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A great video that places the blame where it belongs.
On banks who in the 80's departed from traditional loan practices by setting up and insuring (quote)autonimus(unquote) commercial paper conduits to sell off bundled loans in order to remove those loans from the banks balance sheet allowing them to make even more loans then the traditional banking practices and the SEC would have normally allowed?
And the underwriters who valuated those bundled loans before the conduits used them as collateral in the money market?
I can't watch the video from work, which is why Im asking?
The wikipedia page shown in the video itself indicates that there is not a consensus on the effects of CRA.
I think Hank Paulson said that there was a lot of blame to go around and I think he was correct. Government, regulators, banks, individual borrowers must all share some of the responsibility.
The wikipedia page shown in the video itself indicates that there is not a consensus on the effects of CRA.
I think Hank Paulson said that there was a lot of blame to go around and I think he was correct. Government, regulators, banks, individual borrowers must all share some of the responsibility.
Of course there is no concensus, because the democrat pretty much all disagree. They have a vested interests... or should I say, and electorial interest in keeping the CRA as lax as possible.
Let's look at Barney Frank's words from the 9-11-2003 NYT article cited from in other threads...
Quote:
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
They caused it by advocating less regulation of Freddie Mac and Fannie Mae
Watch this video and hear Bill Clinton, and Maxine Waters and Barney Frank in committee meetings, attack the regulators and greater oversight of those two organizations.
If you think you can find similar words coming from republicans... try to find them... if there were, you know that democrats would be using them in commercials by now.
Come on, this is way beyond the worst of what was alleged happened between republicans and Enron. There the connections were tenuous and implied. Here the connections between campaign contributions and key members of congress is solid and explicit.
In the 2006 election cycle, Fannie Mae was giving 53 percent of its total $1.3 million in contributions to Republicans, who controlled Congress at that time. This cycle, with Democrats in control, they've reversed course, giving the party 56 percent of their total $1.1 million in contributions. Similarly, Freddie Mac has given 53 percent of its $555,700 in contributions to Democrats this cycle, compared to the 44 percent it gave during 2006.
Looks like both parties recieved monies - and when the Republicans were in control they got the lions share.
In light of this I find myself not quite understanding the allegations being brought forth towards Democrats in particular. These figures are from YOUR article Dwayne. Facts, not spin.
In addition, one of the people leaving a comment in the link had a link to another interesting article.
By JACKIE CALMES Published: September 9, 2008 WASHINGTON — Senators Barack Obama and John McCain each cite the mess at Fannie Mae and Freddie Mac as a consequence of the corrosive coziness of lobbyists and politicians that they promise to end. But each man and his party also have ties to the fallen giants that will complicate the next president’s job of reshaping the mortgage finance companies that have been essential to the economy.
The Republican nominee, Mr. McCain of Arizona, has numerous close relationships with and contributions from current and former company lobbyists.
Mr. Obama, his Democratic rival from Illinois, is second among members of Congress in donations from the firms’ employees and political action committees.
Beyond the antilobbyist message, Mr. Obama also indicts the Bush administration and the Republicans who controlled Congress for a dozen years until 2007, including Mr. McCain.
He blames them for lax regulation that freed the companies to go deep into debt to buy the mortgages that crushed them as the housing crisis persisted. Yet his fellow Democrats in Congress have been well known as enablers of the two companies for years, protecting the firms’ dueling responsibilities to support affordable housing as well as to maximize shareholder profits.
For all their outrage now, neither Mr. Obama, with less than four years in the Senate, and Mr. McCain, after a quarter-century in the House and Senate, has a record of directly challenging the companies. Mr. Obama did warn publicly of a coming housing crisis in March 2007, five months before it erupted and the government first took action.
Several former company executives, as well as current and former Senate Republican staff members, said Mr. McCain seemed to avoid matters related to the financial industry after the last major financial crisis — the savings and loan crisis of the late 1980s. He was one of the “Keating Five” senators investigated by the Senate, accused of interceding with federal regulators for the operator of a failing thrift. Mr. McCain received a rebuke.
More than Mr. Obama, Mr. McCain’s circle of advisers and contributors includes current and former lobbyists or directors for the companies, although since July he has called for a ban on any lobbying by the two firms.
Among the companies’ past advocates are Mr. McCain’s campaign manager, Rick Davis, a longtime lobbyist; Mr. McCain’s confidant and adviser Charlie Black, whose firm worked for Freddie Mac for several years ending in 2005, and the deputy campaign finance chairman, Wayne L. Berman, a vice president for Ogilvy Worldwide and a former Fannie Mae lobbyist.
Mr. Davis previously was head of the Homeownership Alliance, a coalition of banks and housing industry interests led by Fannie and Freddie to stave off regulations.
The group was formed to counter another organization, FM Watch, an alliance of financial institutions and lobbying associations that wanted to even the playing field against Fannie Mae and Freddie Mac, by challenging the implicit government guarantee that allowed the two firms to borrow funds at lower interest rates.
Six members of the Republican lobbying firm Fierce Isakowitz & Blalock, all Fannie Mae lobbyists, have given Mr. McCain $13,250, records show.
The New York investor Geoffrey T. Boisi, a member of Freddie Mac’s board, contributed more than $70,000 to Mr. McCain and Republican Party committees working for his election. Both he and Richard F. Hohlt, a Fannie Mae lobbyist, are among the McCain “bundlers” who have raised $100,000 to $250,000 from others, according to the campaign Web site.
Both candidates’ vetters for their vice presidential picks have links to Fannie. The former chairman, James Johnson, initially led Mr. Obama’s search committee, but stepped aside after a controversy over favorable loan terms he received from another firm. Mr. McCain’s vetter, Arthur B. Culvahouse Jr., was a past Fannie lobbyist.
Mr. Obama’s contributors include the Freddie Mac senior vice president Robert Y. Tsien and the directors William M. Lewis Jr., a banker at Lazard, and the Chicago businesswoman Brenda J. Gaines. He does not accept contributions from lobbyists, but Mr. Obama has been a favorite of Fannie Mae employees and their political action committee, according to an analysis by the nonpartisan Center for Responsive Politics.
He was second only to the Senate Banking Committee chairman, Christopher J. Dodd, the Connecticut Democrat, in contributions from the two firms’ employees and PACs since 1998, the analysis found, even though Mr. Obama has been in the Senate only since 2005. While the two firms have long been careful to hire from and contribute to both parties, generally Fannie Mae has favored Democrats and Freddie Mac the Republicans.
The center said he received $122,850, of which $101,150 was from Fannie Mae.
Until now, the companies were among the capital’s lobbying powerhouses — hiring former members of Congress, administration officials and top staff members as in-house lobbyists, contracting with outside lobbying firms, and sprinkling development projects and charitable contributions among Congressional districts.
With the Treasury’s action over the weekend putting Fannie and Freddie in government conservatorships, the issue of what went wrong and how to fix them has intruded into the presidential campaign.
Mr. McCain wants to see the companies carved up and privatized, as commercial lenders have long sought. Phil Gramm, Mr. McCain’s friend and longtime adviser, also took that position when he was the Senate Banking Committee chairman in the late 1990s to 2003.
Mr. Obama’s comments signal a preference for the sort of public-private hybrid that Fannie and Freddie were, but with tighter controls. The firms, until now, were shareholder-owned and highly profitable, but chartered by the government and backed by an implicit government guarantee that is now explicit.
Both senators issued statements supporting Treasury’s seizure. And both increased the populist rhetoric in their competition to be seen as an agent of change.
Mr. McCain attributed the companies’ troubles to “cronyism, special interest lobbyists and executives making millions of dollars a year while things were going downhill.”
Mr. Obama, in Ohio on Tuesday, said he would oppose any golden parachutes for the companies’ ousted executives. “Any action with respect to Fannie Mae and Freddie Mac needs to put taxpayers first and can’t under any circumstances bail out shareholders or senior management of those companies,” he said.
He sent a letter late Monday to Treasury Secretary Henry M. Paulson Jr. and James B. Lockhart, the companies’ conservator, seeking clarification that the bailout would not provide “a windfall” to ousted executives.
My viewpoint? There is more then enough blame to spread around here. Neither political party is innocent. Any individuals in government who had a hand in this should be prosecuted regardless of party affiliation. And if that goes up to the Presidental candidates then you guys are in a heap of trouble.
Democrats pushed the CRA in 1977. The Clinton, a democrat, changed the CRA in 1993, so that even more sub-prime loans would be issued by banks. Then later in the decade, Clinton then strong armed Freddie Mac and Fannie Mae into purchasing more of these sub-prime loans. Others warned against this, including John McCain, but those people who gave warnings were ignored and/or vilified.
There is an evidentiary chain that can be followed backwards, and to follow it backwards, you first gotta ask, why did Freddie Mac and Fannie Mae fail?
Easy enough, these two organizations had two many of the mortgages it was backing, go into default. There are some other minor factors, but the main thing was bad loans.
Now, why did Freddie Mac and Fannie Mae take on riskier loans?
There are only two viable explanations for why they'd take on such loans; political pressure or investor pressure. Democrat politicians wanted to keep the growth of the sub-prime market going, because it's a gimme to democrat voters. The only way to do that was if Freddie Mac and Fannie Mae could buy more of the sub-prime loans from the banks, who had increased the number of such loans by 39% between '93 and '98. Democrats used that growth to strong arm Freddie Mac and Fannie Mae. That 39% growth in the sub-prime market of course attracted attention from Freddie Mac and Fannie Mae shareholder too, so they weren't that opposed to the relaxed rules that Clinton wanted pushed through.
There is only one answer, and it is the answer the U.S. Treasury gave, the changes made to the CRA by democrats in the earily half of the decade.
Now, ds, you can ignore this all if you wish and then summarily declare, "I'm still not convinced," but if that is going to be your tactic, you should at least do the heavy lifting required to disprove all the government documents I've linked to and the to videos I've provided that has captured democrat in their own words.
In the 2006 election cycle, Fannie Mae was giving 53 percent of its total $1.3 million in contributions to Republicans, who controlled Congress at that time. This cycle, with Democrats in control, they've reversed course, giving the party 56 percent of their total $1.1 million in contributions. Similarly, Freddie Mac has given 53 percent of its $555,700 in contributions to Democrats this cycle, compared to the 44 percent it gave during 2006.
Looks like both parties recieved monies - and when the Republicans were in control they got the lions share.
In light of this I find myself not quite understanding the allegations being brought forth towards Democrats in particular. These figures are from YOUR article Dwayne. Facts, not spin.
In addition, one of the people leaving a comment in the link had a link to another interesting article.
By JACKIE CALMES Published: September 9, 2008 WASHINGTON — Senators Barack Obama and John McCain each cite the mess at Fannie Mae and Freddie Mac as a consequence of the corrosive coziness of lobbyists and politicians that they promise to end. But each man and his party also have ties to the fallen giants that will complicate the next president’s job of reshaping the mortgage finance companies that have been essential to the economy.
The Republican nominee, Mr. McCain of Arizona, has numerous close relationships with and contributions from current and former company lobbyists.
Mr. Obama, his Democratic rival from Illinois, is second among members of Congress in donations from the firms’ employees and political action committees.
Beyond the antilobbyist message, Mr. Obama also indicts the Bush administration and the Republicans who controlled Congress for a dozen years until 2007, including Mr. McCain.
He blames them for lax regulation that freed the companies to go deep into debt to buy the mortgages that crushed them as the housing crisis persisted. Yet his fellow Democrats in Congress have been well known as enablers of the two companies for years, protecting the firms’ dueling responsibilities to support affordable housing as well as to maximize shareholder profits.
For all their outrage now, neither Mr. Obama, with less than four years in the Senate, and Mr. McCain, after a quarter-century in the House and Senate, has a record of directly challenging the companies. Mr. Obama did warn publicly of a coming housing crisis in March 2007, five months before it erupted and the government first took action.
Several former company executives, as well as current and former Senate Republican staff members, said Mr. McCain seemed to avoid matters related to the financial industry after the last major financial crisis — the savings and loan crisis of the late 1980s. He was one of the “Keating Five” senators investigated by the Senate, accused of interceding with federal regulators for the operator of a failing thrift. Mr. McCain received a rebuke.
More than Mr. Obama, Mr. McCain’s circle of advisers and contributors includes current and former lobbyists or directors for the companies, although since July he has called for a ban on any lobbying by the two firms.
Among the companies’ past advocates are Mr. McCain’s campaign manager, Rick Davis, a longtime lobbyist; Mr. McCain’s confidant and adviser Charlie Black, whose firm worked for Freddie Mac for several years ending in 2005, and the deputy campaign finance chairman, Wayne L. Berman, a vice president for Ogilvy Worldwide and a former Fannie Mae lobbyist.
Mr. Davis previously was head of the Homeownership Alliance, a coalition of banks and housing industry interests led by Fannie and Freddie to stave off regulations.
The group was formed to counter another organization, FM Watch, an alliance of financial institutions and lobbying associations that wanted to even the playing field against Fannie Mae and Freddie Mac, by challenging the implicit government guarantee that allowed the two firms to borrow funds at lower interest rates.
Six members of the Republican lobbying firm Fierce Isakowitz & Blalock, all Fannie Mae lobbyists, have given Mr. McCain $13,250, records show.
The New York investor Geoffrey T. Boisi, a member of Freddie Mac’s board, contributed more than $70,000 to Mr. McCain and Republican Party committees working for his election. Both he and Richard F. Hohlt, a Fannie Mae lobbyist, are among the McCain “bundlers” who have raised $100,000 to $250,000 from others, according to the campaign Web site.
Both candidates’ vetters for their vice presidential picks have links to Fannie. The former chairman, James Johnson, initially led Mr. Obama’s search committee, but stepped aside after a controversy over favorable loan terms he received from another firm. Mr. McCain’s vetter, Arthur B. Culvahouse Jr., was a past Fannie lobbyist.
Mr. Obama’s contributors include the Freddie Mac senior vice president Robert Y. Tsien and the directors William M. Lewis Jr., a banker at Lazard, and the Chicago businesswoman Brenda J. Gaines. He does not accept contributions from lobbyists, but Mr. Obama has been a favorite of Fannie Mae employees and their political action committee, according to an analysis by the nonpartisan Center for Responsive Politics.
He was second only to the Senate Banking Committee chairman, Christopher J. Dodd, the Connecticut Democrat, in contributions from the two firms’ employees and PACs since 1998, the analysis found, even though Mr. Obama has been in the Senate only since 2005. While the two firms have long been careful to hire from and contribute to both parties, generally Fannie Mae has favored Democrats and Freddie Mac the Republicans.
The center said he received $122,850, of which $101,150 was from Fannie Mae.
Until now, the companies were among the capital’s lobbying powerhouses — hiring former members of Congress, administration officials and top staff members as in-house lobbyists, contracting with outside lobbying firms, and sprinkling development projects and charitable contributions among Congressional districts.
With the Treasury’s action over the weekend putting Fannie and Freddie in government conservatorships, the issue of what went wrong and how to fix them has intruded into the presidential campaign.
Mr. McCain wants to see the companies carved up and privatized, as commercial lenders have long sought. Phil Gramm, Mr. McCain’s friend and longtime adviser, also took that position when he was the Senate Banking Committee chairman in the late 1990s to 2003.
Mr. Obama’s comments signal a preference for the sort of public-private hybrid that Fannie and Freddie were, but with tighter controls. The firms, until now, were shareholder-owned and highly profitable, but chartered by the government and backed by an implicit government guarantee that is now explicit.
Both senators issued statements supporting Treasury’s seizure. And both increased the populist rhetoric in their competition to be seen as an agent of change.
Mr. McCain attributed the companies’ troubles to “cronyism, special interest lobbyists and executives making millions of dollars a year while things were going downhill.”
Mr. Obama, in Ohio on Tuesday, said he would oppose any golden parachutes for the companies’ ousted executives. “Any action with respect to Fannie Mae and Freddie Mac needs to put taxpayers first and can’t under any circumstances bail out shareholders or senior management of those companies,” he said.
He sent a letter late Monday to Treasury Secretary Henry M. Paulson Jr. and James B. Lockhart, the companies’ conservator, seeking clarification that the bailout would not provide “a windfall” to ousted executives.
My viewpoint? There is more then enough blame to spread around here. Neither political party is innocent. Any individuals in government who had a hand in this should be prosecuted regardless of party affiliation. And if that goes up to the Presidental candidates then you guys are in a heap of trouble.
And I know how you'll respond already, you'll place the NYT article high and claim again that there is enough blame to go around. That sounds all nice and high minded, but all it is is cover for your political brethern on the left.
It just doesn't appear that NYT was playing fast and loose with the truth on behalf of the democrats, it actually was playing fast and loose with the truth, but for who is anyones guess.
You always seem to work yourself into these little cyclic arguments... dontcha?