Bush Administration invoked an obscure Banking clause 1863 to enable predatory lending practices
By John Amato Thursday Feb 14, 2008 6:16pmGov. Elliot Spitzer explains:
Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.
That sounds good. I witnessed such practices and saw prices skyrocket before my eyes . That was a huge reason that the Bush economy held up as long as it did---I think Bush called it the "ownership society." I guess we can call it the foreclosure society.... The right wingers usually try to say that we blame Bush for everything. Well, let's see how he did, shall we...
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers. In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative.
Nuff said....
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Broke the army, looted the Treasury, ruined the economy, shredded the Constitution. There's your legacy * (Kurt Vonngegut word - See Breakfast of Champions.)
Why is it that I always have the feeling with President Bush, that for the past 7 years he has had his minions pouring over ancient laws to find just the right one to continue to f the American public in favor of BIG, BIGGER, BIGGEST corporations? Returning us right back to the laissez-faire capitalism that led to the Great Depression? Why do I still have knots in my stomach every blessed time this man opens his mouth? Why?
If we don't see War Trials after this fiasco of an administration all Americans (except the 28% Moron Factor) will be very disappointed.
Next thing you know, His Fraudulency will invoke some class of a "National Economic Emergency" to mandate the outright denationalisation of certain "non-essential" and "unlikely to deliver taxpayer value" agencies, institutions and schemes of the United States Government.
Said denationalisation, on closer inspection, tending to be closer to "spoils" and patronage, favouring only a few close droogs of the "inside of the inside" of the Great Within (as Rewards for Good and Loyal Service), rather than encouraging serious enterpeneural innovation--and a bit too hasty, @ that.
Besides: The proceeds from such denationalisations are probably going to serve corrupt and evil purposes, rather than accrue to the Treasury, as the law usually requires.
Does this fall into the "crooks" or "liars" category? When is somebody going to go to jail for this crap?
somebody is cooking with old fish again. It's the Bush boy.
for fuck's sake - seven years of this tripe and when does the phrase "high crimes and misdemeanors" become relevant?
I am on your side but unfortunately it is not "nuff said"...you need to follow up with more detail to make a convincing argument the will stand scrutiny. Facts.
bush/CHENEY and all his bastard fiends have shoved a staff up the butts of the consumers
for too long now. it's time we all shoved a rod up their butts and IMPEACH.
how long can this administration be allowed to destroy the entire
Constitution and civil liberties of American citizens?
FUCK BUSH/CHENEY AND THE ENTIRE GOP.
These people will never see justice, so we have to take their lives.
Bangkok Bob @ 3:
If we had prosecuted all these assholes after the Nixon administration, we wouldn't be in this mess. We need to stem this precedent or it will come back on us.
Who could have foreseen, Bush siding with multinational corporations against US citizens? Alert Condi! This has to be absolutely unprecedented.
And to underscore, I've heard people calling this a "housing bubble" since 2000.
And the war on poverty goes on and on and on -----
This action by the W/H occurred, according to the above article, in 2003 and my
question is..."Why is Elliot Spitzer just nowmaking the media
and the general public aware of such?" The predatory actions by numerous
financial institutions occured in the Spring/Summer/Fall of last year and NOW
we are learning that this admin., as usual, took steps to assist them and not
the consumer..
fwffavvg @ 10:
Lets not advocate illegal violence. The War Crimes Act allows for the death penalty.
Don't think anyone who tried, actually tried, to be an awful president could have achieved more in that direction than shrub. He really does have the Midas touch.
Hey this law is from 1863, the year of Gettysburg. This proves Bush = Lincoln!
VietVet8666 @ 15:
Make that the MINUS TOUCH!
Yup, leave it to ol' Bushie to go back and restore some of the things that were fixed after they caused the Great Depression. I hope there is a special place in hell for this crew.
What i do find interesting though, is the fact that the housing crisis has only received the attention from Bush et al, after the large corporate lending apparatuses have begun taking it on the financial chin. Enter project lifeline - essentially helping banks get the money that they are owed with ZERO guarantees to the debtor. Wtf ever happened to the republican mantra of letting the markets adjust themselves?
Man, they're in it deep. Right now, the stupidest move for Bush/Cheney is to leave their office/titles/power behind. And that's what scares me the most.
This is gonna be the worst October surprise yet, methinks. Endgame.
"prices skyrocket before my eyes"
From what I understand in California people have bought houses which conceivably have outstanding loans which are twice the amount of the actual value these properties as it stands right now.
I’ve heard of people just abandoning their homes in the central part of our state probably because of this very fact and the type of adjustable rate loans they were sold.
During the early 90’s we had a recessions here and from what I understand people had the very same real estate problem now. Except the loan verses the actual value of the homes was not as dramatic as it is now.
If you took into consideration also that in the early 90’s outsourcing of jobs (NAFTA) was not as much of an impact as it is now, this really does not bode well for our state.
I’m really worried about this whole situation because it took about three years for California to climb out of that early 90’s recession.
How are we going get out of this mess?
The clown never stops.
bush and his crime family ... I wonder if these "people" are even human. They go for corruption, evil, and lies. The hypocrisy we know about.
I know they eventually get their karma, but sometimes I wonder why it takes so long.
ticktock @ 21:
No one knows. Not even the Feds and Wall Street knows. We are in uncharted territory.
LOL! I wonder if the Bush lovers who've lost their houses still wanna pucker up to George. This is truly criminal. People want to impeach him for crimes in foreign policy? If this were to get widespread media coverage, I'll bet Conyers would be able to get Bush the boot inside a month. No shit. This is just ridiculous. In collusion with the Fed and banking industry, this government simultaneously dumped too much cheap money and credit into the market, causing a spending frenzy with a crapload of debt racked up. And then had bankruptsy laws changed to favor the creditor when things go bad. And then used an obscure tactic to protect the banks for predatory lending practices as well.
Bush = cut and sintered, left to rust, iron pipe. Screw the people coming and screw the people going.
And he still has 30% approval rating? These people can actually breathe? Dammit, people are stupid.
The more you read about this regime, the more it's obvious that they aren't a bunch of screw ups. Everything they've done, has been done on purpose. In a word---TREASON.
...leaving foreign investors with a crap load of empty sacks. I guess we just give Hawaii to the Chinese and call it even.
And the hits just keep on coming ( and those at work think I'm so pessimist about anything this regime does??) I was a student at a local college and a few of the students thought that the country should go back to the late 1800's i.e no federal agencies and by extention no protections.
On another note the mining companies continue to use a law passed while Grant was in office to NOT pay for royalties and property they bought pennies on the dollar something to do with getting people to settle out west.
This regime ( or is it a way of thought ) that wants to SHOW that government doesn't work and spin it so as to get the public to go along with to drown it in a bathtub
off topic maybe all those congress critters that voted for torture should have to go through it after all maybe they'll get kidnapped while on their ( your paid for) fact finding missions ( more like vacations) and they'll give away vital government information and also to experience what they're condooning
Bush Economy = Dot House !
ebone @ 7:
AMEN!
chrismurphy @ 24:
Didn't Hillary vote yea on that bankruptcy law Maybe the congress should have to update outdated laws stop making new ones you'll never see the MSM cover this they are in bed with those that profit from it and those 30% must not have enquiring minds to question all the evil that is being done by those they voted for
I'd like to see the boss of this little department in front of a committee. Even if he is a typical bush liar, I like to see the vermin having to crawl out into the sunlight for a few hours.
This reinforces the fact that EVERY aspect of the government has been politicized to either destroy beneficial programs or enrich the robber barons of the GOP.
this was all done so that in the sotu address of 2 years ago the chimp could exclaim
"home ownership is at the highest point in our history"
it was all smoke and mirrors for the greatest ponzi scheme in history
Old Billy @ 14:
E.X.C.E.L.L.E.N.T... let the fun begin!
Point in case.
Today, a relative large number of ordinary citizens own overpriced houses bought using extraordinarily risky loans, and a large number of institutions such as pension funds, banks, hedge funds, and money markets own fraudulent securities based on these house loans, worth a fraction of their face value.
Not pretty. And thats not even all of it.
Robynhood @ 8:
For example, what is the text of this obscure & most certainly outdated law? What are the provisions by which it is enacted. Are there any known exemptions? etc etc etc.
I'm sick of much of the spoilage we've been seeing lately, but I'm not going to accept that any comment by the left which is unsupported is instantly true either.
ebone @ 19:
Are you kidding when those that profit have it rough they call for help ( bailout) markets that adjust themselves is a fairy story just like free markets
the smarts guys in the room must have taken their courses from a correspondence courses.
Watch your credit card annual percentage rates skyrocket to cover their greed
The reality is the only effective form of protest now is to not consume ANYTHING.
Just bring it to a standstill-stop and see who's left standing with their pants down around their knees.
L.A. Confidential @ 34:
You are connecting the dots...
This real estate fiasco looks like the ripple that starts the tsunami...
I wish I knew how to surf...
unsurebtwilling @ 36:
I am inclined to just go with what usually fits:
Republicans are selfish hypocrites with two sets of ever-fluid (in their favor, of course) rules. Don't trust them any further than you can toss a Limbaugh.
L.A. Confidential @ 37:
Man, I HAVE to keep supporting my local comic book shop! But I get it.
ticktock @ 38:
And not only that they tweaked Bankruptcy laws so ordinary people can't get out of this Sh*t.
L.A. Confidential @ 37:
You are absolutely correct on this. If everyone simply bought the necessities, in cash, then those greedy corporatists and companies would truly be brought to their knees... they would have been kicked where it hurts indeed.
unsurebtwilling @ 27:
Are you kidding? I am so skeptical of these creeps that if GeeDub Bush himself told me that my hair was on fire and I would burn to death with one hand protecting my wallet and squinting with abject suspicion at his motivation for even addressing me.
Based on the stats that show people become conservative when the become homeowners, the GOP hatched a plan to create a permanent majority by getting as many Americans to be homeowners as possible. They changed all the rules needed that lead exactly to the current subprime mess.
To anyone out there losing your house due to this, just know your situation is direct result of a GOP power grab.
I've seriously considered refusing to pay income taxes as an act of personal resistance for years But I'm scared shitless of going it alone.
Burns:
Homer:
Burns:
Robynhood @ 8:
Doesn't the article tell us all we need to know?
They stopped states from trying to prevent what is going on today...
I never liked the BS, "Buyer Beware"....I say "SELLER BEWARE"...you sell me lies,fake numbers, hidden costs etc,....'SELLER BEWARE'.
Hasn't anyone ever stopped to wonder whether this was intentional? It would certainly fit with the shock doctrine theory and disaster capitalism. If they succeed in bankrupting the country and creating an economic crisis, sure it will hurt for a while, but it allows them to ram through unpopular economic policies (economic shock therapy) while people are distracted and vulnerable. Does anyone think these guys really care about the economic suffering of the middle and working class??
Spicegal @ 49:
Thats what I've been trying to say, it WAS intentional. Repubs thought they could build a permanent majority by turning as many people as possible into homeowners, with the understanding that homeowners tend to become more conservative. So they changed the rules that let banks put people into homes that shouldn't have been. With typical GOP consequences.
Spicegal @ 49:
Haha! No offense intended, but I am going to go out an a limb and guess that just about everybody here thinks it was intentional.
:)
Spicegal @ 49:
Yes it's intentional.
I'll swear, if the administration had had a devious plan to destroy America, they couldn't have done any better than they've done.
I'm really beginning to wonder what they plan to do after they're gone. I can't imagine they'll be satisfied to just sit back and be powerless in the years ahead, have no affect on government at all with no way to pull off their dirty sneaking tricks. I think America has to be very careful and keep an eye on the cabal members, even if they "break up". The Democrats need to put iron-clad standards, reviews, and enforcement of consequences in ALL government agencies -- I think these evil ones will challenge anything that gets in their way, pay people off, refuse to follow any rules, etc.
Well of course the Banks are not to be trusted. They are owned by the elites. The clearly stated goal of the Illuminati/Skull & Bones Society/FreeMasons/Bilderberg Group/Council on Foreign Affairs/Trilateral Commision/Rockefeller/Rothschild cabal is the total collapse of the US economy so that the populace will acquiesce to the dissolution of national sovereignty and succumb to a One World Government with a One World Military police state.
"Some even believe we (Rockefeller family) are part of a secret cabal working against the best interests of the United States, characterizing my family and me as 'internationalists' and of conspiring with others around the world to build a more integrated global political and economic structure---one world, if you will. If that's the charge, I stand guilty, and I am proud of it."
- David Rockefeller, “Memoirs”, 2002
"The end goal is to get everybody chipped, to control the whole society, to have the bankers and the elite people control the world."
- Nick Rockefeller, January 29, 2007
"In politics, nothing happens by accident. If it happens, you can bet it was planned that way." --Franklin D. Roosevelt
Travis Stock @ 54:
A work friend of mine once laid this out for me. Heady, scary stuff. Bastards!
I wonder if the elite get chips, too, in accordance their grand plan. Once again, I'll go out on a limb and guess that the majority of the One World rules won't apply to them.
Travis Stock @ 54:
When you peel away all this stuff your talking about all they are is greedy old men from old wealth bloodlines going back centuries who feel they are entitled to rule over people and live in luxury.
Sort of puts a kink into the argument that people shouldn't get help avoiding foreclosure on their home as they should've known better. Pretty hard to be an informed investor when devious business practices are allowed.
49 minutes ago
NEW YORK - The former chief executive of Refco Inc., one of the world's biggest commodities brokerages, cried as he pleaded guilty Friday to conspiracy and fraud charges.
Phillip R. Bennett, 59, the company's former chairman and chief executive officer, pleaded guilty before U.S. District Judge Naomi Reice Buchwald to 20 counts of conspiracy to commit securities fraud, wire fraud, bank fraud, money laundering and making false filings to the SEC.
One more down
And of course . . The New Dumbest Men in The Room
Automakers bank on NASCAR to keep driving sales Reuters - Fri Feb 15, 3:35 PM ET
CHICAGO (Reuters) - Racing fans will have many questions when the NASCAR season kicks off Sunday with the Daytona 500 race, but automakers only wonder whether the sport will retain its popularity and keep driving vehicle sales.
I don't know anyone who buys a car because of NASCAR racing. Do people really do that?
The costs of this scandal will never be known. Families are being destroyed not only because they are losing their homes, but marriages are collapsing under the strain. Two families on my street who were convinced by predatory lenders that they could afford to live here, will be selling their homes not only because they cannot afford them, but they are divorcing and going their separate ways. It's tragic to watch.
Snark: But I'm sure that someone got rich off of this mess, so it's all okay. That's the American way!
The republicans way to wealth has long been two-pronged:
[1] Privatize their Profits
[2] Ration OUT their Risks
Other than the Spitzer article appearing in the Feb. 14th issue of the Washington Post
and here on this C&L thread, can anyone tell me they have seen or heard about this
on any other MSM outlet; be it TV/Radio/newsprint??? I was not aware of this
until seeing here at C&L and I'll be willing to wager that 98 percent of the citizens
of the U.S. do not know about this becasue of the FAILURE(as usual) by the MSM
to report or give it attention. Slime balls(MSM) are almost as bad as that asshole
sitting on his throne in the W/H.
(Some) Answers About the Office of the Comptroller of the Currency (OCC) from their site.
The OCC can:
* Help you find a particular national bank.
* Get you a bank's phone number.
* Tell you where a bank's main office is located.
* Tell me who acquired my bank. (Maybe, you have to call).
The OCC won't:
* Check your Social Security number for fraudulent activity.
* Help you find out if a bank has been cited for a violation of a regulation or law.
* Provide a list of reputable mortgage lenders.
* Provide the names of the board members/officers of the bank.
* Stop a collection process or any legal action initiated by a bank following a complaint to the OCC.
* Help if you have an issue with a bank is currently in litigation.
* Say how safe is a particular bank. Or what is the rating for a particular bank.
In short the OCC will help you find a
pushernational banker. After that anything else is your problem.Doggiebobo @ 13:
He's been pretty busy lately...:)
It takes awhile to right the wrongs of this world.
Old Billy @ 14:
Do you really think they will ever see in inside of a courtroom?
crushburger higganbotham @ 65:
If that's true, then it'll take almost forever to correct what bush-lite has done to this
country.
YEA!! What Powkat@1 and Libertylover@2 and Bangkok bob @3 says.....totally spot on folks....Yea, hellova legacy...legacy from hell that is PK.. Why indeed, his royal crooked stupidness turns my stomach too Liblov... And I'm right there with ya Bob.. If this fuck and his puppet handler doesn't end up behind bars sometime soon, I too am going to be one disappointed mofo....I'd like to see some smartass dem, for a change, find some obscure law from a couple hundred years ago to run these S.O.B's out of the oval office on a rail... tarred and feathered preferably...........JD
anney @ 60:
There the same 25% that support Bush.
Shakedown!
Doggiebobo @ 67:
That's the best-case scenario.
I'll be happy if they keep Bush from doing greater damage before he departs.
The banks lobby hard to be able to use these predatory practices, then when it all hits the fan, they want a bailout. They claim to be the victims after making money ass-over-elbow on subprime mortgages. Their story is that no one informed them of the true extent of the risks they were taking in offering these loans. Suurrre! There's a reason that people with poor credit ratings pay more, and the banks love them. They charge so much additional interest on these loans plus all kinds of fees that unsophisticated borrowers think are just part of the deal. My heart really bleeds for the banks. Just like it did the last time this happened and the time before. If nothing else, the banks should be keeping at least one person on staff who remembers the big S&L scandal of the 80s. They can tell the banks how much the government is willing pay to indemnify them.
What next, Prohibition?
Today the tenth house on my street went up for sale. It's a losing proposition--of the original nine, only one sold, and the other eight are up for rent. And I live in a middle-class suburb in Phoenix, where the houses were going for $280K in 2005. Now the neighbor behind me is trying to sell his house for $169,000. Three of the houses across the street to the west of me are abandoned. The owners pulled up moving vans in the middle of night, loaded them up, and took off. As I'm a night owl, I got to see these midnight escapes firsthand.
All I can say is, Bush certainly named it right--the Ownership Society. Once that little clique of robber barons suck you in, they own your ass.
ebone @ 7:
When the giant news media empires are broken up and more human friendly businesses are the norm.
We need no cross ownership of TV, newspapers and interweb, limited owners of stations, and something along the lines of the AT&T carve up into the baby bells.
Syndication and cooperation is fine, but the robber baron style empires need to go for the sake of US and world democracy.
Great research, and good selection of Spitzer's quotes. Says it all. Repeat it.
cf @ 76:
Yes, but.........did we have to see the face. ;-)
So much for Republans and states' rights! ...Again! See also California and the EPA.
Filthy Harry: I saw your post in the Olbermann thread, and it nicely foreshadowed this C&L post. I remember talk of the "ownership society", but the agenda behind it never dawned on me.
wlkjf: Good stuff. :D
Doggiebobo: "Closing Bell" on CNBC touched on Spitzer's testimony. The two yammering guests/contributors on the right side of the screen discussed a few aspects of it, and argued a bit, though they seemed to agree that Spitzer was "grandstanding" by criticizing Bush.
Spitzer was a guest on CNBC's Cramer today, and that'll be rerunning at 11pm EST. I'm interested in seeing what he has to say there. Cramer's been expressive on the subprime meltdown, to say the least, although focusing more on the Fed's slow reaction than on the actual predatory lending. Being stock-centric, most of his critique of bad lenders and tanking banks is in the form of "avoid their stocks; their balance sheets are disasters".
Powkat @ 1:
Let's not forget that the US had the entire worlds empathy on 09.12.01 to now being the evil empire of the 21. century.
Google "Hugh's List Of Bush Scandals" for more.
But that couldn't be... The republican Party stands for STATES RIGHTS!!!!!
Legal Action Against Providian (Credit Card Issuer)
http://www.bcsalliance.com/creditcards_providian.html
....In the last decade, many Attorney General offices in dozens of states have stepped up their efforts to go after credit card issuers and stop their abusive and illegal practices. As a result, the OCC decided to put a stop to it once and for all since this organization is really behind the credit card banks and against the consumers. Therefore, in January 2004, the OCC declared itself the sole authority over all credit card consumer issues, squeezing out state consumer regulatory actions. You can still complain to your state AG office about the sleazy tactics your credit card company uses, but there is little your state AG's office can do about it thanks to the OCC.....
What You Can Do to Stop the Abusive Practices of Credit Card Companies
http://www.bcsalliance.com/creditcards_complain.html
....Complain to your representative that the Office of the Comptroller of the Currency,
or OCC, is not doing its job in regulating the credit card industry.
Instead of penalizing or issuing regulations and guidelines to credit card
companies, they are a sham organization that protects the credit card
industry from legal actions taken by Attorney General offices in dozens
of states. .....
unsurebtwilling @ 30:
No Hillary didn't vote for the the bankruptcy laws. Here is you list of the Dirty Dinos. Interestingly enough... lots of the same names on the list from who voted against Senator Feingold/Dodd's "no immunity" FISA Act Amendment.
Baucus (D-MT)
Bayh (D-IN)
Biden (D-DE)
Bingaman (D-NM)
Byrd (D-WV)
Carper (D-DE)
Conrad (D-ND)
Inouye (D-HI)
Johnson (D-SD)
Kohl (D-WI)
Landrieu (D-LA)
Lincoln (D-AR)
Nelson (D-FL)
Nelson (D-NE)
Pryor (D-AR)
Reid (D-NV)
Salazar (D-CO)
Stabenow (D-MI)
We have to do something about getting rid of these a**holes.
So who is going to do anything about this, John? Spitzer writes an article that lays it out and there it will remain, a relic of page A25 on Valentine's Day in an election year.
And people wonder why there is a stampede to a candidate not locked in this mess?
Spitzer doesn't go far enough in this article. There is no way in hell that Bush could have reached back to the 1863 National Bank Act if Clinton hadn't repealed the 1933 Glass-Steagall Act in 1999. This dual act was put into place to prevent the financial scams of the 1920s. It was replaced by the Gramm-Leach-Bliley (GLB) Act in February, 2000.
Read the summary of what Malcolm Bush, President, The Woodstock Institute, and Member of the Federal Reserve Board's Consumer Advisory Council, wrote in a Fed Reserve Special Issue in 2000 referring to Glass-Steagall's replacement, GLB, also known as the Financial Services Modernization Act:
The legislation's failure to extend CRA [Community Reinvestment Act] to any institution or affiliate engaging in banking services has several consequences. It establishes in the financial service regulatory structure an automatic shrinkage of the CRA umbrella as traditional banking activities are increasingly offered in nonbank institutions. So, fewer and fewer institutions that engage in banklike activities will be examined for the way in which they serve their communities, including lower-income neighborhoods. Therefore, the growing body of businesses that exploit lower-income families, such as predatory mortgage lenders, payday loan stores and car-title lenders, will have less competition from regulated lenders and will continue their growing assault on that market. The results of the growth of predatory lenders are already a disaster in some low-income neighborhoods. Read the rest here.
One person who understands this better than anyone is Barack Obama, who was in Chicago where the Woodstock Institute took up their campaign against what they saw as the undoing of community reinvestment in the late 90s. [Hillary in my view has no understanding of this. She still thinks the Clinton Admin left the economy in great shape, except that the it's all coming home to roost now.]
BTW, the title of Malcolm Bush's article in #82 is
The Road Not Taken
The interests of lower-income families ignored in financial modernization
anney @ 60:
Perhaps decades ago, when the "stock cars" being driven in the races were much closer to their production counterparts than they are now. You may be familiar with the old saying, "Win on Sunday, sell on Monday." Judging by the earlier post about this, GM is still clinging to it.
I believe in today's world the only parts that are shared (a requirement per NASCAR guidelines) are the hood, roof, and trunk lid.
They are still running carbureted engines and 4-speed manual transmissions; try finding those in today's showrooms. The underlying technology hasn't really changed since the beginnings of stock car racing. Thus, today's production car, whether it be an Impala, Fusion, or Charger, is vastly superior in terms of technology to their NASCAR counterparts, even if you consider that two of those production cars still use pushrod V-8s.
Frankly, only an idiot would buy a new Chevy over a Nissan or Ford based in whole, or in part, on how an "Impala" performed in the NASCAR circuit.
They talk about free markets and capitalism, but the Bush admin has so rigged specific industries to defraud the health and welfare of the consumer... it's like living in Stalinist Russia.
Several years ago Frontline did a program on this issue and pointed out how the states had lost power over the banks and Comptroller's office of a dozen people or so was in charge of the credit card industry. Senator Dodd was trying to pass legislation then and no one was listening.
"PREDATORY LENDING"
You know what I noticed about those who say the recent mortgage crisis was due to predatory lending?
1. They are anti-capitalistic, or
2. They do not understand monetary policy and how it affects prices, profits, and loans, or
3. A combination of the two.
In any case, they never specifically define what "predatory lending" is. What exactly is it? The reason why the meaning of it is kept vague by anti-capitalists, is because it has to be vague in order for these people to seem enlightened enough to define it for everyone. It cannot be specific because the anti-capitalists know that if they did define in concrete terms, then the market would simply re-adjust and "be greedy" in some other way.
It is kept vague so that the anti-capitalists can get the government to define it, and let the government take control and ownership of it, all the while staying oblivious to the fact that Alan Greenspan and George Bush purposefully kept interest rates low which causes malinvestment and market distortions. The anti-capitalists hate the free market, and this hatred is what causes them to never have educated themselves on the operations and nature of the market.
Becuase of this hatred and the comcomitant ignorance that follows, they cannot see the actual cause of the mortgage crisis. All they have is a blind rage towards the market, and anytime monetary policy screws things up, they do not see it, they only see the greed of businessmen.
Then, to make matters even worse, they lobby the government to "do something" about it, not even knowing that it is the government that started the whole mess in the first place.
So what we have is a society in which the government along with the Fed interfers with the free market, then when there is the usual side effects and drastic consequences of this interference, a portion of the population (typically liberals) say that MORE government inteference is needed.
If these anti-capitalists remained silent, then I would have no problems with what they believe. But to have to listen to this tripe that the Fed is not to blame (when a huge portion of the economy has already come to realize this to be the case), is so frustrating and is so destructive to our long-term well-being.
"Predatory lending" is a hoax. It does not exist. It only exists in the minds of anti-capitalists.
If banks loaned out money to those who they knew could not afford it, then this would NOT be in the self interest of the bank, for they would loan out money for a mortgage worth $500,000 say, but they would allegedly accept not being able to collect the mortgage interest payments commensurate with this mortgage. Since the Federal Reserve raised interest rates in 2005, the easy money that created an artificially high demand for houses, through 2001 to 2004, all of a sudden evaporated, causing the prices of houses to fall at the same time mortgage interest payments rose.
These two factors operated to cause many mortgages to defult, which causes foreclosures. But here is the key: The repossessed value of the homes dropped far below the original mortgaged value,
MEANING THE BANKS LOST SUBSTANTIAL AMOUNTS OF MONEY BECAUSE OF THE FED'S MONETARY POLICY.
Predatory lending?
Hardly.
If greed really were the root cause, why is there not "predatory" practices in every single line of business? Greed, according to the anti-capitalists, is with every businessman who tries to earn a profit. Why is there not "predatory" practices everywhere?
It's because of the monetary system, not the people. Do not blame the people for problems they did not create.
This is the domestic version of the Economic Hit Man, though here, the unconfessed rendition (hmmmm...the word "rendition" just keeps resonating). And Cheney learned well from his days with Nixon. To lie well, destroy and cover up the evidence. If you haven't, by all means, read Perkin's Confessions of an Economic Hit Man. Now they just turned their sights on the citizens of the United States.
Oh, to the last comment (#88), there ARE "predatory" practices to control excesses, ostensibly. Try things like laws against price fixing, for example. Or consumer fraud. These are properly areas where government's regulatory oversight prevents the dishonest from besmirching the integrity of honest business people. However, under the Bush/Cheney bullshit, they bring us fascism, where the corporatocracy weds the government--we have even BIGGER government not designed to do anything but stuff more money, power and resources into the hands of a very few.
It's funny. That jackass Bush, Sr., claimed one of the reasons for "Gulf War I" was to bring democracy to Kuwait. Yeah, right. Well, I guess his dictionary defines democracy as Oligarchical Caliphate because that's what Kuwait has--and what the liars, thieves and murderers/torturers of the Cheney/Bush administration are trying to install here.
And they're doing it. Quite successfully. They're not making "small" government--they're making it a tool of industry. That is fascism. Must make granddaddy Bush proud to see, Dumbya's persistent fuck ups and inability to speak the English language notwithstanding.
Of course Bush took this route. A its heart, the Bush Crime Family is a predatory banking racket. He's looking out for the family fortune, especially for the easy money that can be had by predatory or criminal practices. The Bush family is all about parasitizing wealth to they neither created nor earned. Over the generations, they either created or were deeply involved in the activities of Brown Brothers Harriman, National City Bank, Union Bank and others. They used these intistutions to among other things, bankroll Adolh Hitler, Hitler's SS and SA, the bolsheviks and similar activities.
If anybody is interested, GToogle "George Bush, the Unauthorized Biography". It is now posted as an online book, and it goes into great depth about the family's history. If you want a deeper insight into how we got into this mess we are in today, it is mandatory reading.
George @ 89:
I listened to this one doctor who has studied Bush's speeches, mannerisms, and body language. And after comparing Bush of 10 years ago with today, he has concluded that Bush is suffering from pre-senile dementia.
It's not surprising when you think of it. Imagine you are President, and the whole world thinks you are the anti-Christ. You get death threats, you cannot read the news, watch TV, go out in public without a hundred secret agents, every single analysis of your actions by everyone in the whole world is extremely negative. You are even called the worst President in the history of the country. Even worse than Nixon. You see an economy that is on the verge of the biggest collapse since the Great Despression, which is to a large extent not your fault but the Federal Reserve, and to a large extent your fault because of the wars you have waged, yet the majority of the world blames ONLY you and not the Fed.
I think the dementia is due in large part to the fact that you are part of the criminal cabal that manufactured a non-existent enemy, a non-existent terrorist attack, and contributed to the realization of the world that you are presiding over a non-existent economy.
Ya, if I were Bush, I would be so completely fucked up in my head that I would go senile as well. But I would have "God" on my side.
Imagine if Bush realized God didn't exist, and that everything he has done is because of his evil DNA. He would have stopped the insanity a long time ago. But he thought he was doing God's work, which in other words means he was doing evil things, but with a moral sanction.
Drew @ 88:
Drew, read the link at #82, and note the date!
Bush does what he does in an effort to render the federal government useless. I guess he thinks if he fucks up the government enough, they can drown it in the bath tub, and then the people will turn to the captains of industry for leadership. I guess that 'government of the people, by the people, for the people shall not perish from the earth.' was just some words mouthed by someone named Lincoln huh georgieboy....
Predatory lending is a subset of subprime mortgages. We would not be in this mess if the Glass-Steagall Act had not been repealed in 1999. It served us well for 65 years.
WHAT THE FUCK?!? Why the hell is Congress so engorged about steroid use in baseball and video taping fucking football games but not looking into any of this?
Drew @ 88:
The House of Cards that Reagan Built:
There you go again, to borrow from Reagan which is appropriate, hawking that anti-capitalist BS. This country had unregulated capitalism before in the late 1800s and what it produced was a very small, very powerful financial elite who had the vast bulk of the wealth and control of giant monopolies… and everyone else had subsistence level stagnate wages and were dirt poor! It was what economist call the “The Gilded Age” or “The Era of Robber Baron Capitalism.”
Reagan’s deregulated “free trade” was supposed to create wealth through stimulating the market and encouraging investment that would start new businesses, increase market competition which in turn was supposed to drive prices down, increase the availability of cheap goods while increasing quality and service.
Economist at the time said this was “voodoo economics” and guess what… they were right all along! After 25 years of “free market” Reagan principles being enacted by successive Republican congresses and administrations what do we see today?
We can now clearly see that Reaganomics led to… a period of greater market competition for only a decade but in the final analysis it resulted in market consolidation and the formation of giant monopolies like Wal-mart that have driven small business out of business all over this country. They flooded the market with cheap goods alright but from third world nations using subsistence level workers which none of the industrialized nations can compete with and goods manufactured with out quality control and of substandard quality… if not outright deadly consequences. Mmmmm great toothpaste… enjoy the anti-freeze and give the gift that keeps on giving… lead tainted toys and food!
This has resulted in the loss of millions of high paying blue collar manufacturing jobs and millions of white collar jobs as well, out of control Trade and Budget deficits, a redistribution of wealth in this society not since the 1920s, and the wholesale destruction of the middle class in America. Economist like Paul Krugman call this period, “The Great Divergence”:
http://krugman.blogs.nytimes.com/2007/09/18/introducing-this-blog/
The Illusion of Prosperity:
Advocates or Free Trade, supply side economics, and the “trickle down” failed theory, like yourself always come back to the argument about “How wealth is created”, but a look at the record reveals that this was smoke and mirrors built on the illusion of prosperity built on the back of Reagan and Bush’s “Borrow and Spend” policies… entirely financed through debt.
Reagan and Bush have raised the national debt to 9.6 Trillion dollars and accelerating. They relaxed lending practice regulations for financial institutions for credit cards and mortgages to create the illusion of wealth and win elections. What they have created is the greatest nation of debtors in the history of the world.
You’ve talked about how educated you are on monetary policy… Economist Thomas Palley has some additional education for you:
Excerpts:
http://commentisfree.guardian.co.uk/thomas_palley/2008/02/the_debt_delus...
So Drew... your claims about the Fed and monetary policy just didn't go far enough in your analysis to get at the root of the problem.
The Sup-prime bubble was in reality a giant worldwide "ponzi scheme" that went "pop" as all of them eventually must. Bush has tapped out his Uncle Sam Credit card and Reagan's "the shining city on the hill" just got its first default notice on its mortgage!
This is yet another aspect of the Bush administration using the preemption to thwart consumer interests. See also http://www.dailykos.com/story/2008/2/14/202551/066/617/457043 for stuff on FDA preemption.
hareli @ 83:
Major round of applause to you hareli on the Glass-Steagall Act repeal during the Clinton Presidency. I first heard about that last week in a talk show of economists and the one mentioning it was projecting a possible depression because of it.
Mind you... Reagan and Bush are much more responsible than Clinton and when Clinton did try, with his Secretary of the Treasury, to get congress to review corporate accounting procedures the Dinos in congress joined in with the Rethugs and resisted any government over-sight or "interference"... all to the chant of "Free market", "Free market."!
The charge in the Senate was led by none other than Joe Lieberman.
Also notice that Palley doesn't spare Clinton in his article.
Rasputin @ 98:
Thanks, Rasputin, but if you really want to read an informative timeline of how this came about, read this produced by PBS' Frontline. It should make you sit up a little. For the first time, when I read it about six months ago, I understood how much the Clinton shenanigans damaged our national attention, and the future financial security of the country and the world. When I hear Hillary spout how financially well off her husband left us, I cringe in fear at her cavalier ignorance. She has no grasp of the consequences of what Bill did after 12 attempts in 25 years to get it done. At least McCain has the decency to say he understands zip about economics. And Obama was in Chicago where the great Fed debate about how the repeal of the Glass-Steagall would severely weaken the Community Reinvestment Act was raging.
The Long Demise of Glass-Steagall
More, Rasputin . . . economist Robert Kettner (sp?) railed at Bill Clinton not to do it, and warned him it could produce a depression if mismanaged.
Typo: Kuttner
Two points: 1. Read today in USA Toadie that Automobile and Truck repossessions in the US are at highest level in a decade. Especially fancy pick-up trucks... (construction biz bottomed out)
{CLIP}
"Repo lots overflow with reclaimed cars
Car and truck repossessions this year are headed for the highest level in at least a decade, thanks to easy credit and a faltering economy, says an economist for one of the largest wholesale auto auction services.
So many vehicles are being snatched from owners who stop making payments that some repo operators and auto auctioneers say lots are overflowing...
http://www.usatoday.com/money/autos/2008-02-13-repo-man_N.htm
2. Within the capitalist system, there are two fundamental ways to make money:
You can work FOR money - OR - Money can work FOR you. Most of us fall into the first category - i.e. we perform work for money.
On the other hand, the ruling classes, the elite, the Bushites and their enablers, are all in the second group: their money WORKS FOR them. Their investments earn money for them therefore they do not need to work and they cannot understand what it MEANS to have to work to get money.
Consequently the economic downturn we are witnessing, and lamenting on this page, does NOT affect them in the same manner it that it affects those who must HAVE work to GET money. Certainly the economic slowdown WILL affect the value and the returns of their investments but that will, for the vast majority of them, simply mean smaller numbers on their quarterly earnings statements. They will still hang on to their yachts, their planes, their limos and their luxury homes inside their gated communities. Expecting them to "care" what happens to the rest of us is a childish dream. They are so insulated they cannot even understand the situation for the rest of us. It is the classic "Let them eat cake!" situation.
uh...mark? @ 102:
Yup! The repossessions are a part of "the illusion of prosperity financed by debt" that I wrote about above, but it is only a symptom... one of many!
In the last month we saw AT&T take a major write down of its projected earnings by $440 million because of "disconects for non-payment" specifically in California and Florida where the sub-prime collapse has hit the hardest.
Amex also took a major write down in its projected earnings due to credit card defaults in the same states. The financial community freaked because AMEX traditionally has had very high and strict credit standards... much higher than most credit card banks and the fact that they had such heavy defaults caused the market to plunge -300 on that day.
What it shows is that all economic strata are being effected by the sub-prime crisis... lots of well off people used them in speculative ventures buying multiple properties to try and flip them and got caught. They used their credit cards to try and hold out to sell the houses and couldn't.
Truth be known... there isn't one sector of our economy and our financial institutions that isn't being effected by this mess.
Perhaps Spitzer's attempt to blame the entire subprime crisis on Bush is designed to distract attention away from all the lobbyists inside his inner circle, one with ties to the financial industry no less.
http://www.nytimes.com/2007/12/24/nyregion/24lobby.html?pagewanted=1&_r=1
hareli @ 100:
There are three things that I can not forgive Bill Clinton for:
1. Being stupid enough to get caught having an intern give him a BJ.
2. NAFTA... a huge mistake for the US and Mexico.
3. Repeal of the Glass-Steagall Act.
However, trying to make it appear that Clinton was responsible for the recession and pending depression alone is a distortion of the facts. The "Free Market" and deregulation movement has been at work for the last twenty-five years and it started with Reagan and has been grossly aggravated by Bush and his further dismantling of safeguards that the states had in place as Spitzer's article bears witness too.
I do not have a great deal of confidence in Obama either since I have two articles on him where he asserts his belief in "free market" principles and acted on them in the funding debates on the emergency fuel oil act (LIHEAP) and he has the least amount of assistance for the sub-prime foreclosure victims and stated that free market principles were at the heart of his position in the last debate.
As Palley pointed out... the US has been living in a debt delusion for the last twenty-five years because of Reagan and it has come to be seen as gospel by many. Many of the Obama supporters are from a libertarian branch and are on this site almost everyday spouting their free market non-sense and I find it all a bit scary for the reasons outlined in my post above.
I've been researching this mess and examining causes for the last two years and at this point I'm convinced that at the very least we are headed for a very long and very deep recession. The NYT board released a report:
http://theboard.blogs.nytimes.com/2008/01/30/casualties-of-the-possibly-...
Given that 2.2 million homes went into foreclosure last year and that number is due to increase geometrically this year, adding a million "prime loans" that are due to reset in 2009, and that my research has uncovered a whole commercial real-estate side of the sub-prime debacle that hasn't even surfaced yet...
I don't see how we can avoid the double digit down-turn scenario the NYT board projects at the minimum. The defining point will be can the financial institutions be cushioned significantly enough to prevent a cascade and that remains to be seen.
The congressional stimulus package is like shooting a spitball at a tidal wave. Bush's new Foreclosure package will soften some impacts to the financial institutions, but it seems like too little too late.
I don't fully understand it yet because not all of the details have been released, but the Chinese, Japanese, and the Saudis have jumped up and began pouring cash into all of the financial institutions by buying large segments of them. They are terrified because of the huge amount of investments they have and they are afraid that if the banking system goes down... they are going to lose big time.
On the flip side of this... what impacts having the Chinese, Japanese and Saudis controlling large segments of our financial institutions... I can't even begin to imagine!
This is a totally unique time in the history of the world and we are seeing things happen that have never before occurred. I'm not sure that either Hillary or Obama are up to dealing with the consequences of what is to come and as to political ramifications... after 1929 happened... came 1933 Germany and the demons of chaos.
peaceful easy feeling @ 104:
Nah! The law suits against NY and the state statutes they attacked speak volumes even if Spitzer wrote nothing. It is a vital key in the sub-prime debacle that effects all of the states, not just New York.
As to Spitzer... he is a politician like any politician and if you really want to see something scary, go to open secrets.org and look at who the banks and financial institutions have donated to... everyone... Obama... Clinton... Edwards... McCain. Name a politician and they have been stuffing cash in their pockets.
hareli @ 100:
I looked at your PBS timeline link and its good stuff. I was wondering though about this post... can you source it for me. The PBS timeline doesn't mention this.
I remember numerous conversations several years ago with different blue collar workers about how when Adjustable Rate Mortgages (ARMs) reset there would be a wave of foreclosures. It is frankly incredible that people who have no career expertise could see the writing on the wall and yet the CEOs of banks (who are literally paid over 1,000 times as much) play at being oblivious. The heads of banks are carrying out a con game aren't they? Or were they foolish?
Now they are resorting to usurous un-Christian interest rates and accepting Chrystler-style handouts . The interbank rate drops and when I apply for a mortgage the interest rate is higher than it was three months ago. I may as well put my buying aspiration on hold until home prices become more affordable.
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