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SDR
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Joined: 02 Oct 2004
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Richard Haut
millennium club
Joined: 18 Apr 2004
Posts: 1115
Location: Nice, France
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 Posted: Fri Mar 14, 2008 7:22 am Post subject: |
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| Quote: | The $200 billion bail-out for predator banks and Spitzer charges are
intimately linked
By Greg Palast
Reporting for Air America Radio’s Clout
Listen to Palast on Clout at
href="http://mailings.gregpalast.com//lt/t_go.php?i=71&e=MzM3MTI=&l=-http--www.GregPalast.com">www.GregPalast.com
/>
While New York Governor Eliot Spitzer was paying an
‘escort’ $4,300 in a hotel room in Washington, just down the road, George Bush’s
new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst
with mortgage bank industry speculators.
Both acts were wanton, wicked and lewd. But there’s
a BIG difference. The Governor was using his own checkbook. Bush’s man Bernanke was using
ours.
This week, Bernanke’s Fed, for the first time in its history, loaned a selected
coterie of banks one-fifth of a trillion dollars to guarantee these banks’
mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very
banking predators who have brought two million families to the brink of foreclosure.
Up until Wednesday, there was one single, lonely politician who stood in the way of this
creepy little assignation at the bankers’ bordello: Eliot Spitzer.
Who are they kidding? Spitzer’s lynching and the bankers’ enriching
are intimately tied.
How? Follow the money.
The press has swallowed Wall Street’s line that millions of US families are about
to lose their homes because they bought homes they couldn’t afford or took loans too big for
their wallets. Ba-LON-ey. That’s blaming the victim.
Here’s what happened. Since the Bush regime came to power, a new species of loan
became the norm, the ‘sub-prime’ mortgage and it’s variants including loans with
teeny “introductory” interest rates. From out of nowhere, a company called
‘Countrywide’ became America’s top mortgage lender, accounting for one in five
home loans, a large chuck of these ‘sub-prime.’
Here’s how it worked: The Grinning Family, with US average household income, gets a
$200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No
problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in
two years, the promise ain’t worth a can of spam and the Grinnings are told to scram - because
their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to
recover the “discount” they had for two years. Suddenly, payments equal 42% to 50% of
pre-tax income. Grinnings move into their Toyota.
Now, what kind of American is ‘sub-prime.’ Guess. No peeking. Here’s
a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of
similar-income Whites. Dark-skinned borrowers aren’t stupid – they had no choice.
They were ‘steered’ as it’s called in the mortgage sharking
business.
‘Steering,’ sub-prime loans with usurious kickers, fake inducements to
over-borrow, called ‘fraudulent conveyance’ or ‘predatory lending’ under US
law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by
federal regulators and state laws as nothing more than fancy loan-sharking.
But when the Bush regime took over, Countrywide and its banking brethren were told to
party hardy – it was OK now to steer’m, fake’m, charge’m and
take’m.
But there was this annoying party-pooper. The Attorney General of New York, Eliot
Spitzer, who sued these guys to a fare-thee-well. Or tried to.
Instead of regulating the banks that had run amok, Bush’s regulators went on the
warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented
use of the legal power of “federal pre-emption,” Bush-bots ordered the states to NOT
enforce their consumer protection laws.
Indeed, the feds actually filed a lawsuit to block Spitzer’s investigation of ugly
racial mortgage steering. Bush’s banking buddies were especially steamed that Spitzer
hammered bank practices across the nation using New York State laws.
Spitzer not only took on Countrywide, he took on their predatory enablers in the
investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner,
Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup’s
Citibank made mortgage usury their major profit centers. They did this through a bit of financial
legerdemain called “securitization.”
What that means is that they took a bunch of junk mortgages, like the Grinnings, loans
about to go down the toilet and re-packaged them into “tranches” of bonds which were
stamped “AAA” - top grade - by bond rating agencies. These gold-painted turds were sold
as sparkling safe investments to US school district pension funds and town governments in Finland
(really).
When the housing bubble burst and the paint flaked off, investors were left with the poop
and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will
‘earn’ a $77 million buy-out bonus this year on top of the $656 million - over half
a billion dollars – he pulled in from 1998 through 2007.
But there were rumblings that the party would soon be over. Angry regulators, burned
investors and the weight of millions of homes about to be boarded up were causing the sharks to
sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf
sheiks who now control its biggest share blocks.
Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went
bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable
partners, former and past: George Bush, the Bin Laden family and more dictators, potentates,
pirates and presidents than you can count.
The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little
suffering bankers. They got the public treasure – and got to keep the Grinning’s
house. There was no ‘quid’ of a foreclosure moratorium for the ‘pro quo’ of
public bail-out. Not one family was saved – but not one banker was left behind.
Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock
rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an
afternoon.
And that very same day the bail-out was decided – what a coinkydink! – the
man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced.
Do I believe the banks called Justice and said, “Take him down
today!” Naw, that’s not how the system works. But the big players knew that
unless Spitzer was taken out, he would create enough ruckus to spoil the party. Headlines in the
financial press – one was “Wall Street Declares War on Spitzer” - made clear to
Bush’s enforcers at Justice who their number one target should be. And it wasn’t Bin
Laden.
It was the night of February 13 when Spitzer made the bone-headed choice to order
take-out in his Washington Hotel room. He had just finished signing these words for the
Washington Post about predatory loans:
“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 he federal government was turning a blind
eye.”
Bush, said Spitzer right in the headline, was the “Predator Lenders’ Partner
in Crime.” The President, said Spitzer, was a fugitive from justice. And Spitzer was in
Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the
planet.
Spitzer wrote, “When history tells the story of the subprime lending crisis and
recounts its devastating effects on the lives of so many innocent homeowners the Bush administration
will not be judged favorably.”
But now, the Administration can rest assured that this love story – of Bush and his
bankers - will not be told by history at all – now that the Sheriff of Wall Street has fallen
on his own gun.
A note on “Prosecutorial Indiscretion.”
Back in the day when I was an investigator of racketeers for government, the federal
prosecutor I was assisting was deciding whether to launch a case based on his negotiations for
airtime with 60 Minutes. I’m not allowed to tell you the prosecutor’s name,
but I want to mention he was recently seen shouting, “Florida is Rudi country! Florida is Rudi
country!”
Not all crimes lead to federal bust or even public exposure. It’s up to something
called “prosecutorial discretion.”
Funny thing, this ‘discretion.’ For example, Senator David Vitter,
Republican of Louisiana, paid Washington DC prostitutes to put him diapers (ewww!), yet the Senator
was not exposed by the US prosecutors busting the pimp-ring that pampered him.
Naming and shaming and ruining Spitzer – rarely done in these cases - was made at the
‘discretion’ of Bush’s Justice Department.
Or maybe we should say, 'indiscretion.'
************
Greg Palast, former investigator of financial fraud, is the author of the New York Times
bestsellers
href="http://mailings.gregpalast.com//lt/t_go.php?i=71&e=MzM3MTI=&l=-http--www.gregpalast.com/order-the-book">Armed
Madhouse and
href="http://mailings.gregpalast.com//lt/t_go.php?i=71&e=MzM3MTI=&l=-http--www.palastinvestigativefund.org/the-best-democracy-money-can-buy-extended-election-version">The
Best Democracy Money Can Buy.
Hear The Palast Report weekly on
href="http://mailings.gregpalast.com//lt/t_go.php?i=71&e=MzM3MTI=&l=-http--airamerica.com/clout/">Air
America Radio’s Clout.
And next Wednesday March 19, join Palast and Clout host Richard Greene on a dinner cruise
on the Potomac River. For more information click
href="http://mailings.gregpalast.com//lt/t_go.php?i=71&e=MzM3MTI=&l=-http--www.airamerica.com/clout/cloutcruise">here.
And this Sunday, at noon, on WABC-TV New York, catch Amy Goodman, Les Payne and Greg
Palast on Like It Is with Gil Noble. |
_________________
Richard Haut has worked with the architectural profession for over 25 years and produces the weekly Richard Haut's Competitions, which has given architects details of many thousands of projects for which they can apply across Britain and Europe. |
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Ed Ziomek
Joined: 07 Jun 2005
Posts: 460
Location: Stamford, Connecticut
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| Posted: Fri Mar 14, 2008 10:41 am Post subject: Spitzer was no saint. 500 Johns, only one gotcha? |
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Rich...
First of all, an amazing read, but I have personal BAD history with Mr. Eliot and his cronies, but that was a mere pittance problem of let us say, a $20 million dollar per year interstate tax scam that still exists and has crushed me, and may kill me - (or get me killed, no lie!)
I can only guess that the company I worked for, international presence, falsifying 1099s, that I complained to the FBI, and the Tax Fraud units of two different states, was actually pimping (in the literal sense) for "celebrities" let us say, in exchange for official contracts. I can only guess who is involved, but with this latest news, puzzle pieces fall into place. Basically..."Not really interested" is the amazing response I got from everyone, including Herr Spitz. Corporations with big bucks are entitled to cheat, unless they are Democrats? Not yes, Hell YESSSSSSS!
Herr Spitz was known for making friendly visits... requesting donations in the face of all these terrible things he was finding out about questionable activity in YOUR COMPANY!
Having said all that, I am amazed that this prostitution service probe, with 500 clients, is focusing all on a 24 year old female and a singular politician. Perchance, are there any Republican offenders among the missing 499? No chance!
And that this politician is friends with, and relatively close neighbors to, and publicly supporting... drum roll, Hillary Clinton! Geeeez, Lou-eeese!
The word on the street... they went after Bernie Kerik to get to Rudy, for such devastating crimes, among others, as .. illegal house keeper (lowest charge), and accepting bribes and contracting work (highest charge). Scandalous! Chop him into four pieces...ship him to Alcatraz!
Now the word is... they went after Herr Spitz to get....hmmmmmmm?
It is just soooooo co-in-ci-dental!
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Ed Ziomek |
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Ed Ziomek
Joined: 07 Jun 2005
Posts: 460
Location: Stamford, Connecticut
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| Posted: Fri Mar 14, 2008 11:40 am Post subject: Horrifying Truth: Politics and Corruption, Power and Money |
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In the topic of May 2007, also from SDR...
"2004 Ashcroft NSA Drama"
It was my quote that I mentioned.... "Filthy Top to the Filthy Bottom"
To describe American politics and the Judicial system as a cesspool is being too kind. It is a morgue, a slaughterhouse of hope and innocence and human beings. Why we insist on telling the world about American "Freedom and Democracy" is such hypocrisy.
My response of May 25, 2007...
"The big news is the death of the checks and balances, the independent judiciary from the executive and the legislative.
We are watching the collapse of the American system of checks and balances, - almost entirely, from the Supreme Court, to the Federal Appeals Court, to the State Courts, to Civil and Criminal Courts, to Family Court, to Traffic Court, it is all "for sale". The ordinary citizen cannot afford to buy the lawyer to defend himself anymore. It is utter chaos and corruption, filthy top to filthy bottom.
I think it has been this way throughout history...governments rise to a level of disfunction, greed, corruption and political domination by the wealthy and brutal...then that culture collapses.
There are no checks and balances anymore."
The only weapon we have as ordinary citizens of the world, is to PUBLICIZE the inequities, or PERISH!!!
On the scale of things, Spitzer was a little fish. He didn't figure in the death of a million people, and destabilizing an entire region of the world.
He didn't torture a human being like at Abu Ghurab.
There is sooooo much more I have to add on this topic, I almost have to go away and keep my mouth shut, for all that I know, for all that I have witnessed.
_________________
Ed Ziomek |
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Richard Haut
millennium club
Joined: 18 Apr 2004
Posts: 1115
Location: Nice, France
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| Posted: Fri Mar 14, 2008 11:49 am Post subject: |
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Ed, I agree that Spitzer seems to be a little fish - and not a very clean one.
did you hear that one of the most senior British policemen - the Chief Constable of Greater Manchester - was "found dead".
family man, aged 50 - cause of death ? ahhhh - they haven't decided on that yet.
the world is getting ridiculous.
let's be careful we don't end up in the situation of saying "perhaps Bush and Blair weren't that bad after all ...". They are that bad; they were that bad - and so are all these other sleazes.
I turned on the TV yesterday and it was about people who lived in a tent-shanty. Where was this place ? California ..... these are people already kicked out of their homes, lots and lots and lots of them.
anybody read John Steinbeck these days ?
_________________
Richard Haut has worked with the architectural profession for over 25 years and produces the weekly Richard Haut's Competitions, which has given architects details of many thousands of projects for which they can apply across Britain and Europe. |
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