[GCFL-discuss] FW: Whose Financial Mess is it, Anyway?

Thu Oct 2 13:06:55 CDT 2008

Can anyone confirm, is Obama's 3 financial advisors the 3 Corporate Officers
from Fannie Mae?
I've seen a few e-mails and many sources sited... but can has anyone seen
the true confirmation of it?
~Lance
On Wed, Oct 1, 2008 at 6:57 PM, Discussion of the Good, Clean Funnies List <
gcfl-discuss at gcfl.net> wrote:

>
>  an eye-opening email I received.
>
> greenBubble
>
> -----Original Message-----
> From: naomiragen at mail-list.com [mailto:naomiragen at mail-list.com] On
> Behalf Of nragen at netvision.net.il
> Sent: Monday, September 29, 2008 1:30 AM
> Subject: Whose Financial Mess is it, Anyway?
>
>
> Friends,
>
>
>
> So, what really happened to the U.S. economy, and where should the buck
> really land?
>
> Jeff Jacoby, one of the few U.S. journalists that you could read during
> the
> Intifada because he always got things right,
> gets it right again.  Beyond the hysteria to the facts.
>
>
>
> Naomi
>
> ------------------------------------------------------------------------
> ----
> ------------------------------------------------------------------------
> ----
> --
>
> September 28, 2008
>
>
>
> WHOSE MESS, CONGRESSMAN FRANK?
>
> By Jeff Jacoby
>
> The Boston Globe
>
>
>
> Sunday, September 28, 2008
>
>
>
>     "The private sector got us into this mess. The government has to
> get us
> out of it."
>
>
>
>     That's Barney Frank's story, and he's sticking to it. As the
> Massachusetts Democrat has explained it
> <http://www.youtube.com/watch?v=X1fM28w34uQ>  in recent days, , the
> current
> financial crisis is the spawn of the free market run amok, with the
> political class guilty only of failing to rein the capitalists in. The
> Wall
> Street meltdown was caused by "bad decisions that were made by people in
> the
> private sector," Frank said; the country is in dire straits today
> "thanks to
> a conservative philosophy that says the market knows best." And that
> philosophy goes "back to Ronald Reagan, when at his inauguration he
> said,
> 'Government is not the answer to our problems; government is the
> problem.' "
>
>
>
>    In fact, that isn't what Reagan said. His actual words  were: "In
> this
> present crisis, government is not the solution to our problem;
> government is
> the problem." Were he president today, he would be saying much the same
> thing.
>
>
>
>     Because while the mortgage crisis convulsing Wall Street has its
> share
> of private-sector culprits -- many of whom have been learning lately
> just
> how pitiless
> <http://edition.cnn.com/2008/BUSINESS/09/15/lehman.merrill.stocks.turmoi
> l/in
> dex.html>  the private sector's discipline  can be -- they weren't the
> ones
> who "got us into this mess." Barney Frank's talking points
> notwithstanding,
> mortgage lenders didn't wake up one fine day deciding to junk long-held
> standards of creditworthiness in order to make ill-advised loans to
> unqualified borrowers. It would be closer to the truth to say they woke
> up
> to find the government twisting their arms and demanding that they do so
> --
> or else.
>
>
>
>     The roots of this crisis go back to the Carter administration. That
> was
> when government officials, egged on by left-wing activists, began
> accusing
> mortgage lenders of racism
> <http://query.nytimes.com/gst/fullpage.html?res=950DE1DF1E39F932A3575AC0
> A96F
> 948260
> <http://query.nytimes.com/gst/fullpage.html?res=950DE1DF1E39F932A3575AC0
> A96F
> 948260&sec=&spon=&pagewanted=all> &sec=&spon=&pagewanted=all>  and
> "redlining" because urban blacks were being denied mortgages at a higher
> rate than suburban whites.
>
>
>
>     The pressure to make more loans to minorities (read: to borrowers
> with
> weak credit histories) became relentless. In 1977 Congress passed the
> Community Reinvestment Act <http://www.federalreserve.gov/dcca/cra> ,
> empowering regulators to punish banks that failed to "meet the credit
> needs"
> of "low-income, minority, and distressed neighborhoods." In 1995, under
> President Clinton, the law was made even more stringent. Lenders
> responded
> by loosening their underwriting standards and making increasingly shoddy
> loans. The two government-chartered mortgage finance firms, Fannie Mae
> and
> Freddie Mac, encouraged this "subprime" lending by authorizing ever more
> "flexible" criteria by which high-risk borrowers could be qualified for
> home
> loans, and then buying up hundreds of billions of dollars' worth of the
> questionable mortgages that ensued. Some state and local governments
> added
> pressure of their own
> <http://query.nytimes.com/gst/fullpage.html?res=950DE4D8153AF937A2575AC0
> A96F
> 948260> .
>
>
>
>     All this was justified as a means of increasing homeownership among
> minorities and the poor. Affirmative-action policies trumped sound
> business
> practices. A manual issued by the Federal Reserve Bank of Boston advised
> mortgage lenders to disregard financial common sense. "Lack of credit
> history should not be seen as a negative factor," the Fed's guidelines
> <http://www.bos.frb.org/commdev/commaff/closingt.pdf>  instructed.
> Applicants lacking sufficient savings to cover a down payment and
> closing
> costs should be allowed to rely instead on "gifts, grants, or loans from
> relatives, nonprofit organizations, or municipal agencies." Lenders were
> even directed to accept welfare payments and unemployment benefits as
> "valid
> income sources" to qualify for a mortgage. Failure to comply could mean
> a
> lawsuit.
>
>
>
>     As long as housing prices kept rising -- and with millions of
> otherwise
> unqualified borrowers adding to demand, they did -- the illusion that
> all
> this was good public policy
> <http://articles.latimes.com/1999/may/31/news/mn-42807>  could be
> sustained.
> But it didn't take a financial whiz to recognize that a day of reckoning
> would come. "What does it mean when Boston banks start making many more
> loans to minorities?" I asked in this space in 1995. "Most likely, that
> they
> are knowingly approving risky loans in order to get the feds and the
> activists off their backs . . . When the coming wave of foreclosures
> rolls
> through the inner city, which of today's self-congratulating bankers,
> politicians, and regulators plans to take the credit?"
>
>
>
>     Not Barney Frank. And yet his fingerprints are all over this
> fiasco.
> Time and time again, Frank insisted that Fannie Mae and Freddie Mac were
> in
> good shape. Five years ago, for example, when the Bush administration
> proposed much tighter regulation of the two companies, Frank was adamant
> that "these two entities, Fannie Mae and Freddie Mac, are not facing any
> kind of financial crisis." When the White House warned  of "systemic
> risk
> for our financial system" unless the mortgage giants were curbed, Frank
> complained that the administration was more concerned about financial
> safety
> than about housing.
>
>
>
>     Now that the bubble has burst and the "systemic risk" is apparent
> to
> all, Frank blithely declares: "The private sector got us into this
> mess."
> Well, give the congressman points for gall. Wall Street and private
> lenders
> have plenty to answer for, but it was Washington and the political class
> that derailed this train. If Frank is looking for a culprit to blame, he
> can
> find one likely suspect in the nearest mirror.
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