My Dad forwarded this to me

[HEyHEY]

Now, he's not a thug. He just forwarded it. I'm a canuck. How much of this is BS?

"Black Cloud History Lesson There is a whole lot of finger pointing

going on in the world of politics this week. For those of you who would
rather

stay in the dark, stop reading. I would never want to upset your political

party's talking points and ruin your day. But for those who just enjoy

history or want to understand how or why we got to this point in financial

chaos:



1938 Roosevelt got through a democratically controlled congress Fannie Mae.




1970 Freddie Mac was created by democrats in congress 57-43 Senate and
234-192

House.



1977 the Community Reinvestment Act was passed by the democratic congress

(61-39 Senate and 292-143 House) and signed into law by Jimmy Carter. It

encourage banks and mortgage lenders to loan money for housing to people who

would not otherwise qualify (with Freddie and Fannie backing same by taking
the

paper)."



1995 President Clinton signed the executive order mandating lenders expand

their lending for mortgages to sub-prime borrowers (that means people who
would

not qualify under any criteria in a sane world). Failure to do so would
result

in the lending institution not having access to federal funds or the quasi

governmental Fannie and Freddie.



1999 Republican Senator Phil Gramm pushed through congress deregulation laws

(Gramm-Leach-Bliley Act) removing Depression era laws separating banking,

insurance and brokerage activities. (a really stupid move...Black Cloud's

opinion)The vote in the Senate was 98-1-1. McCain was the one who did not
vote,

another republican was the lone no vote. Biden and Harry Reid, who are now

saying it's all Bush's fault, voted for the bill. Even Obama this week

places the blamed on Gramm, but fails to mention that his running mate voted
for

it, and Clinton signed it into law.



2003 President Bush tried to get congress to amend Fannie Mae and Freddie
Mac

rules to disallow loans to people who would not qualify under normal
lending

institution rules for making loans. In other words, rescind the Clinton

Executive order which had by now become the rules of Freddie Mac and Fannie
Mae.

The democrats in the Senate (48) used the threat of filibuster to kill the
bill

(got to have that magic 60 in the Senate to stop a filibuster).



2006 Greenspan testified before congress that Fannie Mae and Freddie Mac
were

both a house of cards and needed a lot more oversight and controls in case
this

country found itself in a recession in the future. That duty falls to the
U.S.

Senate Committee on Banking, Housing and Urban Affairs. Democrat Chris Dodd
is

Chairman He wasn't thrilled with Greenspan's advice, because he was the

number one campaign money receiver from Fannie and Freddie over the years.
Obama

was number 2, and he raked his largess in two years. Now Dodd is saying he
may

go for the 700 billion, but he wants more oversight, which he had in the
first

place, but doesn't want to point his finger at himself for not doing his

job, even when told there was a big problem. Every single piece of
legislation

the republicans have put up to regulate the financial industry since 2000
has

been killed in the senate by democrats. 95% of the homeowners are paying
their

monthly mortgage payments.

It's those 5% that are facing foreclosure that will cost the taxpayers a

trillion or so if the bailout goes through. But when the politicians
start

pointing fingers, watch closely. Note that they are nowhere near a mirror.
And

[ColbertWatcher]

1. Pfft. Another "there's no difference between Dems and the GOP" email.

Ask dad for some links or proof to back up his claims.

Give him a day or two to respond.

And then after he "responds" ask him who was in charge when the shit hit the fan? Ask him why the failure happened at the end of Dubmya's term, with only weeks to go before an election?

[angstlessk]

2. I admit I am sorely out of the loop on this baleout, but if 5% is causing

the entire economy of the earth to crumble..god help us all!!!!

[atreides1]

3. Some History

Fannie Mae was founded as a government agency in 1938 as part of Franklin Delano Roosevelt's New Deal to provide liquidity to the mortgage market. For the next thirty years, Fannie Mae held a virtual monopoly on the secondary mortgage market in the United States.

In 1968, to remove the activity of Fannie Mae from the annual balance sheet of the federal budget, it was converted into a private corporation. Fannie Mae ceased to be the guarantor of government-issued mortgages, and that responsibility was transferred to the new Government National Mortgage Association (Ginnie Mae). In 1995, Fannie Mae began receiving affordable housing credit for buying subprime securities. In 1999, Fannie Mae, the nation's biggest underwriter of home mortgages, was 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 2000, due to a re-assessment of the housing market by HUD, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals. In 2004, these rules were dropped and high-risk loans were again counted toward affordable housing goals.

Fannie Mae was put under a conservatorship of the U.S. Federal government on September 7, 2008


No actual guarantees
Fannie Mae receives no direct government funding or backing; Fannie Mae securities carry no government guarantee of being repaid. This is explicitly stated in the law that authorizes GSEs, on the securities themselves, and in many public communications issued by Fannie Mae.

Neither the certificates nor payments of principal and interest on the certificates are guaranteed by the United States government. The certificates do not constitute a debt or obligation of the United States or any of its agencies or instrumentalities other than Fannie Mae.

[Warpy]

4. He missed a couple of things

In 1968, Fannie Mae was privatized, largely to get the debt off the government's balance sheet during the Vietnam War. Yes, Johnson was responsible for that one.

That meant that in 1970, Freddie Mac was created so that Fannie Mae wouldn't be a monopoly.

That actually worked well until the financial industry was deregulated to the point that mortgage debt could be sold anywhere and as exotic investment vehicles that had little resemblance to the original mortgage.

Even that might have worked had we not had a speculative bubble in housing.

[RoyGBiv]

5. Selective use of facts ...

I like the way this gem was slipped in there:

"Every single piece of legislation the republicans have put up to regulate the financial industry since 2000 has been killed in the senate by democrats." Had to walk outside and kill a brick wall after reading that one.

Anyway, it's basically trying to blame poor homeowners for the problems, which is utter bullshit.

There's been several studies of the effects of encouraging low-income individuals to purchase homes, and they aren't the problem. I'll try to find one. Seems one was published a few days ago ... or an article about one was ... or something.

[Dhalgren]

6. Well, let me be the first to tell you that this is bull shit.

Not only does it not tell even a third of the story, it interprets a lot of the third it does tell in a dishonest way. Then to top it all off, He ends it by saying that 95% of all this Democratic skulduggery is working just fine and only 5% is in trouble! So what is the problem? The problem must be rich Wall Street Republicans and their President wanting to lie and steal - that's really the only conclusion you can draw with those anti-penultimate and penultimate sentences...

[NC_Nurse]

7. You need to send him that animated video from Faux news with Greta Sans

Substance. I don't remember the name of the link, but the cartoonist was Michael something...damn!

It basically talks about how the RW'ers are trying to blame this thing on the poor. Pretty funny too.

[ThatPoetGuy]

8. Gramm-Leach-Bliley

The author of that email said,

"1999 Republican Senator Phil Gramm pushed through congress deregulation laws (Gramm-Leach-Bliley Act) removing Depression era laws separating banking, insurance and brokerage activities. (a really stupid move...Black Cloud's opinion)The vote in the Senate was 98-1-1. McCain was the one who did not
vote, another republican was the lone no vote. Biden and Harry Reid, who are now saying it's all Bush's fault, voted for the bill. Even Obama this week places the blamed on Gramm, but fails to mention that his running mate voted for it"

Hardly any of that is true. Yes, the Gramm-Leach-Bliley Act was "a stupid move," and it should be blamed for the crisis we're facing today. But the vote in the Senate was not 98-1-1; it was 54-44. All 54 who voted in favor were Republicans. All 44 who voted against it were Democrats.

See for yourself:
http://www.govtrack.us/congress/vote.xpd?vote=s1999-105

The email claims that McCain did not vote on it. This is false. McCain voted in favor of it.

The email claims that Joe Biden voted in favor of Gramm-Leach-Bliley. This is false. Joe Biden voted "Nay."

The email claims that Harry Reid voted in favor of Gramm-Leach-Bliley. This is false. Harry Reid voted "Nay."

The author of that email is either massively uninformed or a lying through his or her teeth. Either way, nothing in it should be trusted.

ThatPoetGuy

[applegrove]

9. Boy the GOP is desperate not to be holding the bag for their push towards

deregulation.

[wryter2000]

10. I can't speak to all of it

Fannie and Freddie were just fine the way FDR established them. The problems came later on when they were deregulated and privatized. Unfortunately, some Dem Presidents had a hand in that.

I'd ask, why after all these years did Frannie and Freddie just now become a problem? The answer is Phill Gramm.

The mortgages granted under the Comminity Reinvestment Act are NOT the problem. Very few of those have gone belly up. In general, most Dem actions to force banks to give loans to minorities involve outlawing redlining and that sort of thing. No Dem program that I'm aware of told banks they HAD to give out bad mortgages. They simply told lending institutions they couldn't discriminate based on race and/or zip code.