Who is responsible for the financial crisis?

With all due respect to those of you who are Democrats, the economy is in the toilet and we are loosing value in our 401k and life savings. Mine are down 20% since last year and I'm not happy about. Some of you may have faired worst

Nancy Pelosi and the Democrats would have me believe the Bush administration is to blame. But am I to believe this because they say so? I found the truth of the matter on my own in the attached videos and I find the hypocrisy of Nancy Pelosi and the Democrats to be appaling.

Now add to this Obama and his ties to the Middle East, domestic terrorist. How can you vote Democratic?

How can you vote to give control to these people? All three branches of government. The Presidency, House, and Senate. Where is the Justice? Shouldn't the party that caused the crisis be held responsible and not be rewarded with your vote?

The attached video is a mix of clips that I edited with Windows Movie Maker. The video does not lie. I edited the following from much longer clips downloaded from YouTube.

Origin of the crisis

Our Girls

that ain't workin........that's the way to do it

.....so goes the old Dire Straits song.

Well, I do work hard at my job as we all do. Somtimes though, there are perks such as the "sales meeting" I attended this week in Key West, Florida. We had a solid day of meetings on Wednesday. But Thursday was a fun day which included jet ski's in the morning and sailing and snorkeling in the afternoon.

Ken Lay was small time

It's a long video but very well made and presents a compelling story. There should be FBI investigations here.

Burning down the house

A gift or a loan?

$700 billion bailout. It is inconceivable to me that a failed business could receive "grants" instead of "loans". Why? Why are they so special that they can receive a ton of cash without strings to help support their operations and prevent failure?

Those failed businesses, Washington Mutual, Lehman, Goldman Sachs, and the rest should not be "bailed out" by the federal government. I understand that financial institutions are different in that the Wall street firms finance the American economy and they "cannot" be allowed to fail. Let's assume that is true. Ok then, what's wrong with a loan?

Why can't a deal be worked out where these firms get the cash they need right now to salvage their operations in the form of a long term, low interest loan.

Then, when the real estate market recovers, and it will, the so called "toxic" assets will improve in value. This will allow the banks that hold these assets to sell them and begin a loan repayment program.

This has been done before. In 1979, Chrysler was on the verge of bankruptcy. Supporters argued that the U.S. cannot afford the failure of a company that is the nation's tenth largest manufacturer, its biggest builder of military tanks and one of only three major domestic competitors in its automotive industry.

Congress approved the Chrysler Corporation Loan Guarantee Act of 1979. In 1983, Chrysler paid off the loans that had been guaranteed by US taxpayers. The Treasury was $350 million richer.

Read about it here: Chrysler

I think the American taxpayer would go along with a plan that has this sort of provision. This would be an investment not a gift.

Please someone tell me why this cannot be done?

Leader or follower

Leader or follower. Who do you want as President?

Watch this and decide:

Leader or follower

Federal Housing Enterprise Regulatory Reform Act of 2005

McCain was co-sponser of the 2005 bill that would have prevented the Fannie Mae and Freddie Mac collapse. The Democrats killed the bill. Here are excerpts from his speech 3 years ago:

"Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.
Quick Info

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation."

More on the financial mess...

In my previous post, I laid out my understanding of the financial crisis and summarized the post by saying:

"So here's the bottom line as I see it. CEO's like Raines and others loosened the requirements for mortgage lending in an effort to get more loans to minorities and lower income folks. Then greedy corporate types took advantage of the loose lending practices to package together all sorts of investments that were sold to investors around the world. All of it based on weak loans. The loans collapsed and the investments based on those loans became worthless. The house of cards has fallen down."

Here is a newly found video, recorded in 2005,that shows how one of the Fannie Mae CEO's was going out of his way to ensure close relationships with the Congressional Black Caucus, (CBC). It really illuminates how much power the CBC has and how eager some were to please them.

As you watch the video below, you can almost hear the thought process of the Fannie CEO:

We can't have the CBC making news that we can't qualify minorities. We don't want that publicity. We don't need no stinkin' mortgage qualifications, we'll just give 'em the loan!

Fannie Mae and Black Caucus

What does it all mean?

It is striking that big Wall Street firms like Lehman Bros., AIG, Merrill Lynch, and others have failed or are in big trouble. All this appears to come from the collapse of housing prices. What's even more troubling is that many of these firms are being bailed out by the US government.

I was shocked to hear of the collapse of Fannie Mae and Freddie Mac. I don't know alot about "Freddie" or "Fannie" other than they are partly controlled by the government, and they underwrite about 50% of all mortgages in the US. And they failed? That's got to be a big problem.

But what does it all mean for us? I don't own stock in any of these failed companies. I've always had a fixed rate mortgage. My credit card debt is low. How will I be affected?

I know that when the stock market goes down, my 401k takes a hit. But since I don't actively trade that money, I just leave it alone and eventually the value comes back. At least it always has in the past. The stock market goes down then back up. Unless there's a "crash", I'm not too worried. Maybe I'm naive.

I think the more direct consequences of all this financial news is that the US government takes on more and more debt. What does the government do about debt? Simple. Print more money. That works for awhile until we get to a point that printing more money doesn't work. Inflation sets in and consumer goods began to cost more and more as interest rates go higher and higher. Remember the Carter years? We don't want to go there.

Here is an explanation from Neal Boortz as to how we got into this mess. While reading his article, I remembered the headlines he refers to and the cry to get loans out to more americans.

"...years ago the buzz-word in the media was “redlining.” Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. There I was closing these loans in the afternoons, and in the mornings offering a counter-argument on the radio to these absurd “redlining” claims. Frankly, the claims that evil mortgage lenders were systematically denying loans to blacks and other minorities were a lot sexier on the radio than my claims that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination.

Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast .. to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank’s efforts to grow if that bank didn’t make loans to unqualified borrowers. Enter, stage left, the “subprime” mortgage. These lenders knew that a very high percentage of these loans would turn to garbage – but it was a price that had to be paid if the bank was to expand and grow. We should note that among the community groups browbeating banks into making these bad loans was an outfit called ACORN. There is one certain presidential candidate that did a lot of community organizing for ACORN. I won’t mention his name so as to avoid politicizing this column.

Who was the African American CEO of Fannie Mae during this time. Franklin Raines, who is now one of Obama's advisors.

"In 1991-1996 Raines became Fannie's Mae's Vice Chairman, a post he left in 1996 in order to join the Clinton Administration. In 1999, he returned to Fannie Mae as CEO, "the first black man to head a Fortune 500 company."

So here's the bottom line as I see it. CEO's like Raines and others loosened the requirements for mortgage lending in an effort to get more loans to minorities and lower income folks. Then greedy corporate types took advantage of the loose lending practices to package together all sorts of investments that were sold to investors around the world. All of it based on weak loans. The loans collapsed and the investments based on those loans became worthless. The house of cards has fallen down.


Read the rest of the story here:

http://en.wikipedia.org/wiki/Franklin_Raines
http://www.realclearpolitics.com/articles/2008/09/the_rest_of_the_meltdown_story.html

Get out Galveston

Ike is going to be bad. Government warnings mention "certain death" consequences for those who choose to stay.

I hope everyone gets out

911 REMEMBRANCE.....7 years ago today

It's been 7 years already, 7 years since the world changed. As we watch those remembrances today and listen to the media pundits discuss then and now, I think it's important to remember one thing--we haven't been attacked in seven years.

It's easy to argue that Bush has just been lucky. They say our actions overseas in Iraq and Afganistan and other places make us "less safe". Progressives say Bush is little more than a puppet for Chenny and Rove, that he couldn't possibly have the foresight, intelligence, and guts to implement a strategy that is directly responsible for the safety we have enjoyed over the last 7 years. The Patriot Act, Gitmo, Homeland Security, the Surge, all of it has made us "less" safe they would have us believe.

Bush is absolutely correct when he says, "The terrorists only have to be right one time. We have to be right 100 percent of the time". Well, we have been right for seven years. We have had no attacks on US soil in 7 years. -- it seems some Americans have almost forgotten about the threat of Islamic terrorism. It's not a big part of the campaign discussion. You hardly hear it mentioned.

In reality though, it's hard to argue with success, and success is exactly what the Bush policy on terrorism has been for the last 7 years.

I do believe that we are all keeping a close eye on Ike....Lets keep our finger crossed!! Chloe and I love you all!