Last week the government commission charged with identifying the cause of the housing bubble came out and blamed the problem on a lack of proper regulations; when in fact, regulations weren’t to blame. The commission was instead engaged in a cover-up for president Bill Clinton, representative Barney Frank, and their liberal colleagues. Under Clinton, the government forced the banking industry to offer mortgages to low and moderate income families who could not afford them.
Another contributing factor –in fact the primary factor to the problem, was the hiring of two individuals directly responsible for the bubble. The first was a young Acorn lawyer by the name of Barack Obama. The second was Andrew Cuomo, Jr. hired as the secretary of housing, who is now New York State’s attorney general. It was their victory in the amount of $2.1 billion over a Chicago bank, which had refused Clinton’s and Cuomo’s mandate to lend to unqualified borrowers, to now provide sub-prime mortgages to 15,000 of these unqualified borrowers. The commission later covered up the actions of new senator Obama, and Cuomo, Jr.; the Fathers of Subprime.
The commission also covered up the fact that the heads of the Senate Housing and Banking Committees, Frank and Dodd, forced Fannie and Freddie to buy toxic, subprime mortgages that were due to go into default. This led directly to the failures of Fannie and Freddie, and their subsequent taxpayer bailout in the form of TARP. The cost of this bailout is a mind numbing $10 billion loss each and every quarter.
Franklin Raines, former chairman and CEO of Fannie Mae, was placed in that position by Frank and Dodd so that the mortgage company could become their personal piggy bank to be pillaged at will. When Raines was finally caught for embezzlement, Dodd and Frank arranged for no charges to be brought against him, and for the American taxpayers to pick up the legal tab in the amount of $600,000 and counting. Raines now works as Obama’s housing campaign advisor.
Again, the commission has blamed the housing bubble on a lack of regulations. In reality, they failed to stop the loose lending practices that were encouraged by Senators Dodd, Frank, and the Senate Banking Committee. Instead of protecting consumers and their investments, and keeping our economy on sound footing, these self serving crooks hired a guy in Raines so that they could rob the cookie jar at will.
The commission is also covering up the accounting fraud within our large banks that has brought us to an unsustainable economic recovery and stock market rally. What the commission doesn’t want you to know is that J.P Morgan and our nations four other insolvent banks are hiding trillions of dollars in derivatives. Because a $200,000 home could fetch only $20,000 at auction, the banks decided to unload their subprime mortgages. To borrow a page from the playbook of Enron’s Jeffrey Skilling, Geithner and Bernanke decided to use ‘off balance sheet’ financing, which shifts the losses from one balance sheet onto another, hidden balance sheet. Skilling now sits in prison.
Beginning in September, 2009 the Fed changed the housing market accounting rules from mark to market, to mark to model. For example, under ‘mark to model,’ a $200,000 mortgage that is really worth $20,000, is now magically worth whatever the bank wants it to be, say $220,000. And rather than placing the toxic $200,000 mortgage on their balance sheet, the Fed protects itself from becoming insolvent by essentially shifting the $180,000 loss onto the balance sheet of the American taxpayer! What, are you nuts?
Skilling looks like a petty thief compared to the Fed. Maybe he should be pardoned?