Stmarie’s Weblog

2012 Election Information

An Open Letter to Michael Moore 5/21/09 May 22, 2009

Mike,

Before you begin your movie on the economy continuing to bash George W you should read these two pages from the Federal Register.

http://bulk.resource.org/gpo.gov/register/2005/2005_10024.pdf

And

http://bulk.resource.org/gpo.gov/register/2005/2005_10025.pdf

Section C & D

This will explain to you the kindling point when in 1997 Bill Clinton expanded Jimmy Carter’s 1977 Community Reinvestment Act. (60 FR 22156–57)

In a nut shell, Bill Clinton mandated that banks make loans a lot easier for people that could not afford homes so that they could buy them anyway.  The usual Socialist Democrat “Creating a land of Entitlement.”

You may also want to read my Blog.

https://stmarie.wordpress.com/2008/09/29/everyday-we-learn-more-about-the-community-reinvestment-act-of-1977/

You will notice that I wrote this entry on September 29, 2008.

You will also notice that almost everything that I predicted about Barack Obama came to be true including the relentless blaming of George W. for all the problems with the economy when it was really Bill Clinton that started it in 1997. I will admit that George W. did not battle hard enough against the Democrats in 2004 to prevent the total meltdown of the economy in 2007-2008.

I will bet that you will mention absolutely nothing about what Bill Clinton did in your movie and if you do it will be one line with no coverage of his blunder at all.

This act that Bill Clinton did was swept under the carpet and never mentioned on any news cast including Fox News Network. How did I find out? My cousin sent me the “Burning Down the House” video and I was just so blown away that I spent a month researching it before I wrote my blog. When I got to the mandate in the Federal Register I knew that it had really happened and the rest of the puzzle could be put together by a 12 year old.

This is how it plays out. If Bill Clinton had never expanded the CRA in 1997 and mandated that banks write loans to people that could never afford a home to begin with, The banks would have continued to write safe and secure traditional 30 year loans instead of using creative lending practices like 5/25, 2/28, no down payment, Interest only loans etc. The deregulation opened doors to predatory lenders that took advantage of a very dysfunctional, bad law. None of that would have happened and our economy would not be in the condition that it is in today with Barack Obama making worse and worse every day he speaks.

I hope you are intelligent to see this chain of events and now the Socialist/Democratic way of handling the economy will fail just like it did in 1997 with Bill Clinton except a lot worse. We are looking down the barrel of huge taxes, very high interests rates to combat inflation that will be created by printing all this money that doesn’t exist today and 13% to 15% unemployment.  You can’t create jobs with high taxes and excruciating regulations on business. Businesses will not grow or even start to employ people until taxes come way down and restrictions are lifted on corporations to grown and reduce unemployment.

Today Barack Obama continues to use the “Community Reinvestment” theme that failed so miserably in the past.

I hope you are intelligent enough to do your own research and find out more about this.

Thank you,

STMARIE
P. S Nancy Pelosi want to investigate the Bush administration for war crimes, yet she does not want to investigate Bill Clinton for dereliction of duty and crimes against the US economy by providing a mandate that facilitated the destruction of the credibility of the US banking system that eventually spread though out the world.

STMARIE

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An Open letter to Mr. Jeff Baker 3/16/09 March 16, 2009

Mr Baker left a comment on my article:

https://stmarie.wordpress.com/2009/01/18/william-j-bubba-clinton-and-the-economic-democratic-disaster-of-2007-through-2012/

Here is my very positive response to Mr Baker’s comments.

Hi Jeff,

Thank you for the comments. My goal here is not to change anybody’s mind as I would rather get people to do their own research on the candidates they are voting for and not just watch the campaign commercials. My cousin sent me the first video called “Burning down the house” which is on my very first blog.

https://stmarie.wordpress.com/2008/09/29/everyday-we-learn-more-about-the-community-reinvestment-act-of-1977/

Before receiving this video I, like an overwhelming number of Americans especially the young ones. did not know a thing about Jimmy Carter’s Community Reinvestment Act of 1977 and the subsequent expansion of the CRE by Bill Clinton in 1997. As I did my research I needed a concrete government document on what that really was. And I found it at

http://bulk.resource.org/gpo.gov/register/2005/2005_10024.pdf

and

http://bulk.resource.org/gpo.gov/register/2005/2005_10025.pdf
The writing was on the wall as to how we got here today.

Think of the economy as a burned out house. We know that things burned in the house. Couches (Banks), Tables (Loan Industry), Chairs (Real Estate market), Beds (Loan industry), But where was the ignition point that started the fire? I wholly believe that Bill Clinton’s mandate for banks to make it easier for poor people to get loans was the spark and the fuel to start the fire (Economic Meltdown.)

I just wish more people would realize this. The sad part is we have a lot of the same people now in office that believe in a “Land of Entitlement.”

So this train wreck will continue as long as Democrats are in control.

ST

 

Barack Obama’s New Cash Cow Is In Your Hand. February 28, 2009

Gaze fondly at that little device in your hand that is your legacy, your life, your survival. An item that can help you achieve your dreams, your aspirations, your goals in life. Give you the confidence that your family and friends are OK when they answer your call or return your call.

Yes, it is your cell phone.  Barack Obama will make that a huge cash cow to help pay back the trillions that he is spending.  And you won’t have any say in it. As the Telcom companies have to pay these increases in spectrum license user fees, they will be very happy to pass it on to you and voila, a whole new set of fees, surcharges, taxes will magically appear on your cell phone bill.

Keep in mind that first responders in local municipalities will have to pay these fees also on the radio frequency spectrum that they use for Fire, Police, EMT, Haz Mat and other public communication services. The local governments will be glad to pass that on to you in the Real Estate Taxes that you pay in your town or city.

This will also affect commercial broadcasters (TV, Radio etc) who have to pay huge spectrum license fees already. Do you think it ends there? Guess again. It will affect providers of two way radio communications for businesses. Communications for delivery trucks, service companies that do repairs at your home. Telemetry used for businesses like UPS , Fed Ex and common carrier trucking companies to keep track of your packages. Oh did I mention radio services for our railroads, airlines, commercial and passenger ships, buses and other forms of public transportation? All using Radio Spectrum frequencies. But here is the one that I know will be a Huge Cash Cow for Barack Obama.  Guess what is so very popular in our business today?  Yep, Direct Connect or Nextel. What is that going to do to the cost of doing business?

OK, so can you see how we are going to get to 13% inflation or more that Jimmy Carter awarded the citizens of the United States with in 1980? Does this make sense to you now?

http://www.engadget.com/2009/02/28/obamas-proposed-2010-budget-juices-carriers-for-more-cash/

http://news.cnet.com/8301-1035_3-10173072-94.html

The people who voted for this monster called Barack Obama must be very, very wealthy and have a huge pile of cash to pay all these taxes that are in the future.

ST

 

An Open Letter to Senator Barbara Boxer (D) California Sent 2/20/09 February 21, 2009

Dear Senator Boxer,

I appreciate your answer but I have to tell you that you are just following what Barack Obama is telling you without doing any home work.

What Barack Obama has brainwashed you into thinking is the same thing that Jimmy Carter did in the 70’s. It is true that Jimmy Carter gave way to creating a lot of jobs by doing the same thing. But in the long run we ended up with a huge Inflation rate. To combat that out of control inflation the fed took the prime interest rate to 20.39% on July 1, 1981 (Source: http://research.stlouisfed.org/fred2/data/MPRIME.txt ) and Inflation Rate of 13.58% in 1980 (Source: http://www.miseryindex.us/irbyyear.asp).

By the way, Jimmy Carter used the “Misery Index” (http://www.miseryindex.us/) to get elected. The difference here is that Barack Obama has psychologically damaged people so bad as far as consumer confidence that it will be very, very hard to change peoples minds until the light goes on in people’s minds when they finally realize that electing Barack Obama was the most catastrophic that thing that the citizens of the United States could have ever done.

OK, Now here is what I really want to hear your rational on. Let’s talk about Bill Clinton’s expansion of Jimmy Carters Community Reinvestment Act of 1977 that he did in 1997. This mandate led people from all different arenas to develop a ferocious appetite for greed and corruption which in the end caused the mortgage and home market to collapse to what we have today. While it is true that Bill Clinton did not tell the banks and lending institutions how to write loans, Bill Clinton was most certainly the catalyst for the mortgage melt down. I just find it appalling that there is not one socialist (Democrat) that will admit to his wrong doing in trying to expand our “Land of Entitlement.”

http://bulk.resource.org/gpo.gov/register/2005/2005_10024.pdf

“C. Experience With the 1978 Rule
The experience with the 1978 rule
was summarized in the preamble to the
Agencies’ 1995 CRA rule. 60 FR 22156
(May 4, 1995) (1995 rule).”

It stated:
The CRA has come to play an increasingly important role in improving access to credit in communities—both rural and urban—across the country. Under the impetus of the CRA, many banks and thrifts opened new branches, provided expanded services, and made substantial commitments to increase lending to all segments of society. Despite these successes, the CRA examination system has been criticized. Financial institutions have indicated that policy guidance from the agencies on the CRA is unclear and that examination standards are applied inconsistently. Financial institutions have also stated that the CRA examination process encourages
them to generate excessive paperwork at the expense of providing loans, services, and investments to their communities. Community, consumer, and other groups have agreed with the industry that there are inconsistencies in CRA evaluations and that current examinations overemphasize process and underemphasize performance. Community and consumer groups also have criticized the agencies for failing aggressively to penalize banks and thrifts for poor performance. Noting that the CRA examination process could be improved, President Clinton requested in July 1993 that the Federal financial supervisory agencies reform the
CRA regulatory system. The President asked the agencies to consult with the banking and thrift industries, Congressional leaders, and leaders of community-based organizations across the country to develop new CRA regulations and examination procedures that ‘‘replace paperwork and uncertainty with greater performance, clarity, and objectivity.’’ Specifically, the President asked the agencies to refocus the CRA examination system on more objective, performance-based assessment standards that minimize compliance burden while stimulating improved performance. He also asked the agencies to develop a well-trained corps of examiners who would specialize in CRA examinations. The President requested that the agencies promote consistency and evenhandedness, improve CRA performance evaluations, and institute more effective sanctions against institutions with consistently poor performance.
60 FR 22156–57.”

“D. The 1995 Rule and Subsequent
Guidance
The experience with the 1978 rule led the Agencies to replace it in 1995 with a rule designed to emphasize performance rather than process, promote consistency in evaluations, and eliminate unnecessary burden. 60 FR 22156.”

Ok what this tells me is that when Bill Clinton made this mandate it basically rated banks on the QUANTITY of loans over the QUALITY of loans. When this was presented, lending institutions were already writing as many standard 30 year loans as they could. However, the banks and lending institutions had to write more loans. Write more loans to people that could not qualify for a standard 30 year loan. The banks and lending institutions did not want to do this because it would expose the lending institutions to dangerously large amounts of bad debt from bad loans and foreclosures. Remember this was in 1997. So the banks and lending institutions had to come up with creative loan vehicles to meet the mandate that Bill Clinton had written or face federal fines or other actions against the institutions. So the birth of the “No down payment,” Interest Only,” “Adjustable Rate Loans” etc were created to meet the QUATITY of loans that were then rated by this system:

http://bulk.resource.org/gpo.gov/register/2005/2005_10025.pdf

“D. The 1995 Rule and Subsequent Guidance

The experience with the 1978 rule led
the Agencies to replace it in 1995 with
a rule designed to emphasize
performance rather than process,
promote consistency in evaluations, and
eliminate unnecessary burden. 60 FR
22156. Among other things, it established a large retail institution test
comprised of three tests: one for
lending, one for investment, and one for
service.”

OK on page 10025 it talks about the above “test.”

Now if I’m not mistaken that is exactly what Barack Obama’s boy Tim Geithner wants to do. The same thing as he called it a “STRESS TEST’ of performance.

OK so what I am trying to tell you is that everything that the Socialist (Democratic) Party has done in the past has been a huge failure as far as jump starting the economy. This time will be no different.

But here is the big difference between Barack Obama and Bill Clinton:

Bill Clinton’s mandate gambled with investor’s money and the public’s savings (401K and IRAs) and lost.

Barack Obama’s mandate is gambling with all of the countries Tax Payer Dollars for generations to come in the future and will lose again. A much much greater amount of people’s lives are at stake here and in these numbers a Tax Payer Revolt is not out of the realm of reality.

And one final thing. A am just as upset with George W. Bush to have even offered a TARP program to begin with. It just gave the Socialist (Democratic) party an excuse to make business and individuals highly dependent on the Federal Government to survive when they gained power by creating a “Land of Entitlement.” out of the United States of America.

I will be best to say that I know you never even read all 1000 plus pages of that “Spendulas” package as I know you did not have the time as did none of the other people that voted for it.

Senator Boxer I can only hope that you sleep well at night not understanding what you voted for in this “Spendulas” package that Barack Obama and the Socialist (Democratic) party rammed down the throat of the citizens of the United States.

Thanks you,

ST

P.S.

I have been writing to Senator John Mc Cain about this as I do not have any representation what so ever in the State of California.

 

An Open letter to Congressman Adam Schiff 2/11/09 February 11, 2009

Dear Congressman Schiff,

After reading the results of this last survey you put out about the “Spendulus” package I am just appalled buy the number of people that are so uneducated as to believe Barack Obama’s “Fear Mongering” about the doomed economy. After doing some homework I find the similarities between Jimmy Carter, Bill Clinton and Barack Obama so striking it scares me. Jimmy Carter also was elected just Barack Obama by “Fear Mongering.”
But then it was called “The Misery Index.” http://www.miseryindex.us/ Jimmy Carter also tried to spend his way out of the bad level of The “Misery Index.” Where did that get us when Jimmy Carter printed billions of dollars just like Barack Obama? It got us 23% interest that was demanded by the fed to curb the 13% inflation that was created by Jimmy Carter printing all that money that was not backed by gold in the US Treasury. Clearly what Barack Obama is selling you and all your constituents is a train wreck looking for a time and place to happen.

OK lets look at what it looks like Tim Geithner is proposing to do. Look and read this especially section “C”. http://bulk.resource.org/gpo.gov/register/2005/2005_10024.pdf.
Then read. http://bulk.resource.org/gpo.gov/register/2005/2005_10025.pdf
What Bill Clinton mandated the expansion of Jimmy Carter’s Community Reinvestment Act of 1977 in 1979, that was the catalyst that spurred banks and lending institutions to write more loans and meet the quotas that were to be kept score in #10025 above. This forced banks and lending institutions to figure out a way to write more loans to financially challenged people that could not qualify for a traditional 30 year loan. Thus the birth of “Creative Financing” aka “the sub prime loan.” What Tim Geithner is proposing to do is also force banks to write loans that they are not comfortable with. Congressman Schiff let me set up a scenario for you. Imagine you were an underwriter for home loans for any institution. Before you there was a pile of home loans for you to asses the risk management for. Mean while on the radio you have Barack Obama absolutely hammering away all day long making speeches that if “HIS” spending package doesn’t get passed very very bad things in our economy are going to get worse and last longer. And if you do pass it, it will take many years to fix itself if in fact it works at all. Congressman Schiff, how would you feel about putting that stamp of approval on that stack of loan applications?

PLEASE PLEASE do not listen to the Golden Tongue of Barack Obama’s propaganda or the acidic voice of Nancy Pelosi and do not pass this “Spendulus” package into law.

Here is an article in USA today indicating that we may, I say may be at the bottom with home loan foreclosures and we may not have to spend 780 Million dollars to restart the economy. It may be starting by itself. We all know that you can throw zillions of dollars at the economy but it will recover at it’s own pace. It is a natural cycle for the economy to repair itself. Because by and large democrats DO NOT understand SUPPLY and DEMAND, the principles of business and the fact that the American Economy and for that matter the World economy is a living. breathing. dynamic entirety that goes at is own pace. Sometimes an individual makes a very very serious decision that has a moving effect on the Economy like what Bill Clinton did or if you remember what the Hunt Brothers tried to do with silver. http://en.wikipedia.org/wiki/Nelson_Bunker_Hunt.
These created speed bumps in our economy. However Bill Clinton created a crevasse into which out economy fell into and Barack Obama is going to successfully keep us in.

Thank you,

ST

 

Barack Obama and Failed Union Policies. Why not “Employee Stock Ownership Plans” (ESOP) Instead of Unions? January 31, 2009

OK let’s discuss this.  First of all I am a former union teamster and union auto mechanic.

I never benefitted by being in either union. In fact my paycheck was smaller because I had to have union benefits with held from my paycheck against my will. I never received any benefits back. All lost money.

So Barack has some very valid points however they are very, very outdated. Unions have out lived their usefulness. At one time, there was no one watching out for the employee and unions did a lot to correct long hours, unsafe working conditions, very low wages and a host of other problems that were rampant in the labor market.

He mentions 40 hour work week and overtime.  Yes, in the early 1900’s this was a problem. But today it is state law in all states. No union needed.

He mentions safe working conditions.  Yes in the early 1900’s this was a problem.  Now we have  OSHA (http://www.osha.gov/index.html) and we no longer need to have unions for that reason.

He mentions health benefits. Ever since I started working I always viewed health benefits provided by the company as a perk for working for that company. I viewed it as a privilege not a right. After all, this is a big cost to the company.  Even with the companies that I had to pay up to half of the premium I was very happy to have that as I knew how much is would cost to pay for it myself outside of a company policy.  The unions believe that the company should pay for 100% of all healthcare costs.  That is so wrong. When companies can afford it they will help with paying a portion of health care for their employees.

So we have to look at previous years and what Unions have done to various industries like the steel industry. Due to a relentless, crippling union labor strikes, the steel industry has shrunk dramatically as manufacturers can buy higher quality steel at a much lower price from other countries.  It costs less to buy and ship the steel from overseas than it does buy manufacturing here in a union steel plant.

We are now seeing what unions have done to the three big American automakers. The union over head has made the American cars non competitive with foreign automakers. This overhead includes Health for retirees and big pensions that are paid to retirees for life.  Paying for retirees is a huge cost added to american cars. Pensions have been replaced by 401Ks.  When you are done  working at a company, the company owes the worker nothing. He/she is not a beneficial asset to the profitability of the company. The retiree is no longer generating any revenue for the company. I know this sounds cold and harsh but that is the way it has to be. It is the employees responsibility to save for his/her retirement, not the union’s or the companies responsibility. Foreign companies are a lot more profitable building cars here in either non-union assembly plants or much modified union contracts.

An Article in the Wall Street journal by Logan Robinson who is a professor of law at the University of Detroit Mercy. He is former general counsel of Delphi, ITT Automotive and Metaldyne, and former head international and commercial lawyer for Chrysler.

http://online.wsj.com/article/SB123060246925441479.html

So here is the hypocrisy of Barack Obama. Barack tells people that he wants GM, Ford and Chrysler to go back to being successful, profitable and rehiring people. In the mean time he want to empower the bullying United Auto Workers that brought the big three to the brink of extinction. Does this make sense to you?

Barack Obama wants to take away the rights of the owners of ANY company to run a company non-union.

OK let’s look at the effect of that.  Most importantly  it will dramatically drive wages up through union contract negotiations. Keep in mind this is the number one reason for outsourcing manufacturing jobs to other places all over the world.

The next effect that this would have is rampant inflation. When goods are made under union contracts it dramatically raises the purchase price of either labor or the finished product.  When unions were in their strongest days during the 70’s in the Billy Carter administration, the United States was being crushed by 13.5% inflation.

Also keep in mind that all three GM, Ford and Chrysler built the very worst quality automobiles ever to roll off of any assembly line in the world during the 70’s and early 80’s.  It was during that period that the Asian auto manufactures started introducing much better built cars at a much lower price as those cars were built in non-Union shops over seas.

A short comment about that as I was a GM trained mechanic from 1968 through 1973 when I had to quit as the poor quality of the Chevys and Olds that I was working on was just disgusting. As I took a trip through the now closed Janesville plant  in Wisconsin. I could see that the workers were there just for the money.  I didn’t see a lot of PRIDE going into the cars. That is where the Asian, especially the Japanese, had it all over the US manufacturers.  For the Asian worker they took a lot of personal pride in what they were building.  How do I know that?  Very simple. When I would look around in the American Cars that I was working on. I’d see a round dot saying “inspected by #45.”

When I bought my first new Toyota Supra that was made in Japan. I noticed Inspected by stickers also.  But guess what?  The people that manufactured my car were so proud of their work, there was no #45.  There was a person’s name…. yes the person who built the car and inspected it along the way put their name on it. They knew that they had built the finest automobile that they could and would put their name on it.  I guarantee that would never happen in a UAW plant.  OK, enough about work ethic.

The next thing Unions do is take away the ability of the worker to negotiate their own wages.  Basically the Unions turn employees in to mass non desrcript numbers. All people get paid the same no mater what their productivity level is.  The only way a person can make more money for better, more competent work is through a new Union contract. Here is the problem with that:

One of the things that is making our education system in K-12 a disaster are the unions.  First of all. I will  be the very very first one to say and admit that that most important people in out education system are very, very underpaid.  I mean that. Teachers should get payed a lot more than they do…. but there is a clause here. It must be based on performance in the grades of the children that they are teaching just like any other job.  The teacher unions prevent that.

Here is an example: Four teachers in two schools in the same district.  John and Mary in one school and Bill and Ann in another school.

John and Mary’s students are all getting A’s, B’s and C’s and Bill and Ann’s Students are getting C’s D’s and F’s.  Yet because they are all in the same contract they all get paid the same.  Tell me what incentive does Bill and Ann have to do any better because they will get paid the same as John and Mary anyway.

If the teachers that were turning out better educated students got paid more then the underperforming teachers would either have to get better and get a raise or they will be terminated.  Union contracts prevent that from ever happening. So out education system with Union teachers will continue to be a disaster. There are many examples of this.

Here is another example of the industry that I am involved with now and that is the entertainment industry.  California has a huge problem with “Runaway Production” Why? Well it is very simple.  A producer and shoot a theatrical movie off shore or even in another state that is a “Right to work State.”  Shooting in a non-union environment can get a producer very hight quality people without the huge over head of Unions like IATSE and IBEW.

OK so what do I think is the answer if not unions: It is so easy my friend.  Employee owned companies that are called ESOPs. That stands for “Employee Stock Ownership Plan.”

Here is a PDF file that was written by Judy Waggoner explaining what an ESOP is.

https://www.principal.com/allweb/docs/ris/marketing_materials/pq/pq_5361.pdf

Here is an article by Mark Miller at Kent State University pertaining to Airline ESOPs.

http://dept.kent.edu/oeoc/PublicationsResearch/Winter1999-2000/EmployeeOwnershipInTheAirlines.htm

Here is an example of a plastic manufacturing plant in Elgin, Il that is an ESOP.

http://www.hansenplastics.com/site/epage/15544_441.htm

I can guarantee you that Hansen Plastics has no use or desire to have a union on it premises as they know that the company will not be profitable with a union.

When a company is employee owned every one of the employees from the CEO on down has a stake in the well being of the company. There is no reason why the Unions can not be booted out of the big three American Auto Manufacturers and the companies become employee owned (ESOP). I think you would see much more efficient companies and better automobiles because the employees would all benefit by the operational efficiency of the company. Employees often complain about not sharing in the profit that the companies are making and that is why they need unions. Well if the companies were employee owned they would all get a “Profit Sharing Check” at the end of the year or quarterly.  Not practical to dole out profit checks every pay period. So if the company is run right then everyone makes money. If the company has any screw ups for employees then the other employees will want to get rid of them so that the company is efficient and profitable.

OK again Barack Obama just does not get it. His “Change” is what we had in the Carter administration. There is absolutely nothing new that Barack Obama is doing.  NOTHING.

ST

 

Everyday We Learn More About The Community Reinvestment Act of 1977 (Updated 11/20/10) (Please Scroll Down For New Articles As This Article Always Stays On The First Page) September 29, 2008

In August of 2008 my cousin sent me this video. Like most Utube videos I didn’t give it much thought to really watch it. But for some reason I sat through the whole 11 minutes and began to think. I said this can’t be true. This has to be someone’s mean spirited video against Bill Clinton and the Democrats. But at almost the end the frame kept coming up saying “If you don’t believe it Google it yourself.” I took that to task and did about a months research to see if this could have happened. Did Monica Lewinsky really upstage the the biggest travesty in the economic history of the United States? What you are about to read will make you think. My goal here is not to change anyone’s mind. It is rather to get people to think and perform their due diligence to research the past track record and core beliefs of the party and candidate that they are going to vote for.

Please read, enjoy and just do some research instead of listening to popularity polls and who your friend is going to vote for.

Here is an updated version (With a much better sound track).

Slowly Bill Clinton’s 1997 Expansion of the CRA started to create financial discrepancies in Fannie Mae and Freddy Mac.  Later on I will go into detail about the original Community Reinvestment Act of 1977 that was created by Jimmy Carter. The Democrats have been lying to us since 2004 stating there are no problems with Fannie Mae or Freddy Mac.  The Democrats blocked Republicans that saw a future melt down of the United States economy and wanted to regulate or at least oversee these financial institutions.  The Democrats said no.  You don’t believe me? Watch this video of real conversations in the United States Congress, not a commercial or program that was created to change the minds of the public.

In this video we see Maxine Waters stating that Fannie Mae and Freddi Mac are not broken.   As of today 3/15/09 we are discovering why the Democrats especially Maxine Waters did not want to interfere with the lending practices that was eventually going to cause Fannie Mae and Freddie Mac to collapse. Here is a news story that is developing today 3/15/09

http://www.knx1070.com/play_window.php?audioType=Episode&audioId=3566977

As this story unfolds I have been doing the research to understand the connection from when Maxine Waters stated to Congress in early 2004 that Fannie Mae and Freddie Mac did not have to be fixed and “there is not crisis at Fannie Mae and Freddie Mac.” The reason that Ms. Waters did not want any regulation for Fannie Mae and Freddie Mac was that Ms Waters and her husband Sidney Williams were investors in OneUnited Bank in Massachusetts.  In fact, Sidney Williams joined the Board of Directors of the minority owned OneUnited Bank in early 2004. The video above from the congressional hearings were conducted in late 2004 after Sidney Williams joined the Board of Directors for the minority owned OneUnited Bank.

Here is an article written by Susan Schmidt at the Wall Street Journal going into detail on what I just discussed in the previous paragraph.

http://online.wsj.com/article/SB123705585093130641.html

Maxine Waters released this statement on 3/15/09

http://www.house.gov/apps/list/press/ca35_waters/PR090313_fallout.html

Ms. Waters states the following:

“My husband Ambassador Sidney Williams, who has represented the United States as an Ambassador and has been a respected and active member of the Los Angeles community for many years, was asked to sit on the board of OneUnited Bank. This bank services our community and was the successor to the bank of which we had been customers at for many years.  He accepted the position and did not accept any director’s compensation for his work on behalf of the bank and the community it serves.”

“Despite suggestions to the contrary, I have fully disclosed all of my financial interests in official filings.  These filings included the stock my husband purchased upon joining OneUnited’s board (it is required under Massachusetts law, where OneUnited is headquartered, that individuals hold stock in a bank before joining its board).  Furthermore, Ambassador Williams is proud to be invested in a minority owned community bank that was given an “outstanding” lending rating from its regulator for its lending activity in underserved communities in Los Angeles, where traditional banks have refused to lend. I even took additional steps beyond what is required of Members of Congress when I voluntarily and publicly disclosed my husband’s relationship with OneUnited during an October 30, 2007 Financial Services Committee hearing entitled “Preserving and Expanding Minority Banks.”(3) Both the Federal Deposit Insurance Corporation and the Office of Thrift Supervision were present at this hearing.”

However Ms. Waters doesn’t mention anything about the dollar amount in investment positions that Ms Waters and her husband had in OneUnited Bank.

This is from Ms Schmidt’s Wall Street Journal article:

“Ms. Waters and her husband, Sidney Williams, were investors in two African-American owned California banks that merged with other lenders in 2002 to form OneUnited. Congressional financial-disclosure forms show Ms. Waters acquired OneUnited stock worth between $250,000 and $500,000 in March 2004, as did Mr. Williams. Mr. Williams joined the board of OneUnited that year. Each sold shares in September 2004–including Ms. Waters’s entire stake–but Mr. Williams continued to hold varying amounts of the company’s stock. On the lawmaker’s most recent financial-disclosure form, dated May 2008 and covering the prior year, Ms. Waters reported that her husband held between $250,000 and $500,000 worth of the bank’s stock.”

OK so how does this all get connected?

It appears that Ms. Waters and her husband Sidney Williams were financially involved with a minority owned lending institution called OneUnited Bank. During the course of Ms. Waters and Mr Williams involvement with OneUnited Bank, sub-prime loans were being made to minorities that could not afford to pay back the loans that were being made. This of course was a derivative of William Clinton’s mandated 1997 expansion of the Community Reinvestment Act of 1977.  Ms. Waters did not want any regulation against Freddie Mac and Fannie Mae because Ms. Waters and Mr. Williams were making a lot of money off of their investments in OneUnited Bank. In turn I would imagine that OneUnited Bank sold these loans maybe to Fannie Mae or Freddie Mac or both and did not service or carry the loan debt of the sub-prime loans.  So why would Maxine Waters want any kind of regulation for Fannie Mae or Freddie Mac as the Republicans asked for in the the above video that I have re-linked here.

Here is were this gets real interesting.

Austin Tighe who represents the NAACP has filed a lawsuit on March 13th, 2009 against HSBC and Wells Fargo banks for discrimination and predatory lending practices towards minorities in particular Afro Americans. Mr. Tighe states that the two aforementioned banks “Discriminated” against poor Afro Americans for writing bad loans to that group of people. How strange that Mr. Tighe would never bring these charges against OneUnited Bank that I’m sure did the same thing for years.

http://news.yahoo.com/s/ap/20090313/ap_on_re_us/naacp_mortgage_discrimination

And even more interesting:

Barack Obama was an associate attorney from 1993 to 1996  at the following law firm:

http://www.lawmbg.com/

While Barack Obama was employed buy Minor, Barnhill & Galland, Barack Obama represented ACORN in a lawsuit against CitiBank for not writting enough Sub-Prime Loans to Afro-Americans.

http://www.allbusiness.com/finance/529735-1.html

So now let’s look at the origins of the Community Reinvestment Act of 1977

The CRA was devised by Jimmy Carter (D) in 1977 when he was in office. I have to admit that President Carter’s intention was very good. Lending Institutions were practicing something called “Redlining.” Lending Institutions were refusing to write loans in any way or form in predetermined zip codes usually in inner cities or blighted areas of a city like for instance Brooklyn, NY.

Here is an article in the NY Times dated December 25, 1989

http://www.nytimes.com/1989/12/25/nyregion/bank-redlining-still-prevalent-loan-critics-say.html?n=Top/Reference/Times%20Topics/Subjects/B/Black%20Culture%20and%20History

Jimmy Carter’s goal in mandating the CRA in 1977 was a good thing because as you know there were people in those zip codes that could easily qualify for a traditional 30 year loan.  In addition there were landlords that wanted to do improvements to their properties but they couldn’t get a loan to do that.

http://www.answers.com/topic/community-reinvestment-act-of-1977

This all went horribly and tragically wrong when in 1997 Bill Clinton went beyond the original intention of Jimmy Carter’s 1977 CRA and mandated that banks should make loans to people that could not qualify for a traditional 30 year loan. If Bill Clinton hadn’t created this mandate. Then bank’s and third party lending institutions would have not ventured into creative lending practices like the 5/25, 2/28, No Down Payment and Interest Only loans. When the banks and lending institutions created these creative lending practices they created an artificially high number of home buyers that would have not qualified for a traditional, secured 30 year loan. The result of the number of people that could now qualify for a mortgage loan created a “Sellers Market.” Buy the nature of “Supply and Demand” and “What the market will bear”, sellers of both new and pre-owned houses were allowed to inflate the prices in the housing market otherwise know as the “Housing Bubble.” This was exacerbated by the fact that a person that could have qualified for a $150,000.00 traditional 30 year loan could now qualify for a $250,000.00 home with creative financing like a 5/25, 2/ 28, No Down Payment, or interest only loan. This led to people qualifying, borrowing and buying a house way beyond their fiscal capabilities. Eventually these new homeowners could not support the bubble payment that was in their mortgage contract and the housing bubble collapsed. This in turn eventually affected the people that had good 30 year loans and were able to pay the mortgage back. This phenomena proceeded to fester like a cancer throughout the financial markets all over the world for one simple reason:  The Devaluation of the American Dollar. Now we fear that China will not buy our debt as they have in the past. I’m sure there is a lot more that I don’t know pertaining to how far this line of falling dominos goes.

“Clinton Administration Changes of 1995”

In early 1993 President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities.[6] The new rules January 31, 1995 and featured: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to target to groups to collect a fee from the banks.[4][7] The new rules, during a time when many banks were merging and needed to pass the CRA review process to do so, substantially increased the number and aggregate amount of loans to low- and moderate-income borrowers for home loans, some of which were “risky mortgages.” Banks set up CRA departments, a CRA consultant industry was created and new financial-services firms helped banks invest in packaged portfolios of CRA loans to ensure compliance. Established and new community groups began marketing such mortgages. The Senate Banking Committee estimated that as of 2000, as a result of CRA, such groups had received $9.5 billion in services and salaries. As of that time such groups also had received tens of billions of dollars in multi-year commitments from banks, including ACORN Housing $760 million; Boston-based Neighborhood Assistance Corporation of America $3 billion; a New Jersey Citizen Action-led coalition $13 billion; the Massachusetts Affordable Housing Alliance $220 million.[4] The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.[8][9] Related rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market.[5] Due to massive financial losses, on September 7, 2008 the Federal Housing Finance Agency (FHFA) put Fannie Mae and Freddie Mac under the conservatorship of the FHFA.[10]”

Here is a detailed description of 1995 CRA Rule 60 FR 22156 (May 4, 1995) (1995 Rule) from the Federal Register.

http://edocket.access.gpo.gov/2005/pdf/05-4016.pdf

Please read Sections C & D on page 10024

“C. Experience With the 1978 Rule The experience with the 1978 rule was summarized in the http://edocket.access.gpo.gov/2005/pdf/05-4016.pdf to the Agencies’ 1995 CRA rule. 60 FR 22156 (May 4, 1995) (1995 rule).

It stated: The CRA has come to play an increasingly important role in improving access to credit in communities—both rural and urban— across the country. Under the impetus of the CRA, many banks and thrifts opened new branches, provided expanded services, and made substantial commitments to increase lending to all segments of society. Despite these successes, the CRA examination system has been criticized. Financial institutions have indicated that policy guidance from the agencies on the CRA is unclear and that examination standards are applied inconsistently. Financial institutions have also stated that the CRA examination process encourages them to generate excessive paperwork at the expense of providing loans, services, and investments to their communities. Community, consumer, and other groups have agreed with the industry that there are inconsistencies in CRA evaluations and that current examinations overemphasize process and underemphasize performance. Community and consumer groups also have criticized the agencies for failing aggressively to penalize banks and thrifts for poor performance. Noting that the CRA examination process could be improved, President Clinton requested in July 1993 that the Federal financial supervisory agencies reform the CRA regulatory system. The President asked the agencies to consult with the banking and thrift industries, Congressional leaders, and leaders of community-based organizations across the country to develop new CRA regulations and examination procedures that ‘‘replace paperwork and uncertainty with greater performance, clarity, and objectivity.’’ Specifically, the President asked the agencies to refocus the CRA examination system on more objective, performance-based assessment standards that minimize compliance burden while stimulating improved performance. He also asked the agencies to develop a well-trained corps of examiners who would specialize in CRA examinations. The President requested that the agencies promote consistency and evenhandedness, improve CRA performance evaluations, and institute more effective sanctions against institutions with consistently poor performance.

D. The 1995 Rule and Subsequent Guidance

The experience with the 1978 rule led the Agencies to replace it in 1995 with a rule designed to emphasize performance (Quantity of loans) rather than process (Quality of Loans), promote consistency in evaluations, and eliminate unnecessary burden. 60 FR 22156. Among other things, it established a large retail institution test comprised of three tests: one for lending, one for investment, and one for service.”

If you notice that this mandate created a “TEST” for the banks.  Does this sound familiar to what Timothy Geitner is doing right now.

And then came the unregulated start up third party lenders (Countrywide, New Century Mortgage) that thrived under the auspices of the CRA and started issuing loans to people with no income or little income and no money down.  For the most part these third party lenders had no intention of servicing these loans. These third party lenders had the intentions of making a lot of money on the sales commissions then they would sell the loans to Ginnie Mae to be issued as “MBS’s that in turn were issued to various investment groups as an investment vehicle. The next thing to happen is that as these very bad mortgage loans started to sour so did the Mortgage Backed Securities that were in 401 Ks, IRAs an any other type of investment portfolios became worthless. Banks, Brokerage firms, pension plans, and anyone or any company that had bought and sold these worthless MBSs began to fail.  And now the picture is a little clearer as to how we got to where we are today June 15, 2009

http://www.sec.gov/answers/mortgagesecurities.htm

All of this was done by third party lenders with the mandated Bill Clinton’s 1997 expansion of the CRA as its mantra.

This is from Wikipedia Community Reinvestment Act

“Congressman and 2008 Republican presidential candidate Ron Paul has partially attributed the ongoing subprime mortgage crisis to legislation such as the CRA.[16] Economist Stan Liebowitz has also expressed his opinion that banks were forced to loan to un-credit worthy consumers with “no verification of income or assets; little consideration of the applicant’s ability to make payments; no down payment.” However, the chief executive of Countrywide Financial, the nation’s largest mortgage lender, is said to have “bragged” that to approve minority applications “lenders have had to stretch the rules a bit”, suggesting that Countrywide was responsible for relaxing its standards rather than the other way around.[17]”

Yes, they were unregulated but the democrats blocked any reform as they were on the take like old business as usual. And so wealth and prosperity of bankers and third party loan companies grew through the both of the Bush administrations.  But there was danger ahead and during the years there were various people including John Mc Cain that saw a problem in the works.  He was defeated by democratic stonewalling as any change would not allow poor people to continue to get loans under the CRA that they could not afford . These third party lenders were not regulated and would not be regulated or the Democrats would be defeating themselves in the quest to take from the rich and give to the poor.  The poor did not have a way to pay for the bad loans that could not be paid by the people that took out these loans that they were “Entitled” to by the CRA. Now that being said there were a lot of things that the Bush Administration could have done but those pesky Democrats that were on the take from “Wealthy Banks” would not allow their (Democrats) cash cow to die.  Finally now all those bad loans that were mandated by the CRA came to a head.

Now again the Democrats want to protect all the irresponsible people that took out these loans that the government said they were “Entitled” to according to Jimmy Carter’s CRA.  As it may happen shrewd businessmen both Republican and Democrat capitalized on an extremely flawed mandate called the CRA. No matter what they did, the federal law said that now people who didn’t have the resources to pay back the loans should be given an easier way to qualify for a loan. Enter the Clinton administration that created a mandate that led to the birth of sub-prime loans.  The third party lenders (unregulated, non banks) then exploded over the years.  These third party lenders then packaged these very bad, risky loans as an investment that the likes of Freddie and Fannie who bought them without qualifying their credibility.  Housing prices exploded. Why, Because of sub-prime loan, people that could not only not afford homes but they could afford more expensive homes.   But guess what? They qualified for risky no down payment, interest only loans to pay for inflated housing prices.  Enter the person who takes the 2/28 loan because he or she is going to “FLIP” the house and make a lot of money by artificially pumping up the price of that some poor person can qualify for a loan for.  Thank you CRA. What makes it worse it that now the Democrats are turning like rabid dogs on all the CEOs that made big profits off of the CRA.  The democrats provided a vehicle for CEOs to make a lot of money off of the CRA and like all people both democrat and republican who are in the business to make money did exactly that.  Now The Democrats call them “RICH BASTARDS” and do not want to reward them for making good on a law (CRA) that they (Democrats) passed.

I do not see good things with Obama as he profited from this situation also.  More than likely if Obama gets into office he will go back on his word and with the power of the Democratic Majority will seek to raise taxes to payback up to 700 Billion dollars. For the next 4 years Obama and the Democratic Party will blame this on the Bush Administration who were only partial responsible for the sub-prime debacle. I think Obama has a hidden agenda that no one knows about, not even Joe Biden.  It scares the manure out of me. Yes, he wants change……..but change to what is what no one really knows.  Billy Carter wanted change too and he got his change 31 years later with the change of a destroyed American economy. He wanted all poor people to own a home. But how were those poor people going to pay for the loans?  Fast forward to 1995 Bill Clinton mandates that it should be even easier to for poor people to get mortgages and the sub-prime era begins. Fast forward to 2008.  700 Billion tax dollars to pay for the bad loans that were written in the past under the command of Bill Clinton, Jimmy Carter and the CRA. That is how poor people were able to buy and then loose their houses.  And yes, I realize that Obama has sold a lot of uneducated people bill of goods, but we all pay the price if he gets elected. Far worse than what we have now.

Ultimately this has come full circle now that the tax payers are now paying for bad debt that was started in 1977 and built up over the years.  The mantra of the Democratic party is Tax and Spend. Taxpayers are now buying houses for poor people. Sounds a little like Social Communism.  The more and more I look at what is going on I am coming to this decision: If Barack Obama and Nancy Pelosi get control of this government they could destroy Wall Street and the RICH BASTARDS.  If this happens and everyone’s savings and investments are lost and have to rely on the Government then this will be the beginning of Marxist Socialism in the United States.  The Democrats are constantly complaining about the deficit. Why is that? Again the Democrats mantra is TAX & SPEND. Well, it is obvious. The Democrats want a huge surplus of money in the coffers to be a socialist government. The Democrats want the US Government to have all the money and power to do what ever they want to do.

Remember, if the Democrats can keep people poor, uneducated, unemployed and desperate they will always have a voter base.

I am not sold on Mc Cain and I will now probably vote third party (undecided as of this time) for the first time in my life. There will be no change as long as we keep re-electing a Democrat or a Republican.

1/4/2010

Fast Forward to September 16, 2009. Barney Franks still lives in a state of denial and authors H.R. 1479.

I found this new revelation when I read this article in the Washington Examiner online.

CRA 2009

“This morning House Financial Services Committee chairman Rep. Barney Frank held a hearing on H.R. 1479, the “Community Reinvestment Modernization Act of 2009.” The bill’s purpose is “to close the wealth gap in the United States” by increasing “home ownership and small business ownership for low- and moderate-income borrowers and persons of color.” It would extend CRA’s strict lending requirements to non-bank institutions like credit unions, insurance companies, and mortgage lenders. It would also make CRA more explicitly race-based by requiring CRA standards to be applied to minorities, regardless of income, going beyond earlier requirements that applied solely to low- and moderate-income areas.”

This my friends is the same thing all over again that Bill Clinton did in 1997 mandating that banks continue to issue Home Mortgage loans to people  that cannot afford to qualify or make the payments. This again put the banks and lending institutions in a perilous situation that will cause the further collapse of our US Economy.  Barney Franks and the Pelosians keep coming up with Marxist Socialist Entitlement programs that are unsustainable with the available tax dollars given the high unemployment and the lack of income that allows an individual to sustain mortgage loan payments.  If this H.R. 1479 becomes law it will mean more banks will close, More people will lose their jobs as the real estate market disintegrates due to an ever increasing number of foreclosed home loans.

OK so now you ask yourself what else could possible go wrong.  Who would provide the Mortgage Back Securities comprised of bad loans that were bought from the banks?

Fannie Mae and Freddie Mac Receive Unlimited Future Funds To Stay Afloat.

While you were enjoying your Christmas Eve Dinner (1/24/09), The US mortgage security entities became “nationalized” with US Tax Dollars. This simply means that for years to come the US taxpayer will pay for all the bad loans that Jimmy Carter, Bill Clinton and Barack Obama mandated with the creator being Barney Franks.

“The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.

The Treasury Department said Thursday it removed the US$400-billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government’s estimate this summer of $170 billion over 10 years.

Treasury Department officials said it will now use a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. Under the formula, financial support would increase according to how much each firm loses in a quarter. The cap in place at the end of 2012 would apply thereafter.

By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress.”

OK do you see what this Marxist Socialist Democratic Party is doing so far?  There is no change. This is a repeat of Jimmy Carter (D) (1977 to 1981), Bill Clinton (D) (1993 to 2001) and now Barack Obama (D) (2008-2012).

ST Marie