TaxCheat Geitner -- Hand in the Till

[BlueStreak]

Originally Posted by flacaltenn

So FinBow:

Your just peachy with purposely mismanaging an employee trust fund to fix a "cash flow" problem. That is won't have an adverse outcome on the people vested in that account or the taxpayers?

Get those CongressCritters BACK to D.C. NOW.. Show some f)(ing urgency... Where's the OVERSIGHT? or leadership?

We're just doomed..

Why not? I hate it, but I'd think YOU would be jumping for joy.

Private industry finds ways to fuck their employees to raise cash all of the time. Everything from BS "incentive" programs, that are really just devised to escape giving COLA raises to all employees, to just straight up eliminating benefits at will, to slowly passing the burden of payment for benefits back to the employee, to finding inventive ways to "allow" employees to work off the clock. And don't tell me they don't do it, because that's the biggest goddamned lie there is. And I don't believe it is ALWAYS justified either. That's a damn lie too.

So, if government starts acting more like private industry, I'd say that you have gotten what you want; Workers are getting fucked to make things easier for the employer.

So shut up and be happy.

Dave

[flacaltenn]

Pete:

I'm with you on the "no compromises". However, I think it's more important to fix the leaks before you refill the tub. Do we know what's left in Stimulus/Tarp? Do we know that Fanny/Freddy are NOT still writing sub-prime junk? As far as how fast we cut, cut, cut -- I think that's less important than setting the proper course and having a plan.

Compromising on important issues like one are like a vegan family and a "normal" family planning ThanksGiving dinner. There's gonna be a lot of extra work. No one's gonna have a good time. And a lot of stuffing is gonna go to waste..

FinnBow:

I could be wrong your Bow-ness, but I believe Timmy the Cheat has the ability RIGHT NOW to put TARP baloney back in the Treasury. He probably also has the discretion to SELL Chrysler on a short ride to hell. From the article I posted -- it seems like he "only" has to come up with about 100Bill. (WTF -- when we talk about "only 100Bill over a MONTH'S time).

[merrylander]

Originally Posted by piece-itpete

Pssst - let me tell you a secret - there is no way we'll default



.

You never know, Bonehead and Dr. No are just dumb enough to accidentaly screw up.Hell they screw-up all the time on purpose.

[flacaltenn]

BlueStreak:

Why not? I hate it, but I'd think YOU would be jumping for joy.

Private industry finds ways to fuck their employees to raise cash all of the time. Everything from BS "incentive" programs, that are really just devised to escape giving COLA raises to all employees, to just straight up eliminating benefits at will, to slowly passing the burden of payment for benefits back to the employee, to finding inventive ways to "allow" employees to work off the clock. And don't tell me they don't do it, because that's the biggest goddamned lie there is. And I don't believe it is ALWAYS justified either. That's a damn lie too.

So, if government starts acting more like private industry, I'd say that you have gotten what you want; Workers are getting fucked to make things easier for the employer.

So shut up and be happy.

Employers CAN do all that crappola. I don't jump for joy about it. I've had to go thru Chapt 13 at a Silicon Valley startup and lay off 6 of best friends and colleagues. I take making a business healthy as deadly serious because people's lives are involved. Can't tell you the number of times I was asked to defer salary for a couple weeks so that my team could get paid. My boss ate stock certificates for 6 months because he believed in the venture.

Reality is Dave, when the sheets don't produce profit, it gets too risky to ride the hairy edge of disaster. You need to have a safety margin for tomorrow and looking ahead. And unfortunately, employees are easier to retrieve than reliable customers or stockholders.

But here's the outrage for me. We are largely in this crisis (that was seen coming for 30 years) because Congress stole over $6TRILL from workers paychecks by charging them too much for a "trust fund" premium for MC/SS. Promised to pay it back when it was needed. NOW THAT IT"S NEEDED, we have a treasury sec who's dipping into ANOTHER trust fund to cover that debt. It shows that there is no humility or repentance about the theft. That the American public will allow the charade to continue and NOBODY is ever gonna get punished.

Indian Trust Fund, Highway Trust Fund, Social Security Trust Fund. NONE of these have any meaning because of the incompetence and the arrogance of our Fed govt. It's time to Tea Party or find something equivalent to change the status quo... These bozos sit on the butts after a year or so in Wash DC and become part of the crime syndicate. Trust them with my HEALTHCARE. HELL NO!! Not when these perps are now cutting THOUSANDS of exemptions to ObamaCare for their friends and sponsors. And Nancy Pelosi admitted that she had no idea what might be in her famous bill before it passed.

Can you smell the abysmal FAILURE in any of that???

Toss 'em all.. Every election...

[merrylander]

Originally Posted by flacaltenn

Do we know that Fanny/Freddy are NOT still writing sub-prime junk?

'Nuther right wing spin, Freddy and Fannie do not write mortgages, banks write them. Freddie and Fannie guarantee them and securitize them. Wells Fargo was one of the biggest offenders in sub primes.

[piece-itpete]

Freddie/Fannie will only back mortgages that meet their guidelines. In the run up to the bubble they had to loosen their standards to remain relevant, my understanding.

The problem with trust funds and government is the 'trust' part. But Barnum was right...

Flac I agree, I'd have had some respect for Obama if he would've done a sweeping overhaul of government. But the Dems are now the party of the status quo, the Reps at the state level are instituting sweeping reforms that the Feds will be seeing next GOP takeover

And 'fix' SS by raising the retirement age? So I have to wait till 70 for my pittance, that I'm about to pay twice for!, but if you work for the government you get a great retirement at 50-55?? THAT is why the GOP will win. Ultimately Americans have a sense of fairness.

Pete

[flacaltenn]

MerryLander:

You are correct about who originates the writing. However, the banks only write them largely because they have a guaranteed buyer in Fanny/Freddy. As long as they follow the conforming rules SET BY the Feds, Fanny/Freddy will buy it. THUS -- Fanny/Freddy are the launderers of all the bad paper. They repackage it and sell it in bundles so that banks can keep pumping them out. The standards for this laundering (sp?) are all set by the FEDs.

My info says -- the junk is still getting written... Because Congress hasn't addressed the Fanny/Freddy problem or the 100sBill of $ to keep them afloat.. Leftists want to claim that Fanny/Freddy were just victims of the evil banks. If they were competent to do their job -- that would be impossible..

A lot of what Wells Fargo did to damage themselves was to write 2nd mortgages for 100% of value. That's not a conforming loan under the Fanny/Freddy guidelines. And that's just stupid. But I don't think there's a strong secondary market for this kind of junk. So it didn't infect the whole system as much as the bundles that came thru F/F.

[merrylander]

Originally Posted by flacaltenn

MerryLander:

You are correct about who originates the writing. However, the banks only write them largely because they have a guaranteed buyer in Fanny/Freddy. As long as they follow the conforming rules SET BY the Feds, Fanny/Freddy will buy it. THUS -- Fanny/Freddy are the launderers of all the bad paper. They repackage it and sell it in bundles so that banks can keep pumping them out. The standards for this laundering (sp?) are all set by the FEDs.

My info says -- the junk is still getting written... Because Congress hasn't addressed the Fanny/Freddy problem or the 100sBill of $ to keep them afloat.. Leftists want to claim that Fanny/Freddy were just victims of the evil banks. If they were competent to do their job -- that would be impossible..

A lot of what Wells Fargo did to damage themselves was to write 2nd mortgages for 100% of value. That's not a conforming loan under the Fanny/Freddy guidelines. And that's just stupid. But I don't think there's a strong secondary market for this kind of junk. So it didn't infect the whole system as much as the bundles that came thru F/F.

Well if junk is being written then obviously the rules are NOT being followed. Since the broker and the originating bank take their points and run, they don't give a tinker's dam about the rules - what you folks like to call a "Moral hazard" - and that assumes these bastards have morals.

It was the big boys on Wall Street that screwed-up with their derivatives, first in assembling them and then betting against them. Note that Goldman Sachs reputation is currently circling the bowl.

But of course admitting where the blame really lies would deprive the righties of their favourite whipping boys.

Face it, if you want lessons in how to screw-up a financial system, just ask America.

[piece-itpete]

Immediately following the crash Freddie/Fannie tightened up standards, then as the depth became apparent they loosened them in an attempt to lubricate the market.

In other words, something something KY something something lol.

Pete

[flacaltenn]

Wait... Let me clearer about this, because this is a persistent sticky point on this board..

Fannie/Freddy Ring Master or Victim of Subprime?? From the NY Times (for crying out loud)..
http://www.nytimes.com/1999/09/30/bu...o-aid-mortgage

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets
-- including the New York metropolitan region -- will encourage those banks to
extend home mortgages to individuals whose credit is generally not good enough to
qualify for conventional loans. Fannie Mae officials say they hope to make it a
nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under
increasing pressure from the Clinton Administration to expand mortgage loans among
low and moderate income people and felt pressure from stock holders to maintain
its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing
Fannie Mae to help them make more loans to so-called subprime borrowers. These
borrowers whose incomes, credit ratings and savings are not good enough to qualify
for conventional loans, can only get loans from finance companies that charge much
higher interest rates -- anywhere from three to four percentage points higher than
conventional loans.

In fact -- not only were the politicians pushing for lower standards and for Fannie/Freddy to scoop up more, but they gave them TAX INCENTIVES to do so..

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income
borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the
subprime market.[117] In 1996, HUD set a goal for Fannie Mae and Freddie Mac that
at least 42% of the mortgages they purchase be issued to borrowers whose household
income was below the median in their area. This target was increased to 50% in
2000 and 52% in 2005.[118] From 2002 to 2006, as the U.S. subprime market grew
292% over previous years, Fannie Mae and Freddie Mac combined purchases of
subprime securities rose from $38 billion to around $175 billion per year before
dropping to $90 billion per year, which included $350 billion of Alt-A securities.

Fannie Mae had stopped buying Alt-A products in the early 1990s because of the
high risk of default.

AND -- they had enough morons stupid enough to do this waaay until the bust..

http://www.washingtonpost.com/wp-dyn...08081802111.ht

Discussing the company's successes, Mudd said one of Fannie Mae's achievements in 2006 was expanding its involvement in the market for subprime and other nontraditional mortgages. He called it a step "toward optimizing our business."

Internal documents show that even late in the housing bubble, Fannie Mae was drawn
to risky loans by a variety of temptations, including the desire to increase its
market share and fulfill government quotas for the support of low-income borrowers.

"By entering new markets -- especially Alt-A and subprime -- and guaranteeing more
of our customers' products at market prices, we met our goal of increasing market
share from 22 to 25 percent," Mudd wrote in a 2006 year-end report to the Fannie
Mae board dated Jan. 3, 2007.

In other internal documents, there was a common refrain: One of Fannie Mae's
objectives for 2006 was to "increase our penetration into subprime."

Buying Alt-A and subprime mortgages was part of Fannie Mae's effort to meet the
challenge. Fannie Mae sought to reap the rewards and protect itself from the
downside of the investments through a feat of financial engineering it called its
"Risk Transformation Facility," which was meant to transfer the riskiest elements
to other investors. {{{flacaltenn -- doesn't it make you proud that this is a GOVERMENT SPONSORED ENTERPRISE???}}}


"We engaged in the subprime market, for the first time closing deals to guarantee
and securitize subprime loans, with help from the new facility that allows us to
sell off the riskiest layers," Mudd wrote. By October, the company had signed $3
billion of such deals.

By March 2007, when Mudd sent the board an update, major subprime lenders were
failing, delinquency rates were climbing, and the emerging crisis was impossible
to ignore. The subprime sector "is in partial meltdown," Mudd wrote. He reported to directors that Fannie Mae's investment in subprime mortgage assets totaled about $55
billion. Mudd told the board that Fannie Mae had run its subprime portfolio through a
stress test to determine the losses in a hypothetical scenario that involved a
two-percentage-pointrise in interest rates and two years of 5 percent declines in
home prices. The resulting prediction: "zero credit losses net of earnings."

Yeah -- no problem there.

In short -- Fannie/Freddy weren't the only bundlers out there. But they do take in more than 1/2 of all single dwelling residential mortgages in the US. And because they were pressured by CRA requirements and pestered by the "social engineers" and offered tax bribes to back the crap --- They were the vacuum cleaner that sucked enough to create the whole frenzy..

Remember that Mudd said they had $55Bil of toxic crap on hand in 2007, they had already bundled and pass-off about 10 times that much since the late 90's. Banks didn't jump into this risky edge of the business until much later.

The way that the govt-ass-kissers can claim that Fannie/Freddy were innocent victims is due to an OFFICIAL govt cover-up (I mean report) from a hurridly organized Congressional Committee that of course absolved themselves and the GSEs from any and all responsibility.