government changed the rules for risk.

In order to put low-income minorities into home loans, they were ordered to suspend lending standards that had served the banking industry well for centuries. No one wants to talk about it, so they just scapegoat Wall Street. Even John McCain has joined the Democrat chorus on this.

The FBI is now investigating 24 large mortgage lenders for alleged abuses. But who will investigate the pols and the lobbyists and the community agitators who made the bad decisions that ultimately forced businesses to make their bad decisions?

[Ron61]

Bill,

No one will ever do anything about the crooked A** Hol** in Congress and Pelosi is a disgrace to the female race. All she is interested in is trying to blame everyone in the country except her and her bunch for this mess. The whole Congress should be voted out of office and replaced with some who haven't made it a lifetime career of living off the taxpayers and passing moronic legislation one bill after another. Boxer and Feinstein should also be included in my statement about Pelosi as they worship her. It is way past time that people voted against all incumbents. At least it would take a new group a few months to get the hang of screwing the taxpayers and stealing everything for themselves. Not to worry though. In another few years there won't be a Congress and some other country will be running here.

Ron