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Greg

Peg,

This is only the harsh truth if it were the truth. But if he is incorrect, he is no different than they psychotic homeless man yelling obscenities in the street. Once again, this financial crisis falls completely on the Republicans. What we have here is:

Republican Revisonism and The Meltdown

"Almost none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. Fannie and Freddie, which wouldn't accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity."
Aaron Pressman , Bussiness Week September 26 2008

"For years, Congress failed to act and it is deeply troubling that what we are seeing is an exercise in crisis management rather than sound planning, and at great cost to taxpayers.We promise the American people that our administration will be different. We have long records of standing up to special interest"
John McCain

The right wing spin starts with a very real 2003 proposal to create a new regulatory agency to oversee Fanny and Freddy. According to the myth...the big bad Democrats would have none of it, favoring the "minorities" over sound banking practice. As the story comes to a close, Bush as Don Quixote , was the lone voice of reason in the wilderness of Democrat deregulators...warning of the financial melt down.

Sounds nice, it's total BS, but a nice story none the less.

One problem with this fantasy: The Republicans controlled the White House and both houses of Congress in 2003.

In fact their control was absolute to the point that the Republicans even threatened to employ a "nuclear option" to end filibusters to move their judicial nominees through the Senate. Yet a solution to a crisis that was so vital to the economic well being of the US...was ignored.

Why?

Follow the money to Mr De-Regulation! The proposal was defeated by an intense lobbying effort led by key Republicans now on McCain's campaign staff.

Freddie Mac hired Mark Buse as a lobbyist. Buse was a longtime confidant of Sen. John McCain, and at the time, Freddie Mac feared that the senator was too outspoken on executive pay, an issue of intense concern for the highly-compensated chiefs at Freddie. Buse is now chief of staff at McCain's Senate office. In 2003, Buse reportedly was given credit inside Freddie when McCain, as chairman of the commerce committee, declined to pursue legislation addressing Freddie Mac and Fannie Mae, another mortgage giant, saying that the panel lacked jurisdiction.

Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain press release, was formerly the director of government and industry relations for Fannie Mae. The Senate Lobbying Database says Suarez oversaw the lending giant's $47,510,000 lobbying campaign from 2003 to 2006.

According to the Senate Lobbying Database, the lobbying firm of Charlie Black, one of McCain's top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004.

The McCain campaign's vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations.Green made an additional $180,000 from Freddie Mac.

Arther B. Culvahouse Jr. the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O'Melveny & Myers LLP.

In addition, Politico reports that at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.

Campaign chairman, Rick Davis was head of the Homeownership Alliance, a lobbying association that included Fannie Mae, Freddie Mac, real estate agents, homebuilders, and non-profits. According to Politico, the organization opposed congressional attempts at regulation of Fannie and Freddie, along the lines of what John McCain is currently proposing. In his capacity of president of the group, Davis went on record in 2003 and insisted that no further reform of the lenders was necessary, in contradiction to his current boss's sentiments. "[Fannie and Freddie] are subject to an innovative and stringent risk-based capital stress test," Davis wrote. "The toughest in the financial services industry."

Must be the maverick coming out again. No, rather, the math here is simple, transparent and overtly racist.

A: Minorities = B:Subprime Loan Mess

B: Subprime Loan Mess = C:Economic Meltdown

Therefore

A: Minorities=C:Economic Meltdown

with the McCain / Republican corollary:

A: Barak Obama = B: Minorities

B: Minorities=C:Economic Meltdown

Therefore

A: Barak Obama = C:Economic Meltdown


Sources WSJ, WaPo, NYT, Business Week ,The Economist


Fannie Mae and Freddie Mac were Victims, not Culprits
Aaron Pressman , Business Week September 26 2008

There's a dangerous and misleading argument making the rounds about the causes of our current credit crisis. It's emanating from Washington where politicians are engaging in the usual blame game but this time the stakes are so high that we can't afford to fall victim to political doublespeak. In this fact-free zone, government sponsored mortgage giants Fannie Mae and Freddie Mac caused the real estate bubble and subprime meltdown. It's completely false. Fannie Mae and Freddie Mac were victims of the credit crisis, not culprits.

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That's right -- most subprime mortgages did not meet Fannie or Freddie's strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower's income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn't accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

There's a must-read study by staff members of the Federal Reserve Bank of New York analyzing the roots of the subprime crisis that came out in March. I don't think it got much attention then as the conclusions seemed uncontroversial at the time. But now that Washington politicians are trying to rewrite history, it should be mandatory reading for every American interested in knowing how we got here.

The study identifies five causes of the subprime meltdown:

-Convoluted loan products that consumers didn't understand.

-Credit ratings that didn't do a good job highlighting the risks contained in subprime-backed securities.

-Lack of incentives for institutional investors to do their own research (they just relied on the credit ratings).

-Predatory lending and borrowing (which I think means fraud perpetrated by borrowers).

-Significant errors in the models used by credit rating agencies to assess subprime-backed securities.

You'll note in the Fed's five causes that there's some culpability for lenders, borrowers, investors and credit raters. There's no blame for Freddie Mac or Fannie Mae which had little or nothing to do with the entire situation.

It's certainly fair to criticize Fannie and Freddie over real issues that contributed to their downfall. The companies had numerous accounting problems and inadequate safeguards covering their own investment portfolios. Those weaknesses came home to roost when the real estate market cratered. Fannie and Freddie purchased billions of dollars of subprime-backed securities for their own investment portfolios and got hit just like every other investor. But it's some kind of crazy, politically inspired CYA to blame for the mess we're in.

In the end it is a nice story, just very short on facts and misses the truth by a mile. But if your goal is to shift blame to the Democrats, then you would buy this. If you are looking for the truth, then you would ball it up and trash it. Sort of like what I just did.

Greg

Peg,

This is only the harsh truth if it were the truth. But if he is incorrect, he is no different than they psychotic homeless man yelling obscenities in the street. Once again, this financial crisis falls completely on the Republicans. What we have here is:

Republican Revisonism and The Meltdown

"Almost none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. Fannie and Freddie, which wouldn't accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity."
Aaron Pressman , Bussiness Week September 26 2008

"For years, Congress failed to act and it is deeply troubling that what we are seeing is an exercise in crisis management rather than sound planning, and at great cost to taxpayers.We promise the American people that our administration will be different. We have long records of standing up to special interest"
John McCain

The right wing spin starts with a very real 2003 proposal to create a new regulatory agency to oversee Fanny and Freddy. According to the myth...the big bad Democrats would have none of it, favoring the "minorities" over sound banking practice. As the story comes to a close, Bush as Don Quixote , was the lone voice of reason in the wilderness of Democrat deregulators...warning of the financial melt down.

Sounds nice, it's total BS, but a nice story none the less.

One problem with this fantasy: The Republicans controlled the White House and both houses of Congress in 2003.

In fact their control was absolute to the point that the Republicans even threatened to employ a "nuclear option" to end filibusters to move their judicial nominees through the Senate. Yet a solution to a crisis that was so vital to the economic well being of the US...was ignored.

Why?

Follow the money to Mr De-Regulation! The proposal was defeated by an intense lobbying effort led by key Republicans now on McCain's campaign staff.

Freddie Mac hired Mark Buse as a lobbyist. Buse was a longtime confidant of Sen. John McCain, and at the time, Freddie Mac feared that the senator was too outspoken on executive pay, an issue of intense concern for the highly-compensated chiefs at Freddie. Buse is now chief of staff at McCain's Senate office. In 2003, Buse reportedly was given credit inside Freddie when McCain, as chairman of the commerce committee, declined to pursue legislation addressing Freddie Mac and Fannie Mae, another mortgage giant, saying that the panel lacked jurisdiction.

Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain press release, was formerly the director of government and industry relations for Fannie Mae. The Senate Lobbying Database says Suarez oversaw the lending giant's $47,510,000 lobbying campaign from 2003 to 2006.

According to the Senate Lobbying Database, the lobbying firm of Charlie Black, one of McCain's top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004.

The McCain campaign's vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations.Green made an additional $180,000 from Freddie Mac.

Arther B. Culvahouse Jr. the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O'Melveny & Myers LLP.

In addition, Politico reports that at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.

Campaign chairman, Rick Davis was head of the Homeownership Alliance, a lobbying association that included Fannie Mae, Freddie Mac, real estate agents, homebuilders, and non-profits. According to Politico, the organization opposed congressional attempts at regulation of Fannie and Freddie, along the lines of what John McCain is currently proposing. In his capacity of president of the group, Davis went on record in 2003 and insisted that no further reform of the lenders was necessary, in contradiction to his current boss's sentiments. "[Fannie and Freddie] are subject to an innovative and stringent risk-based capital stress test," Davis wrote. "The toughest in the financial services industry."

Must be the maverick coming out again. No, rather, the math here is simple, transparent and overtly racist.

A: Minorities = B:Subprime Loan Mess

B: Subprime Loan Mess = C:Economic Meltdown

Therefore

A: Minorities=C:Economic Meltdown

with the McCain / Republican corollary:

A: Barak Obama = B: Minorities

B: Minorities=C:Economic Meltdown

Therefore

A: Barak Obama = C:Economic Meltdown


Sources WSJ, WaPo, NYT, Business Week ,The Economist


Fannie Mae and Freddie Mac were Victims, not Culprits
Aaron Pressman , Business Week September 26 2008

There's a dangerous and misleading argument making the rounds about the causes of our current credit crisis. It's emanating from Washington where politicians are engaging in the usual blame game but this time the stakes are so high that we can't afford to fall victim to political doublespeak. In this fact-free zone, government sponsored mortgage giants Fannie Mae and Freddie Mac caused the real estate bubble and subprime meltdown. It's completely false. Fannie Mae and Freddie Mac were victims of the credit crisis, not culprits.

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That's right -- most subprime mortgages did not meet Fannie or Freddie's strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower's income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn't accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

There's a must-read study by staff members of the Federal Reserve Bank of New York analyzing the roots of the subprime crisis that came out in March. I don't think it got much attention then as the conclusions seemed uncontroversial at the time. But now that Washington politicians are trying to rewrite history, it should be mandatory reading for every American interested in knowing how we got here.

The study identifies five causes of the subprime meltdown:

-Convoluted loan products that consumers didn't understand.

-Credit ratings that didn't do a good job highlighting the risks contained in subprime-backed securities.

-Lack of incentives for institutional investors to do their own research (they just relied on the credit ratings).

-Predatory lending and borrowing (which I think means fraud perpetrated by borrowers).

-Significant errors in the models used by credit rating agencies to assess subprime-backed securities.

You'll note in the Fed's five causes that there's some culpability for lenders, borrowers, investors and credit raters. There's no blame for Freddie Mac or Fannie Mae which had little or nothing to do with the entire situation.

It's certainly fair to criticize Fannie and Freddie over real issues that contributed to their downfall. The companies had numerous accounting problems and inadequate safeguards covering their own investment portfolios. Those weaknesses came home to roost when the real estate market cratered. Fannie and Freddie purchased billions of dollars of subprime-backed securities for their own investment portfolios and got hit just like every other investor. But it's some kind of crazy, politically inspired CYA to blame for the mess we're in.

In the end it is a nice story, just very short on facts and misses the truth by a mile. But if your goal is to shift blame to the Democrats, then you would buy this. If you are looking for the truth, then you would ball it up and trash it. Sort of like what I just did.

Greg

Sorry for the double post

Peg

Greg - where DO you get this stuff? First of all - McCain made his plea in 2005:

http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

Secondly - no one is "pinning all the blame" on Democrats. But, as the point of this column is, Democrats were part of the problem.

As for lending, sub-prime lending, etc. - I hate to disabuse you of this notion, but - lots of folks got these loans and lots of folks got loans which they knew they wouldn't be able to handle down the road. These people were of all races and all backgrounds.

So - don't peddle your little "the Republicans are trying to be racist" garbage here.

Greg

Greg - where DO you get this stuff?

Their called facts, easily looked up.


Secondly - no one is "pinning all the blame" on Democrats. But, as the point of this column is, Democrats were part of the problem.

Wrong, I if I am correct you posted something with Thomas Sowell placing the blame on the Democrats, Jimmy Carter, and Bill Clinton. This has been a talking points for the Republicans, one that has been debunked by the media several times.

When Republicans controlled the Congress and the White House, did Democrats stand in the way of stronger regulation of Fannie Mae and Freddie Mac?

No. As soon as Democrats took over the House, they passed comprehensive GSE reform by a bipartisan vote of 313 to 104 in May 2007. When Democrats sought to include these critical reforms in the economic stimulus at the beginning of the year, the Bush Administration balked. Democrats enacted comprehensive reform in July 2008 that was signed into law, after overcoming Republican filibusters in the Senate.

The facts are clear, every meaningful reform of housing finance has occurred under a Democratic Congress. Before this Congress, the last law enacted to reform the regulation of Fannie Mae and Freddie Mac was in 1992 - when the Democrats controlled the House and Senate.

McCain made his plea in 2005

As a matter of fact, in 2005, when the former chairman of Financial Services Committee, Republican Mike Oxley, finally pushed for responsible reform, he was opposed by the Bush Administration and some Republicans in Congress.

Oxley now the vice-chairman of NASDAQ, said recently:

"the critics have forgotten that the House passed a. reform bill in 2005 that could well have prevented the current crisis. All the handwringing and bedwetting is going on without remembering how the House stepped up on this. What did we get from the White House We got a one-finger salute."
[Financial Times, 9/9/08]

I am not peddling racist garbage I am just stating the facts. See a pattern developing here?

Fox News Blames Black People for Financial Meltdown
http://www.youtube.com/watch?v=q9O1hpeO-qQ

Mortgage Woes? Blame it on Hispanic Immigrants
www.huffingtonpost.com/david-m-abromowitz/mortgage-woes-blame-it-on_b_129659.html

Michele Malkin has stepped forward to set the record straight: "illegal immigration, crime-enabling banks, and open-borders Bush policies fueled the mortgage crisis."

Malkin first cites that recently nearly half of home mortgage loans to Hispanics were subprime loans. She also tosses out an unrelated statistic that one-quarter of subprime loans are in default (the figure is actually about 19 percent). But do these two statistics connect to lay blame on illegal immigrants -- and in her mind, are all Hispanics undocumented workers?

Ann Coulter Blames Financial Crisis on Minorities
www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003855497


Michelle Bachmann Blames President Clinton, ‘Blacks,’ And ‘Other Minorities’ For Current Financial Crisis
www.thinkprogress.org/2008/09/26/bachmann-ellison-economy/

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