What is the real cause of the present financial crisis?

Carl Spitzer cwsiv_2nd at HOTPOP.COM
Wed Dec 10 08:47:37 MST 2008


 
What is the real cause of the present financial crisis?
Jim Bramlett
Sep 30 2008 10:08AM


What has been the cause of the current financial crisis? 

Americans need to know the truth and we do not need political
grandstanding and false accusations.

The problem started when Jimmy Carter and the Democrats passed The
Community Reinvestment Act of 1977, designed to help low-income people
get homes.  Not a bad idea, but in 1995, Bill Clinton and the Democrats
made changes to that act, giving massive new and irresponsible
provisions for government-secured sub-prime loans.  This got totally out
of hand.  Both President Bush and John McCain have tried to correct the
problem but were shot down by Democratic opposition, such as by Chris
Dodd and Barney Frank. 

Both Chris Dodd and Barack Obama received big money from the mortgage
lenders.  According to the L.A. Times, "Obama is the recipient of the
largest individual money, at $111,849, according to federal campaign
finance reports compiled by Times researcher Maloy Moore."


For an excellent overview of the situation, see 9-minute video at
http://www.youtube.com/watch?v=TxgSubmiGt8

Now, the Democrats are trying to blame George Bush for the whole
problem.  They and their ilk seem to have no conscience whatsoever.

Here is a quick look into three former Fannie Mae executives who have
brought down Wall Street.
 

        
        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 irregulaties in
        Fannie Mae's accounting activities. At the time of his departure
        The Wall Street Journal noted, ' Raines, who long defended the
        compan y'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 negle cting 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 a
        nd 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 miss-stated 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.

Howard's Golden Parachute 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.


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 is Senior Obama Finance Advisor and was selected to
run Obama's Vice Presidential Search Committee
 

OBAMA PLANS ON CLEANING UP THE MESS? 

Does all this smell to you?

Would you trust the men who tore Wall Street down to build the New Wall
Street? 


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