Bipartisan Economic Collapse -- Obama's Guys & Bush's Administration Both Guilty
We have earlier talked about the responsibility of Obama's associates, such as Franklin Raines and James Johnson, in the subprime mortgage collapse which led to the general, worldwide economic crisis that we are now experiencing. It is curious that good capitalist bankers had adopted the thinking of ACORN --a community organizing body close to Obama that had campaigned for easy mortgage access for people who were poor credit risks. As long as most of those borrowers who obtained subprime mortgages could make their monthly payments, a lot of bankers were making big money. Indeed, these mortgages were being divided into separate pieces [such as interest separate from principal] called derivatives. These derivatives were considered creative financial instruments that could be packaged and resold, often to banks outside the US. There was big money to be made in this racket as long as the borrowers kept making payments.
But many of the mortgages were subject to varying interest rates. When rates went up, poor folk were less able to pay. When the price of gasoline [subject to the world market price of crude oil] went up, poor folk were less able to pay. When people lost their jobs, they were less able to pay. When they couldn't pay, the houses were foreclosed by the banks and these people lost their homes. With so many houses on the market --at a time of various and sundry economic problems-- the market for buying houses was weak. Housing prices came down. This reduced the value of houses as assets owned by individuals, banks, and other institutions. And so on. So we moved into a real financial crisis that wiped out values of corporate stocks, the assets of many many people throughout the world. Non-cash savings fell far down in value. Asset values collapsed.
And one of the causes was community organizers' [ACORN, etc] ostensible sympathy for the poor, who in many cases lost the equity that they had in their homes when they were foreclosed. Meanwhile, some of Obama's guys made many millions out of this racket. And some of Bush's guys probably did too.
The Bush Administration listened to lobbyists for mortgage lenders and to "creative" bankers dealing in derivatives. Here is one account of Bush Administration conduct when warned of possible consequences of the easy lending policy:
The Bush administration backed off proposed crackdowns on no-money-down, interest-only mortgages years before the economy collapsed, buckling to pressure from some of the same banks that have now failed. It ignored remarkably prescient warnings that foretold the financial meltdown, according to an Associated Press review of regulatory documents.Now, if you have cash to spare around the house, now would be the time to buy stocks in companies whose products or services are likely to be needed under any economic conditions, such as high tek. If you're cautious, stay with fixed income securities. In either case, remember that the Apostle of Change about to enter the White House also is tainted with the crisis through both his former "community organizing" comrades and his present buddies in the financial industry. Think Jim Jones and Franklin Raines and so many others.
"Expect fallout, expect foreclosures, expect horror stories," California mortgage lender Paris Welch wrote to U.S. regulators in January 2006, about one year before the housing implosion cost her a job.
Bowing to aggressive lobbying — along with assurances from banks that the troubled mortgages were OK — regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way. [Associated Press, 11-1-2008]
Ain't Change wonderful!!!
- - - - - - - - -
UPDATING 12-9-2008 More on Obama's consultant Franklin Raines and the whole Fannie Mae & Freddie Mac gang [here], and their contribution to bringing down the economy.
More on young, straight-as-an-arrow Rahm Emanuel, a former director of Freddie Mac [here].
Meet James Johnson, who was on Obama's search committee for a vice-presidential candidate [html here], [pdf here]. The bio sketch of Johnson was issued officially by the US Treasury.
- - - - - - - - -
Coming: More on Zbig's schemes, Obama's dishonesty, the "Left's" lies, Jews in Jerusalem, Hebron, archeology, propaganda analysis, peace follies, etc.