A History of the Crisis

This helpful PDF document gives you a rundown on how this whole financial mess came about. Hint, the biggest villains in this mess, are those who are trying to act as the saviors now. They should all burn for this and not be rewarded.

At least McCain is finally trying to fight back.  He’s been letting Obama and the media set the New Reality (Repubs and greedy capitalists were 100% responsible) on this whole fiasco for almost two weeks now, so I’m skeptical he can succeed.  If he doesn’t however, the election is lost to BO.
Some okay stuff in this, but he really needs to take the gloves off:

This crisis started in our housing market in the form of subprime loans that were pushed on people who could not afford them. Bad mortgages were being backed by Fannie Mae and Freddie Mac, and it was only a matter of time before a contagion of unsustainable debt began to spread. This corruption was encouraged by Democrats in Congress, and abetted by Senator Obama.
  Senator Obama has accused me of opposing regulation to avert this crisis. I guess he believes if a lie is big enough and repeated often enough it will be believed. But the truth is I was the one who called at the time for tighter restrictions on Fannie Mae and Freddie Mac that could have helped prevent this crisis from happening in the first place.
  Senator Obama was silent on the regulation of Fannie Mae and Freddie Mac, and his Democratic allies in Congress opposed every effort to rein them in. As recently as September of last year he said that subprime loans had been, quote, “a good idea.” Well, Senator Obama, that “good idea” has now plunged this country into the worst financial crisis since the Great Depression.
  To hear him talk now, you’d think he’d always opposed the dangerous practices at these institutions. But there is absolutely nothing in his record to suggest he did. He was surely familiar with the people who were creating this problem. The executives of Fannie Mae and Freddie Mac have advised him, and he has taken their money for his campaign. He has received more money from Fannie Mae and Freddie Mac than any other senator in history, with the exception of the chairman of the committee overseeing them. Did he ever talk to the executives at Fannie and Freddie about these reckless loans? Did he ever discuss with them the stronger oversight I proposed? If Senator Obama is such a champion of financial regulation, why didn’t he support these regulations that could have prevented this crisis in the first place? He won’t tell you, but you deserve an answer.

Still way to tame, but a good start.  Just probably too late.

Posted by  on  10/06  at  01:59 PM

Sarah is doing more. Traditionally, VP candidates to all the hard attacks so the presidential candidate can seem above it.

Obama is going with the Keating nonsense, which McCain was exonerated on. The Keating five were really 4 Democrats.

Posted by  on  10/06  at  03:42 PM

Jim, sorry for another long comment but this is too juicy to miss:

Here’s a quick look into the 3 former Fannie Mae executives who brought down Wall Street and where they are now.

Franklin Raines was a Chairman and Chief Executive Officer at Fannie Mae. Raines was forced to retire from his position with Fannie Mae when auditing discovered severe irregularities in Fannie Mae’s accounting activities. At the time of his departure The Wall Street Journal noted, “Raines, who long defended the company’s accounting despite mounting evidence that it wasn’t proper, issued a statement late Tuesday conceding that “mistakes were made” and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company’s books ran afoul of generally accepted accounting principles for four years.” Fannie Mae had to reduce its surplus by $9 billion.
Raines left with a “golden parachute valued at $240 Million in benefits. The Government filed suit against Raines when the depth of the accounting scandal became clear. (http://housingdoom.com/2006/12/18/fannie-charges/) The Government noted, “The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles and misleading the regulator and the public. The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner.” These charges were made in 2006. The Court ordered Raines to return $50 million dollars he received in bonuses based on the misstated Fannie Mae profits.

Tim Howard - Was the Chief Financial Officer of Fannie Mae. Howard “was a strong internal proponent of using accounting strategies that would ensure a “stable pattern of earnings” at Fannie.” In everyday English - he was cooking the books. The Government Investigation determined that “Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae.”

On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investigate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant’s income statement to achieve management pay bonuses. Investigations by federal regulators and the company’s board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses. Raines and Howard resigned under pressure in late 2004.
Tim Howard’s Golden Parachute to soften his landing from leaving Fannie Mae was estimated at $20 Million!

Jim Johnson - A former executive at Lehman Brothers and who was later forced from his position as Fannie Mae CEO. A look at the Office of Federal Housing Enterprise Oversight’s May 2006 report on mismanagement and corruption inside Fannie Mae, and you’ll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson’s 1998 compensation from the public, reporting that it was between $6 million and $7 million when it fact it was $21 million.” Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae.
Johnson’s Golden Parachute was estimated at $28 Million.

More importantly–WHERE ARE THEY NOW?

FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor.

TIM HOWARD? Howard is also a Chief Economic Advisor to Obama.

JIM JOHNSON? Johnson was hired as a Senior Obama Finance Advisor and was selected to run Obama’s Vice Presidential Search Committee.

And the attempt to tar McCain with the Keating brush is going to backfire big time, since they have that quote from the Democrat in charge of the investigation saying McCain was innocent and was only left in the group so there would be at least one Republican.

Posted by  on  10/06  at  07:48 PM

How about this outrage?

In the 1990’s, Barney Frank’s efforts to deregulate Fannie Mae may have been a serious conflict of interest because his lover, Herb Moses, was an executive for Fannie Mae at the time Frank’s was on the House Banking Committee, which had jurisdiction over Fannie Mae.

The media didn’t report it at the time. As usual, Democrats can murder interns and break laws all over the place and the press will shrug. If a Republican jaywalks they call for senate hearings.

Posted by  on  10/06  at  11:31 PM
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