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Old 03-07-2009, 01:03 PM   #1 (permalink)
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Freddie chief resigns.

Government-run mortgage giant Freddie Mac, whose politically caused losses helped trigger today's financial depression, was ordered this week to oversee a vast new mortgage modification program and work with the same questionable borrowers whose defaults crashed the economy.

Furthermore, federal control over Freddie and Fannie Mae will continue until the entities can repay the $200 billion lent to them. This is estimated to take approximately 100 years, or never, whichever comes later.

Chafing under such intrusive restrictions, Freddie Mac CEO David Moffett is resigning after only six months on the job. Low pay, second-guessing, and Obama administration officials intent on making politically motivated loans were apparently contributing factors.

As for the banking industry as a whole, the Federal Deposit Insurance Corp. (FDIC) is quickly running out of money because of all the banks it has helped.

Sen. Chris Dodd (D-CT), the Senate Banking Committee Chairman who is largely responsible for the mess, is now offering up to $500 billion in temporary loans from the Treasury Department for the FDIC.

AIG bailout, take four

The central government's never-ending bailout debacle of AIG reminds us of Ronald Reagan's apt comparison of big government to a baby's alimentary canal -- both having an insatiable appetite for taxpayer funds at one end and no sense of responsibility at the other.

After three "bailouts" for AIG since September totaling nearly $180 billion in squandered taxpayer funding, all the taxpayers have to show for their purchase is a company locked in a death spiral.

So, naturally, the Federal Reserve is throwing more money at the problem. Now that the government owns 78 percent of AIG, there is no end in sight for the ever-declining insurer.

On Monday, AIG reported a $61.7 billion fourth-quarter loss, all of which was incurred under the new federalized stewardship.

Left unexplained in this unprecedented federal takeover is a meaningful financial justification for the bailout scheme.

As a heavily state-regulated insurer, the company maintained adequate financial reserves for claims, while state guarantee funds exist to resolve any losses arising from inadequate reserves.

Instead, the public is given vague explanations suggesting it was necessary, that neither the government nor AIG need explain where the public's money went, and that the company's board of directors has not approved any of the government's interventions.
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Old 03-07-2009, 01:45 PM   #2 (permalink)
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and there are people who think the government can run the healthcare system.
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Old 03-07-2009, 04:59 PM   #3 (permalink)
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why do you think that BHO is haveing such a hard time filling all his "support" positions.....no one wants to go down with them
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Old 03-08-2009, 03:09 AM   #4 (permalink)
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why do you think that BHO is haveing such a hard time filling all his "support" positions.....no one wants to go down with them


People overestimated him and he woefully underdelivers-time and time again.

No wonder he picked Geithner, the fed yes man.

"Cloward-Piven Strategy,"

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Old 03-08-2009, 03:27 AM   #5 (permalink)
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Sorry about the double post.

Last edited by gsvol; 03-16-2009 at 01:59 PM..
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Old 03-15-2009, 03:36 PM   #6 (permalink)
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Government-run mortgage giant Freddie Mac, whose politically caused losses helped trigger today's financial depression, was ordered this week to oversee a vast new mortgage modification program and work with the same questionable borrowers whose defaults crashed the economy.

Furthermore, federal control over Freddie and Fannie Mae will continue until the entities can repay the $200 billion lent to them. This is estimated to take approximately 100 years, or never, whichever comes later.

Chafing under such intrusive restrictions, Freddie Mac CEO David Moffett is resigning after only six months on the job. Low pay, second-guessing, and Obama administration officials intent on making politically motivated loans were apparently contributing factors.

As for the banking industry as a whole, the Federal Deposit Insurance Corp. (FDIC) is quickly running out of money because of all the banks it has helped.

Sen. Chris Dodd (D-CT), the Senate Banking Committee Chairman who is largely responsible for the mess, is now offering up to $500 billion in temporary loans from the Treasury Department for the FDIC.

AIG bailout, take four

The central government's never-ending bailout debacle of AIG reminds us of Ronald Reagan's apt comparison of big government to a baby's alimentary canal -- both having an insatiable appetite for taxpayer funds at one end and no sense of responsibility at the other.

After three "bailouts" for AIG since September totaling nearly $180 billion in squandered taxpayer funding, all the taxpayers have to show for their purchase is a company locked in a death spiral.

So, naturally, the Federal Reserve is throwing more money at the problem. Now that the government owns 78 percent of AIG, there is no end in sight for the ever-declining insurer.

On Monday, AIG reported a $61.7 billion fourth-quarter loss, all of which was incurred under the new federalized stewardship.

Left unexplained in this unprecedented federal takeover is a meaningful financial justification for the bailout scheme.

As a heavily state-regulated insurer, the company maintained adequate financial reserves for claims, while state guarantee funds exist to resolve any losses arising from inadequate reserves.

Instead, the public is given vague explanations suggesting it was necessary, that neither the government nor AIG need explain where the public's money went, and that the company's board of directors has not approved any of the government's interventions.
Misleading article and oversimplification to support views. Who wrote this?
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Old 03-15-2009, 05:19 PM   #7 (permalink)
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Misleading article and oversimplification to support views. Who wrote this?
What is misleading about it???

Sorry about not providing a link.

Here is a link to another similar article.

Obama certainly has a credibility problem.
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Old 03-15-2009, 05:41 PM   #8 (permalink)
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What is misleading about it???

Sorry about not providing a link.

Here is a link to another similar article.

Obama certainly has a credibility problem.
To point out some high level details that are being used to mislead:

1) The $200B is the life line set up once the GSE's became a conservatorship. To date, Freddie has used $13.5B of this money and Fannie has used $0. Compare that too the TARP money given to Citi, BOA, etc.

2) The quote about defaulting mortgages causing the crisis implies that it's the GSE securitized loans that have a high default rate. Completely wrong, the private label securities (PLS) are extraordinarily worse performing. Only in roughly 2006 did the GSE enter the Alt-A arena --- that's literally moments before collapse and certainly not the reason.

I'm firmly convinced that the GSE's are the scapegoat for this financial debacle in many people's eyes. That's not to say they didn't have serious problems (the fact they were allowed to buy PLS is beyond me), but in no way are they the reason nor did they underwrite even clsoe to the worst loans -- that was entirely the private market.
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Old 03-16-2009, 11:34 AM   #9 (permalink)
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To point out some high level details that are being used to mislead:

1) The $200B is the life line set up once the GSE's became a conservatorship. To date, Freddie has used $13.5B of this money and Fannie has used $0. Compare that too the TARP money given to Citi, BOA, etc.

2) The quote about defaulting mortgages causing the crisis implies that it's the GSE securitized loans that have a high default rate. Completely wrong, the private label securities (PLS) are extraordinarily worse performing. Only in roughly 2006 did the GSE enter the Alt-A arena --- that's literally moments before collapse and certainly not the reason.

I'm firmly convinced that the GSE's are the scapegoat for this financial debacle in many people's eyes. That's not to say they didn't have serious problems (the fact they were allowed to buy PLS is beyond me), but in no way are they the reason nor did they underwrite even clsoe to the worst loans -- that was entirely the private market.
Thirty years of bad loans has to show up somewhere.
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Old 03-16-2009, 12:44 PM   #10 (permalink)
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Thirty years of bad loans has to show up somewhere.
I don't even know what this means.
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Old 03-16-2009, 01:36 PM   #11 (permalink)
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I don't even know what this means.
the Community Reinvestment Act has been forcing banks to make loans to folks who otherwise wouldn't qualify for 30 years.
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Old 03-16-2009, 02:23 PM   #12 (permalink)
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the Community Reinvestment Act has been forcing banks to make loans to folks who otherwise wouldn't qualify for 30 years.
I didn't know Freddie Mac went all the way back to the Roosevelt administration.

LBJ's "great society" enlarged the operation and then Jimmy Carter overloaded the system.

Recently groups like Acorn and La Raza have abused the programs for political purposes.

One of the worst examples was a La Raza promoted loan to an illegal alien of $800,000 and he only made $14,000 annually.

Acorn has used the worst sort of intimidation imaginable to coerce bankers into making bad loans.
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Old 03-16-2009, 03:13 PM   #13 (permalink)
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I didn't know Freddie Mac went all the way back to the Roosevelt administration.
The CRA was introduced during the Carter Administration, which is where I thought you got your 30 years from.

Community Reinvestment Act - Wikipedia, the free encyclopedia
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Old 03-16-2009, 05:01 PM   #14 (permalink)
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The CRA was introduced during the Carter Administration, which is where I thought you got your 30 years from.

Community Reinvestment Act - Wikipedia, the free encyclopedia
Yep, I was referring to the CRA.

I just mentioned though, that I only recently learned that Freddie Mac went all the way back to Roosevelt.

I had been wondering though when the government had first gotten into the loan business.

My only experience in dealing with the guvmint in that respect was when I bought my first home and wasted a lot of time checking out the GI Bill.

If I used the GI Bill garauntee for my loan, I had to pay 4% more, I didn't need that kind of help.
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Old 03-17-2009, 03:09 PM   #15 (permalink)
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the Community Reinvestment Act has been forcing banks to make loans to folks who otherwise wouldn't qualify for 30 years.
I thought VBB might pick up on that, here is some further scrutiny on how the Democrats trashed the American economy that led us to our present 'crisis.'

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On November 12, 1999, President Clinton repealed the Glass-Steagall Act, which for 55 years had prevented banks, the nation's lenders, to get into the so-called "investment banking" business (stock brokers).

Also in 1999, Clinton appointed Franklin Delano Raines, a Harvard Law School graduate and his Director of the U.S. Office of Management and Budget (OMB), to become the CEO of the obscure but powerful Fannie Mae giant GSE (Government Sponsored Enterprise), which had been "privatized" and listed on the New York Stock Exchange.

Mr. Raines immediately went to work lobbying Congress for less regulation and more "flexibility" in creating the massive dodgy-loan portfolio of under-qualified home loans to fellow minorities which would continue to grow and was encouraged by Barney Frank, another former Democrat & Harvard Law School graduate who now heads up the House Financial Services Committee -- which has key oversight over both Fannie Mae and Freddy Mac.

On December 21, 2004, Raines accepted what he described as "early retirement" from his position as Fannie Mae's CEO while U.S. Securities and Exchange Commission investigators continued to investigate alleged accounting irregularities.

Then, in 2006, the OFHEO filed suit against Raines in order to recover the $50 million in personal payments made to Raines based on Fannie Mae's overstated earnings which were initially stated to be $9 billion but have since been reduced to under $6.3 billion.

Undeterred, Mr. Raines now works for another Harvard Law School graduate, Mr. Barack Obama's presidential election campaign -- as an advisor on mortgage and housing policy matters.

By the end of the '90s, no less than nine separate, independent, and uncoordinated Federal Regulators had been created by Congress. These agencies included the SEC, CRTC, Controller of the Currency, Treasury, FRB and OFHEO, among others.

They would poorly supervise what Clinton had now given birth to: a jungle of speculators, favor-seeking financial lobbyists, and Democrat-dominated Wall Street organizations who duly poured millions of dollars of contributions into Democrat coffers for the Congressional and Presidential elections.


In 1998, Senator Chuck Schumer of New York was elected. He now serves on both the Finance, and the Banking, Housing & Urban Affairs Committees, and is the Chairman of the powerful Housing, Transportation and Community Development Sub-committee. He also graduated from Harvard Law School.

After the sub-prime mortgage industry began its meltdown in March 2007, Schumer proposed a bailout by the Federal Government of sub-prime borrowers -- ostensively to prevent these poor-credit owners from losing their homes. Financial commentators immediately observed that such a "bailout" would primarily benefit Wall Street bankers and other lenders -- who had made large campaign contributions to congressmen. (Schumer's
nine biggest campaign donors are financial institutions -- who had contributed over $2.5 million to his re-election campaign.)

As the recent Indy-Bank collapse occurred, CNBC financial analyst Jerry Bowyer said that "Schumer was responsible for the second largest bank failure in US history."

So the pattern becomes clear. Harvard Law School attorneys -- noted for their lack of economic knowledge -- create an easy-money system which relies on flakey loans provided by fat-cat financial manipulators who are the primary contributors to the re-election campaigns of the legislators -- almost exclusively Democrats.
Now everyone should know why Wall Street donated $7 to the Obama campaign for every dollar it donated to the McCain campaign.

I think even a young liberal could understand this, given these facts.
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