The savings and loan debacle was one-seventieth the size of the
current crisis, both in terms of losses and the amount of fraud. In that
crisis, the savings and loan regulators made over 30,000 criminal
referrals, and this produced over 1,000 felony convictions in cases
designated as “major” by the Department of Justice. But even that
understates the degree of prioritization, because we, the regulators,
worked very closely with the FBI and the Justice Department to create a
list of the top 100 — the 100 worst fraud schemes. They involved roughly
300 savings and loans and 600 individuals, and virtually all of those
people were prosecuted. We had a 90 percent conviction rate, which is
the greatest success against elite white-collar crime (in terms of
prosecution) in history.
In September 2008 Joseph Stiglitz stated that Greenspan "didn't
really believe in regulation; when the excesses of the financial system
were noted, (he and others) called for self-regulation – an
oxymoron." Greenspan, according to The New York Times, says he
himself is blameless.
In Congressional testimony on October 23, 2008, Greenspan finally
conceded error on regulation. The New York Times wrote, "a humbled Mr.
Greenspan admitted that he had put too much faith in the self-correcting
power of free markets and had failed to anticipate the self-destructive
power of wanton mortgage lending. ... Mr. Greenspan refused to accept
blame for the crisis but acknowledged that his belief in deregulation
had been shaken." Although many Republican lawmakers tried to blame the
housing bubble on Fannie Mae and Freddie Mac, Greenspan placed far more
blame on Wall Street for bundling subprime mortgages into securities.
clearly they failed to manage things in the best interest of the country.
completely devoid of any fraud
Not to mention that Eric Holder prosecuted big banks (that even
donated to Obama campaign) such as J.P. Morgan for record-breaking $13
billion. But of course no one remembers that because a banker wasn't put
in a physical prison for a non-violent crime.
It's not a government conspiracy and it's not a corporate conspiracy
It's not like those big banks didn't lose lots of money during the
crisis. THEY DID. Then to turn around and prosecute them for fraud when
they didn't even try to defraud anyone and they abide by the laws while
they lost tons of money during 2008 themselves.
tell me then why 50% of the WORLD POPULATION makes less than $2 per day.
Tell me why we usually install dictators, not democratic systems, in
the nations we invade (it's because they will maintain their borders,
protect resources that they sell to us cheaply
Tell me why we assassinate those who aren't corrupted by our bribery.
Tell me why the ex-prime minister of Iraq, who OUR invasion and OUR
new government resulted in in 2006, helped to radicalize many Muslims
against not only our government,
tell me then why 50% of the WORLD POPULATION makes less than $2 per day
"That is absolutely untrue. Where did you hear that? Those are the
kind of talking points that, if you actually look at unbiased
statistical data, just don't begin to hold water. Do not ever mistake
actions taken to advance capitalist agendas as a form of aid. There's
only one capitalist agenda, and that is the accumulation of wealth:
profit above all costs, whether human, social, or environmental."
"Until the 1960s, the Aral Sea was fed by two rivers, the Amu Darya
and Syr Darya, which brought snowmelt from mountains to the southeast,
and local rainfall. But in the 1960s the Soviet Union diverted water
from the two rivers into canals to supply agriculture in the region.
With the loss of water, the lake began to recede and its salinity
levels began to rise. Fertilizers and chemical runoff contaminated the
lake bed. As the lakebed became exposed, winds blew the contaminated
soil onto the surrounding croplands, meaning even more water was needed
to make the land suitable for agriculture, according to an Earth
The falling water levels changed the local climate, too. Without the
lake water to moderate temperatures, winters became colder and summers
hotter, the Earth Observatory said."
In fact if somebody tried to charge them with something illegal, they
would have an extremely strong defense that they were actually just
complying with federal laws as written at the time.
they were actually explicitly required by the federal government
under both the 2000 and 2005 Affordable Housing Regulations HUD put out.
The Commission concludes that the collapse of the housing bubble
began the chain of events that led to the financial crisis. High
leverage, inadequate capital, and short-term funding made many financial
institutions extraordinarily vulnerable to the downturn in the market
The investment banks had leverage ratios, by one measure, of up to 40
to 1. This means that for every $40 of assets, they held only $1 of
capital. Fannie Mae and Freddie Mac (the GSEs) had even greater
leverage—with a combined 75 to 1 ratio. Leverage or capital inadequacy
at many institutions was even greater than reported
when one takes into account “window dressing,” off-balance-sheet
exposures such as those of Citigroup, and derivatives positions such as
those of AIG.
The GSEs [Fannie Mae and Freddie Mac] contributed to, but were not a
primary cause of, the financial crisis. Their $5 trillion mortgage
exposure and market position were significant, and they were without
question dramatic failures. They participated in the expansion of risky
mortgage lending and declining mortgage standards, adding significant
demand for less-than-prime loans. However, they followed, rather than
led, the Wall Street firms. The delinquency rates on the loans that they
purchased or guaranteed were significantly lower than those purchased
and securitized by other financial institutions.
The Community Reinvestment Act (CRA)—which requires regulated banks
and thrifts to lend, invest, and provide services consistent with safety
and soundness to the areas where they take deposits—was not a
significant factor in subprime lending. However, community lending
commitments not required by the CRA were clearly used by lending
institutions for public relations purposes.
It is simply untrue to argue that the Feds didn't have a primary role
(along with people in the private sector) in creating the mess.
"From 1997 to 2000, 42% of GSE purchases were required to meet goals
for low and moderate-income borrowers. In 2001, the goal was raised to
50%.Mudd said that as long as the goals remained below half of the
GSEs’ lending, loans made in the normal course of business would satisfy
the goals: “What comes in the door through the natural course of
business will tend to match the market, and therefore will tend to meet
the goals.”Levin told the FCIC that “there was a great deal of business
that came through normal channels that met goals” and that most of the
loans that satisfied the goals “would have been made anyway.”
Hempstead, Fannie’s principal contact with Countrywide, told the FCIC
while housing goals were one reason for Fannie’s strategy, the main
reason Fannie entered
the riskier mortgage market was that those were the types of loans being
in the primary market.If Fannie wanted to continue purchasing large
quantities of loans, the company would need to buy riskier loans.
Kenneth Bacon, Fannie’s executive vice president of multifamily lending,
said much the same thing, and added that shareholders also wanted to
see market share and returns rise. Former
Fannie chairman Stephen Ashley told the FCIC that the change in strategy
in 2005 and 2006 was owed to a “mix of reasons,” including the desire
to regain market share and the need to respond to pressures from
originators as well as to pressures from real estate industry advocates
to be more engaged in the marketplace.
The Commission concludes that the business model of Fannie Mae and Freddie
Mac (the GSEs), as private-sector, publicly traded, profit-making companies with
implicit government backing and a public mission, was fundamentally flawed. We
find that the risky practices of Fannie Mae—the Commission’s case study in this
area—particularly from 2005 on, led to its fall: practices undertaken to meet Wall
Street’s expectations for growth, to regain market share, and to ensure generous
compensation for its employees. Affordable housing goals imposed by the Department
of Housing and Urban Development (HUD) did contribute marginally
to these practices. The GSEs justified their activities, in part, on the broad and
sustained public policy support for homeownership. Risky lending and securitization
resulted in significant losses at Fannie Mae, which, combined with its excessive
leverage permitted by law, led to the company’s failure.
Corporate governance, including risk management, failed at the GSEs in part
because of skewed compensation methodologies. The Office of Federal Housing
Enterprise Oversight (OFHEO) lacked the authority and capacity to adequately
regulate the GSEs. The GSEs exercised considerable political power and were successfully
able to resist legislation and regulatory actions that would have strengthened
oversight of them and restricted their risk-taking activities.
In early 2008, the decision by the federal government and the GSEs to increase
the GSEs’ mortgage activities and risk to support the collapsing mortgage market
was made despite the unsound financial condition of the institutions. While these
actions provided support to the mortgage market, they led to increased losses at
the GSEs, which were ultimately borne by taxpayers, and reflected the conflicted
nature of the GSEs’ dual mandate.
GSE mortgage securities essentially maintained their value throughout the
crisis and did not contribute to the significant financial firm losses that were central
to the financial crisis.
has also justified the extra-judicial execution of American citizens
have been used to kill possibly thousands including American citizens
And banks and lenders carried through that fraud to every level of
the mortgage process. They committed origination fraud through faulty
appraisals and undisclosed trickery.
They committed servicing fraud through illegal fees and unnecessary foreclosures.
They committed securities fraud by failing to inform investors of the poor underwriting on loans they packaged into securities.
They committed mass document fraud when they failed to follow the
steps to create mortgage-backed securities, covering up with
fabrications and forgeries to prove the standing to foreclose.
By the time the bubble collapsed, the recession hit and Holder took
over the Justice Department, Wall Street was a target-rich environment
for any federal prosecutor. Physical evidence to an untold number of
crimes was available in court filings and county recording offices.
Financial audits revealed large lapses in underwriting standards as
early as 2005. Provisions in the Sarbanes-Oxley Act, passed during the
last set of financial scandals in 2002, could hold chief executives
criminally responsible for misrepresenting their risk management
controls to regulators.
Any prosecutor worth his salt could have gone up the chain of command and implicated top banking executives.
as no laws were broken
Holder has a mixed legacy: excellent on civil and voting rights
Eric Holder is an incompetent scumbag