The last straw

[Al_U_Card]

If you get what you desereve....the people of the U.S. must be pretty evil to have deserved this den of thieves they call a government.

 

The $200 billion bail-out for predator banks and Spitzer charges are intimately linked

 

Greg Palast 3/14/08 - Reporting for Air America Radio’s Clout

 

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.'

 

http://peaceandjustice.org/article.php/20080314092812540

[Winstonm]

Loyalty has been substituted for patriotism.

[jtfanclub]

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.

First?

 

That's gotta be the third time this century alone that the U.S. government has spent that much in today's dollars to guarantee bad loans by banks. And there was at least twice the previous century.

 

You know that FDIC Insured to 100K savings account you have? That was the result of one of those bailouts.

[Al_U_Card]

Holy Silverado S&L (another Bush debacle).

 

His reference was to the fact that the institution (BS) does not have savings accounts. It is strictly an investment bank (unlike JPMC).

 

The trillions is maybe only in current dollars.... :)

[whereagles]

Bush, Cheney, Rice, Rumsfeld, etc. all lied 1000+ times about eye-rak. And the governor must step down for cheating on his wife?

 

Around here, he'd get reelected; 100% guranteed :)

[Trinidad]

Bush, Cheney, Rice, Rumsfeld, etc. all lied 1000+ times about eye-rak. And the governor must step down for cheating on his wife?

 

Around here, he'd get reelected; 100% guranteed :)

Bill got elected, while it was known that he had cheated on his wife. Then he 'recheated' while in the White House... and he got reelected.

 

Rik

[blackshoe]

He's a Democrat.

[cherdano]

Bush, Cheney, Rice, Rumsfeld, etc. all lied 1000+ times about eye-rak. And the governor must step down for cheating on his wife?

That's not quite the story. He had to resign because he was caught in hypocrisy.

[jdonn]

Bush, Cheney, Rice, Rumsfeld, etc. all lied 1000+ times about eye-rak. And the governor must step down for cheating on his wife?

That's not quite the story. He had to resign because he was caught in hypocrisy.

And because it was with a prostitute, which is illegal.

[luke warm]

Bush, Cheney, Rice, Rumsfeld, etc. all lied 1000+ times about eye-rak. And the governor must step down for cheating on his wife?

That's not quite the story. He had to resign because he was caught in hypocrisy.

And because it was with a prostitute, which is illegal.

actually i think there's much more to it than that... he's under investigation for using public funds for his semi-private indiscretions... the feds are now involved

[Al_U_Card]

Anything to protect those under investigation for financial improprieties......as once again, the sheople get golden fleeced. :blink:

[skjaeran]

Bush, Cheney, Rice, Rumsfeld, etc. all lied 1000+ times about eye-rak. And the governor must step down for cheating on his wife?

That's not quite the story. He had to resign because he was caught in hypocrisy.

And because it was with a prostitute, which is illegal.

Huh, I thought hiring a prostitute was legal in US.

 

I thought he had a prostitute come across a state border, which for some reason IS illegal.

 

Maybe I misunderstood the case - it's not very interesting to me, so I haven't followed it closely.

[jtfanclub]

Huh, I thought hiring a prostitute was legal in US.

Hiring a prostitute in the U.S. is only legal in Nevada (but not Los Vegas).

 

Just clarifying for those bridge players from outside the country who come to visit. We're a fairly provincial country, and foreigners who come here and offer our women money for sex may be treated much more harshly than Joe Businessman who has lots of ties to the community. And God help you if the prostitute turns out to be a minor.

[fred]

Hiring a prostitute in the U.S. is only legal in Nevada (but not Los Vegas).

Fortunately you can hire a bridge pro is Las Vegas :)

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

[kenberg]

Hiring a prostitute in the U.S. is only legal in Nevada (but not Los Vegas).

Fortunately you can hire a bridge pro is Las Vegas :)

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

Some years back a non-bridge playing friend asked how bridge players could earn a living since, unlike poker, there is no pot to win. I explained about bridge pros, she listened carefully, and said "I see, sort of a bridge gigolo".

 

I am trusting that you take this with the good humor that is intended.

[fred]

Hiring a prostitute in the U.S. is only legal in Nevada (but not Los Vegas).

Fortunately you can hire a bridge pro is Las Vegas :)

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

Some years back a non-bridge playing friend asked how bridge players could earn a living since, unlike poker, there is no pot to win. I explained about bridge pros, she listened carefully, and said "I see, sort of a bridge gigolo".

 

I am trusting that you take this with the good humor that is intended.

Of course - I was the one who started the hooker/bridge-pro analogy.

 

But for the record I do believe that many bridge pros are more like teachers than they are like hookers and that hiring such pros is a fun and effective way to learn and improve.

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

[kenrexford]

I really like the analogy.

 

If you hire a bridge pro, they are expected to compliment you on your skills even if they are lousy, and to pretened they enjoyed the whole experience.

 

If, in contrast, you happen to play with someone who is a bridge pro, but you do not pay them, then they nag at you the entire time you are together, point out all of your faults, drive you nuts, and make you start looking longingly at other possible partners.

 

Hmmm.

[kenberg]

We all get these barbs. I'm a retired college prof. Some years back, on the op-ed page during some other sex scandal, the writer observed that hookers were like professors only hookers usually give better value for the dollar. I always hoped to meet him so he could describe the experiences on which this evaluation was based.

[blackshoe]

Hiring a prostitute in the U.S. is only legal in Nevada (but not Los Vegas).

Not entirely correct. See http://en.wikipedia.org/wiki/Prostitution_...e_United_States

 

 

Just clarifying for those bridge players from outside the country who come to visit.  We're a fairly provincial country, and foreigners who come here and offer our women money for sex may be treated much more harshly than Joe Businessman who has lots of ties to the community.  And God help you if the prostitute turns out to be a minor.

 

Or a policewoman. :)

[jtfanclub]

A police woman is OK...you're talking a few days in jail, a big fine, and probably get sent home. It's embarrassing, but you'll survive it.

 

On the other hand, being a foreigner in the U.S. accused of attempted rape of a minor is, well, that could ruin your life pretty fast.

[Aberlour10]

Hiring a prostitute in the U.S. is only legal in Nevada (but not Los Vegas).

Fortunately you can hire a bridge pro is Las Vegas :)

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

Some years back a non-bridge playing friend asked how bridge players could earn a living since, unlike poker, there is no pot to win. I explained about bridge pros, she listened carefully, and said "I see, sort of a bridge gigolo".

 

I am trusting that you take this with the good humor that is intended.

Of course - I was the one who started the hooker/bridge-pro analogy.

 

But for the record I do believe that many bridge pros are more like teachers than they are like hookers and that hiring such pros is a fun and effective way to learn and improve.

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

In the early days of online bridge, I think it was in winter 2001 I started to play at the first polish bridge site owned by a local software company. They sponsored at that time the league team of the actually best WBF ranked polish professionals, He went several times a week online, and everybody had the possiblity to play for free a few hands with the Champion. He was very patient with all us rookies :unsure: players and kibbers had so much fun.. I can't remember since that to join to the table "loaded" with so much humor ... hah good old days :)

 

Robert

[blackshoe]

A police woman is OK...you're talking a few days in jail, a big fine, and probably get sent home. It's embarrassing, but you'll survive it.

 

On the other hand, being a foreigner in the U.S. accused of attempted rape of a minor is, well, that could ruin your life pretty fast.

Being an American in the US in that situation will do the same thing. Unless you have enough political pull to get it swept under the rug, which few do.

[Al_U_Card]

Not swept under the rug! Never REVEALED!!! They are all inebriated on the power that they wield. They all do pretty much whatever they want to. Only when they "endanger" the established order or are being a "bother" do they "suddenly" get caught. :)

[blackshoe]

You have an interesting world view, Al. Is there anything that isn't a conspiracy? :-)

[jtfanclub]

Being an American in the US in that situation will do the same thing. Unless you have enough political pull to get it swept under the rug, which few do.

Well, I can't say I've tried it. But I don't think there are too many locals spending 3 to 5 years in jail for soliciting an underage prostitute. I'd think that'd hit the papers.