The government regulator in charge of overseeing Fannie Mae and Freddie MAC sued 17 major banks today for mortgage fraud. The federal agencies purchase mortgages from banks to guarantee them against losses and taxpayers have taken an almost $200 billion hit. The feds say material representations made were fraudulent and serious omissions of fact occurred. Among the banks sued were Ally Financial (GMAC Mortgage), Countrywide, JP Morgan Chase, CitiGroup, Goldman Sachs, and DeutscheBank. To date no criminal prosecutions have begun. If the government acknowledges, as they do with this suit, that massive fraud happened in the mortgage markets why are they not prosecuting criminally? Did Barack Obama take so much campaign money from these bankers they got immunity?
A panel negotiating a civil settlement with major banks over mortgage fraud has removed New York Attorney General Eric Schneiderman. The NY AG was opposing a proposal to allow the banks which swindled investors, defrauded homeowners and collapsed the global economy to get off with a $20 billion fine and be immune from further prosecution. The $20 billion is the total amount for all the banks, not for each one of them. These bankers cost investors $7 trillion, many of whom were pension funds, foreclosed on another 7 million homes and resulted in 8 million Americans losing their jobs.
They did this by telling home buyers their mortgages were fixed rate when they were adjustable, by forcing many prime mortgage borrowers into riskier and more expensive sub prime loans (for higher commissions), forged false information on mortgage applications, bundled these now toxic assets into derivative securities, rated them AAA so pension funds could buy them, then bet against them by taking insurance out on them through AIG. It all collapsed because it was simply a huge Ponzi scheme. The demand for more and more mortgage backed securities meant creating more and more fraud.
For this they get away with a collective $20 billion fine and no criminal prosecutions. Schneiderman isn’t happy with that and objected on behalf of the victims in his state and, thusly, was removed from the group negotiating this sweetheart deal for the banks.
Remember who the single largest contributor was to President Obama’s 2008 campaign? Goldman Sachs ($994,000). JP Morgan Chase employees gave him $695,000. One thing I will say about Barack Obama: once he’s bought he stays bought.
I’ve been wondering why Canadians are so much smarter than Americans. Our neighbors north of the border share the same heritage with us: settled by Western Europeans, tied to the British and French nations, pioneers who crossed a dangerous ocean in search of opportunity. Our nation’s paths diverged quickly; Canada never adopted slavery as its climate was unfit for cotton, the crop which seemed to corrupt American morals, and it remained part of the British Empire far longer. Canadians have universal health care and love it, they are a far more peaceful people than Americans, never having started a war of empire or imperialism and didn’t engage in the genocide of natives as happened in the lower 48.
There are great similarities and great differences between the U.S. and Canada but the level of knowledge and intelligence is what strikes me most. Canadians know their facts, Americans do not. It isn’t necessarily that Americans are stupid but that they choose not to learn basic things. Things such as initiating wars under false pretenses for imperialistic reasons is bad, that genocide is bad, that dropping atomic bombs on people is bad, that lying about reality is bad and on and on. We can blame the ignorance and misinformation on Rush, Hannity, O’Reilly, Faux News and others but the fact is Americans choose to get their misinformation from these sources rather than reality based programming. That makes them stupid in my book. The internet brings all sorts of information to our fingertips but many choose not to access reliable sources. Canadians do.
We witnessed much of this ignorance last year during the health care debacle and will observe it once again on Wall Street reform. The Tea baggers were out in force last week protesting taxes and government. I say if you don’t like our form of government you are free to relocate to Somalia. Go live where there is no government. While carrying signs protesting President Obama and his taxes few of these folks accepted the actual fact that he cut taxes for 95% of working Americans. With the nation, and world, on the brink of an economic catastrophe which could have made the Great Depression seem like a summer picnic he pulled us back from the brink of a deep abyss and turned things around. They give him no credit for that but, instead blame him for massive budget deficits. The reality is that those deficits are from failed right wing policies they support. Why are Americans so stupid?
Here’s a graph which makes it so simple even a Tea bagger can comprehend it:
As you can see most of the deficit has resulted from a failed economy. Add in the unpaid wars in Iraq and Afghanistan, the unpaid for Bush tax cuts and Bush’s TARP and Fannie and Freddie bailouts and most of our deficit is the fault of Republicans. Tea baggers blame Barack Obama however.
Democrats don’t support massive tax cuts for the richest 1%, that’s a right wing philosophy, as are imperialistic wars based on lies to the people and policies of deregulation big business. It was Republicans like George Bush (both), Dick Cheney, Phil Gramm, Mitch McConnell, Bill Frist, Dick Armey and so on who chose to allow Wall Street to manufacture fraud on such a massive scale it collapsed the global economy. Unfortunately our friends in Canada and everywhere else suffered along with Americans who lost $7 trillion in personal wealth, seven millions homes and eight million jobs. These nitwit Americans blame Democrats however.
Now I’ll concede there are lots of corporate Democrats who remain part of the problem. The Wall Street tycoons who thought up these toxic mortgage securities then peddled them to new homeowners using fraudulent tactics then bet against them failing (as they knew they must) are the principle criminals in what happened. Simply going after Goldman Sachs won’t assuage the guilt of the millions of traders, managers and sales agents who perpetrated this massive fraud. Though bankers created 80% of the fraud many greedy Americans also saw the chance to strike it rich and attempted to cash in by flipping houses, taking interest only mortgages and bought homes they knew they couldn’t afford.
How many of us drove past those developments of McMansions and wondered how people were affording them? I bet most of us did. They couldn’t and today they stand vacant, cancers on the economic health of the country. Our financial system is as broken as our health care system and if what we just witnessed in the attempt to reform that is any indication stupid Americans will, once again, allow themselves to be brainwashed by the media into thinking white is black, black is white and up is down. The corporate media didn’t want real health care reform and it doesn’t want economic reform. They will continue to finance groups such as the Tea Party and convince these stupid, gullible souls into acting against their own interests.
I’m sorry but these idiots got exactly what they deserved with the financial, economic meltdown because they allowed the corporate media to brainwash them into thinking gay marriage would destroy this country. Wall Street and the Republican Party for which they voted did. When one votes repeatedly against one’s own economic interests don’t then turn around and blame me. I told you so. The supreme irony is that these same forces are financing the Tea Party.
Now people criticize me for calling Tea baggers stupid. The evidence is overwhelming, I see it every time I see them. The most aggravating part of it is that these people choose to be stupid, choose to access bad sources, choose to listen to Rush and watch Faux News, choose to be stupid. Canadians don’t and I wonder why. Better schools?
Are you fed up with huge Wall Street bankers who took billions of tax dollars then turn around and keep giving money to their employees instead of small businesses? The economy remains crippled as credit available for businesses is scarce but huge bonuses plentiful. Are you ready to do something about it? There are two steps every individual can do, today, to begin fighting back. First begin using cash again. Then move your accounts from the large “too big to fail” banks which are abusing us.
Using cash instead of credit and debit cards will affect bank’s cash flow. Each time you swipe a card that bank receives a fee. This also increases the costs of everything we buy because retailers must factor in those costs. For example, every business which accepts credit and debit cards pays a percentage of every transaction to banks. These range from 1-4%. If you get cash from your ATM, or even better, teller, and stop giving them these fees you can fight back with every transaction. ATM’s were developed by banks to save money on staff since they needed fewer tellers. Then the greedy bastards began charging us for using machines which saved them tons of money. Cashing checks at tellers and spending that instead of using your debit card is a very effective manner of cutting their cash flow and profits.
Moving your money is even better. Last year I moved my accounts from Sovereign Bank to Metro Bank. By using smaller, community based banks you keep your money in your community and it might be better used to provide credit to your local businesses. The huge banks like Wachovia, Wells Fargo (same institution as they bought Wachovia when it came close to collapse), Citi, JPMorgan Chase, Bank of America and other national banks will reduce their businesses and cost them profits. We can make these “too big to fail” banks smaller ourselves by moving our accounts. They are all dependent on deposits and moving your deposits and savings accounts to local banks or credit unions will make them smaller. Smaller one customer at a time but it is amazing how one customer at a time can have a serious effect. Even better your funds may wind up being more secure. Sovereign almost collapsed when the Massachusetts, worried about its solvency, moved $300 million to another bank. Though the FDIC will guarantee your money to a certain limit can you do without any cash flow until they get around to you? Move it and move it today.
Okay, for the past few weeks we’ve been hearing about how the automakers in Detroit need taxpayer money to stay afloat. We’ve also heard tons about how our economy is strapped to the tracks in front of an incoming freight train, waiting to get crushed. O-Kay, now that we’re on the subject, why are the automakers, who provide millions of vulnerable jobs that employ whole towns, still begging for money while Citigroup have basically walked into the Congressional room and got it hand over fist? No, better yet, why are we bailing out any of these guys and still have not focused on our hard-working people losing their housing and their jobs? If the regular hard-working guy or gal is going to have to front the bill then why are these cigar-smoking, private jet-flying, big bank and insurance suits getting preference over the everyday American worker? Many of these companies willingly opted to make horrible choices by not investing in what the people have been demanding for: environmentally-friendly, cost-saving vehicles? Toyota made the right decision to follow the green path and are doing quite well. When we personally make bad decisions in our financial lives there’s no Congress there to save our butts and keep us from financial ruin. However, when Uncle Joey is losing his job, pension, and 401K from the company he has worked for 30 years he is being forced to help Capital Corporation # 27 when he can use the help for himself. I think Congress needs to get its priorities straight and focus on the American people and their foreclosed homes before they start giving a blank check to Jet-Flying, Wine and Hot-Tub, Mile-High Club CEO #10 without a plan to keep Joey the Worker’s job.