Party of Regulations? lol - Investigate Rahm

[EmptyMan]

http://firedoglake.com/2009/12/23/jane-hamsher-grover-norquist-call-for-rahm-emmanuel%E2%80%99s-resignation/

http://static1.firedoglake.com/common/images/avatars/1.jpg Jane Hamsher, Grover Norquist Call for Rahm Emanuel’s Resignation (http://firedoglake.com/2009/12/23/jane-hamsher-grover-norquist-call-for-rahm-emmanuel%e2%80%99s-resignation/)



It's long, they have a nice video, rep the site.

[EmptyMan]

No inspector general giving oversight to fannie and freddie, b/c Rahm passed a law before he went in congress that had a loophole to fire the acting attorney general. Since that time the White House has refused to appoint a new attorney general.

[Winehole23]

Progressive voters are starting to look for scapegoats. Jane Hamsher has just taken aim at Rahm Emanuel, Obama's political fixer. Her open letter collaboration with Grover Norquist, in the first year of Obama's term, shows how short the road from hope to disillusionment has been for some of Obama's more unabashedly liberal supporters.

[Winehole23]

Related:Treasury will back losses (http://online.wsj.com/article/SB126168307200704747.html) of any amount at Fannie and Freddie for the next three years.

[Nbadan]

Progressive voters are starting to look for scapegoats. Jane Hamsher has just taken aim at Rahm Emanuel, Obama's political fixer. Her open letter collaboration with Grover Norquist, in the first year of Obama's term, shows how short the road from hope to disillusionment has been for some of Obama's more unabashedly liberal supporters.

Don't you have to like someone at first to make him a scapegoat? Rahm has been the target of many progressive liberals since his congressional days and many blame him for all the congressional surrendering the W.H. has been doing and his past connections to freddie and fannie mac...

..that said, Jane Hamsher is sleeping with a lying dog in Grover Norquist....this is the guy who wants to dissolve the union by sinking the government in a bath-tub of debt...and he would have been successful to if McCain would have won...

[Nbadan]

Related:Treasury will back losses (http://online.wsj.com/article/SB126168307200704747.html) of any amount at Fannie and Freddie for the next three years.

....it's not money, it's a guarantee that the govt. can make 10% or more on...


So far, Treasury has provided $60 billion of capital to Fannie and $51 billion to Freddie. Mahesh Swaminathan, a senior mortgage analyst at Credit Suisse in New York, said he didn't believe Fannie and Freddie would need more than $200 billion apiece from the Treasury. But he and other analysts have said the market would find a larger commitment from the Treasury reassuring.

In exchange for the funding, the Treasury has received preferred stock in the companies paying 10% dividends. The Treasury also has warrants to acquire nearly 80% of the common shares in each firm.

[Nbadan]

Jane Hamsher and Grover Norquist are trying to revive something that has already been investigated, with hearings held during the Republican-controlled 108th Congress by the House SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION when guess who was chair?

FREDDIE MAC: ACCOUNTING STANDARDS ISSUES RAISED IN THE DOTY REPORT (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=108_house_hearings&docid=f:89960.pdf)

....And it was already investigated...

Freddie Mac Misrepresented Income, Says SEC (http://abcnews.go.com/print?id=6201900)

Rahm was not named in the complaint..


Freddie Mac agreed to pay a $50 million penalty in 2007 to settle the SEC complaint and four top executives of the Federal Home Loan Mortgage Corporation were charged with negligent conduct and, like the company, agreed to settle the case without admitting or denying the allegations.

This is amateur FAUX News hour material.... Jane Hamsher EXPOSED!

[Winehole23]

The government pays 100s of billions of dollars more for Fannie and Freddie, and gets preferred shares (10% OF WHAT, RIGHT?) and possibly worthless warrants in return.

Oh, and Fannie and Freddie get to hoover up even more toxic assets, knowing that the USG will back unlimited losses. What could possibly go wrong?

[Winehole23]

Cenk Uygur's two cents: an ONGOING investigation of Fannie and Freddie was scotched by a bill introduced by Mr Emanuel, Obama refuses to reappoint the IG for agencies we're about to give 100's of billions more to. Meanwhile, the statute of limitations on Mr Emanuel for any possible wrongdoing will run out in 2010-2011.

This stinks to high heaven, Dan


She went over and got Grover Norquist, who is one of the biggest right wingers in the country — we’ve had him on the program here, he’s the President of Americans for Tax Reform– and they did a joint letter against Rahm Emanuel.


Now wait a minute. You see, this gets everybody’s attention. And everybody’s talking about it online today, and I’m sure in all the media. Oh, it’s actual bipartisan work here by the left wing and the right wing to say Rahm Emanuel’s doing something wrong.

So what’s it on? Well, it turns out he was on the board of Freddie Mac back during 2000 and 2001. They claim he did some things on that board that need to be investigated. And in fact, that an investigator was investigating it — Inspector General Ed Kelley — and he was stripped of his authority by the Obama Administration’s Justice Department.


And that the Justice Department used a bill, or a loophole in a bill, passed by: Rahm Emanuel, before he left congress. And that the statute of limitations is going to run out in 2010 and 2011 for investigating what Rahm Emanuel was doing on that board and what the rest of the board was doing at Freddie Mac.


In fact, right now they’re negotiating to double the commitments to Fannie and Freddie for a total of $800 billion by December 31 and Jane Hamsher and Grover Norquist are saying we shouldn’t let them have that money, it’s another back door TARP and they’re going to funnel that money to toxic assets, and we need to know what they did on that board in the first place, and why they got rid of that inspector general.


Since they got rid of the Inspector General, no one has replaced them. And this is an enormous part of our economy, and Fannie and Freddie have six trillion dollars in mortgages without any oversight. And how much of this is Rahm Emanuel responsible for?
http://seminal.firedoglake.com/diary/20891

[Winehole23]

Now those are heavy questions. And that’s going to get everybody’s attention in Washington. So if Rahm Emanuel thought he could ignore the left, which is what he smugly told the WSJ just about a week ago, saying “heh heh, there’s nothing to be concerned about on the left,” well you just got a two-by-four across the head. Are you concerned now, Rahm? Did Jane catch your attention, about how maybe you need to be investigated and how you squelched that investigation?


My guess is, all of a sudden, you’re not so smug any more.


Okay, look. That’s what you gotta do. First of all, you have to do it because it’s true. Wait a minute, what happened in 2000-2001, I don’t give a damn if Rahm Emanuel is a Democrat or a Republican. And why did you get rid of the Inspector General? Maybe you’ve got a good reason for it. But they need to tell us.


And funneling this $800 billion, before the end of the year, to these guys who screwed up before? These things, Fannie and Freddie, are in a lot of ways area disaster. They’re funneling the toxic assets to there — what the banks can’t get rid of, the mortgages etc they’re funneling all to there.


No, I need to know exactly what’s happening there before we funnel another eight hundred billion dollars there. So on the substance, Jane Hamsher and Grover Norquist are right. And that’s a second reason why this letter is so important.


Because look. On the right wing, we could potentially have allies against Wall Street corruption. And against using taxpayer money for things we did not agree to, whether that’s going after the Fed or Ben Bernanke or Tim Geithner or in this case Rahm Emanuel. On the substance, they’re right.


Now we have to look into this issue more — I’m not saying Rahm Emanuel is guilty. That’s why they were investigating it before it got shut down. All right? So you need to reopen that investigation.

[Nbadan]

The government pays up to 400 billion dollars more for Fannie and Freddie, and gets preferred shares (10% OF WHAT, RIGHT?) and possibly worthless warrants in return.

Oh, and Fannie and Freddie get to hoover up even more toxic assets, knowing that the USG will back unlimited losses. What could possibly go wrong?

The govt. pledged $200 million each back in Nov. 2008 and so far they've lent out $60 billion of capital to Fannie and $51 billion to Freddie.


The federal government this year was forced to take over Freddie Mac and a sister federal mortgage agency, Fannie Mae, pledging at least $200 billion in public funds

ABC News Nov 2008 (http://online.wsj.com/article/SB126168307200704747.html)

..so what's changed? :deadhorse

[Winehole23]

Caps were removed:


The Obama administration's decision to cover an unlimited amount of losses at the mortgage-finance giants Fannie Mae (http://online.wsj.com/public/quotes/main.html?type=djn&symbol=fnm) and Freddie Mac (http://online.wsj.com/public/quotes/main.html?type=djn&symbol=fre) over the next three years stirred controversy over the holiday.


The Treasury announced Thursday it was removing the caps that limited the amount of available capital to the companies to $200 billion each.
http://online.wsj.com/article/SB126168307200704747.html

[Winehole23]

The USG backing notionally unlimited losses at Fannie and Freddie at a time when they have no inspector general frankly invites mischief, wouldn't you say?

[Nbadan]

The real shame is that Freddie and Fannie are backing loans that should be backed by private lenders, the toxic loans are a bi-product of an unregulated market turned soar, so now everyone wants to be bought out, bailed out or subsidized...banks still have trillions of dollars of bad loans on their books, this move reassures the banks, insurers, share-holders and deposit holders that there is some level of stability and security, a corporate safety-net if your will....ironic, huh?

[Winehole23]

The real shame is that Freddie and Fannie are backing loans that should be backed by private lenders, Bingo.

The percentage of subprime mortgages in Freddie and Fannie's portfolio increased about 100% from the summer of 2007 (the beginning of the credit crunch) to the fall of 2008 (the passage of the TARP.) Clearly, using the GSE's to launder shitty risk has been part of the strategy since the beginning of the downturn.

The lack of oversight by an IG combined with the government's new pledge to back unlimited losses for the next three years bodes ill for the US taxpayer. Why remove the caps, if so far we've only burned through one-quarter of the amount pledged? It makes no sense at all, unless the market believes that $290 billion more can't fix Fannie and Freddie.

Given that Fannie and Freddie hold $6 trillion in mortgages and are the main originator for new home loans, that's hardly unthinkable. Some analysts think the housing market has another 15-20% on the downside before things turn around.

[Winehole23]

Oh, and why doesn't Obama nominate an IG for Fannie and Freddie? Don't they need one, and doesn't the US taxpayer deserve it?

[admiralsnackbar]

I'm all in favor of Ag Holder investigating Emanuel for fraud/malfeasance before the 10 year statute of limitations runs out.

If it happens, however, I'll probably be boiling my boots to medium-rare for a crow-tastic repast.

[Wild Cobra]

No inspector general giving oversight to fannie and freddie, b/c Rahm passed a law before he went in congress that had a loophole to fire the acting attorney general. Since that time the White House has refused to appoint a new attorney general.
OK, a simple question.

The Attorney General is a member of the presidents cabinet. How can any law passed be constitutionally enforced upon the executive branch?

I say serious FAIL!

[admiralsnackbar]

OK, a simple question.

The Attorney General is a member of the presidents cabinet. How can any law passed be constitutionally enforced upon the executive branch?

I say serious FAIL!

It was a hair's breadth from happening to Nixon had he not resigned, so while it remains unprecedented, it is not beyond the bounds of reason -- particularly if this story grows enough to be a liability for the Potus or even more broadly, the Dems. Elections are right around the corner, and the polity s thirsty to see the sort of justice the POTUS promised in his campaign.

But to reiterate my earlier point along with your own: it is damn unlikely to happen, you're right.

[Winehole23]

If it happens, however, I'll probably be boiling my boots to medium-rare for a crow-tastic repast.http://video.google.com/videoplay?docid=5128598889708306325#docid=-414413418960249102 (http://video.google.comggb/videoplay?docid=5128598889708306325#docid=-414413418960249102)

http://video.google.com/videoplay?docid=5128598889708306325#

[admiralsnackbar]

http://video.google.com/videoplay?docid=5128598889708306325#docid=-414413418960249102 (http://video.google.comggb/videoplay?docid=5128598889708306325#docid=-414413418960249102)

http://video.google.com/videoplay?docid=5128598889708306325#

As long as I don't have to nosh on Klaus Kinski's kicks, I'm good. :lol

[Winehole23]

As long as I don't have to nosh on Klaus Kinski's kicks, I'm good. :lolKinky.

Tma26WSccqY

[ChumpDumper]

It was a hair's breadth from happening to Nixon had he not resigned, so while it remains unprecedented, it is not beyond the bounds of reason -- particularly if this story grows enough to be a liability for the Potus or even more broadly, the Dems. Elections are right around the corner, and the polity s thirsty to see the sort of justice the POTUS promised in his campaign.This story will go nowhere. You can't put it on a bumper sticker.

[Winehole23]

This story will go nowhere. You can't put it on a bumper sticker.That's too bad. It's potentially another really big stickup of the US taxpayer by shady GSEs with the total complicity of our elected representatives.

[Winehole23]

As long as I don't have to nosh on Klaus Kinski's kicks, I'm good. :lolHerzog added garlic, herbs and duck fat to his own shoes and simmered them long time before he ate them in public.

I would expect no less from you, snackbar.:hat

[Marcus Bryant]

The government is positioning the country for a larger financial market meltdown in the future. Nothing has changed to rid ourselves of the TBTF public backstop (if anything, it's in the process of being expanded and codified) nor of the private gain/public loss model of the GSEs. The Feds have made it quite clear that they will clean up any mess in the future created by Wall Street, while the executives of Wall Street firms are still free to run their firms with very little personal skin in the game, yet with claims on the upside.

The sum total of the federal government's interventions in banking and more broadly in the financial services industry was supposed to provide stability in the financial markets, temper inflation, smooth the business cycle, and, in general, promote the general welfare. Instead we have even greater instability, a dollar which has lost 95% of its value since the Fed has come into existence, nastier business cycles, and a system which subsidizes the wealthy to capture an even larger part of the national income.

Allegedly left-wing politicians suckle at the teat of Wall Street and provide them the largest handouts while spouting empty rhetoric about their benefactors' greed and what not.

Right-wing politicians sell out their small businessmen clientele, by ensuring they enjoy capitalism while large businessmen enjoy a managed economy.

Yet every two years we pretend that there's a real distinction, and waste time attempting to make that distinction, when it's rather obvious once you step outside the political stadium that the game you've been watching is an intra-squad contest.

[Winehole23]

Like Chumpy said, you can't put that on a bumper sticker. The prevalence of ignorance, stupidity and willful blindness make it totally irrelevant that you're most likely correct.

Knowledge=powerlessness.

[Winehole23]

... the Treasury Department announced (http://online.wsj.com/article/SB126168307200704747.html) that they would uncap their support of Fannie and Freddie for the next three years, which could expose the government to hundreds of billions of dollars in losses. I find plausible the speculation that Treasury could announce a reduction of principal (http://www.calculatedriskblog.com/2009/12/fannie-freddie-and-struggles-of-hamp.html) as part of their mortgage modification program, which would result in major losses of mortgage-backed securities, which Fannie and Freddie could absorb. This is part of a pattern of artificially propping up home prices (http://www.calculatedriskblog.com/2009/12/government-housing-support-update.html) that should otherwise go down to historically appropriate levels.
To help keep this straight, here is a list of the status of a number of programs:
• Housing Tax Credit: Buyer must sign a contract by April 30th and close by June 30, 2010 to qualify [...]
• Federal Reserve MBS Purchase Program: This is scheduled to end March 31, 2010, from the Fed:
[T]he Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter of 2010.
• Treasury MBS Purchase Program: This program will end Dec 31, 2009, from the Treasury:
The program that Treasury established under HERA to support the mortgage market by purchasing Government-Sponsored Enterprise (GSE) -guaranteed mortgage-backed securities (MBS) will end on December 31, 2009. By the conclusion of its MBS purchase program, Treasury anticipates that it will have purchased approximately $220 billion of securities across a range of maturities.
• HAMP Trial Programs Extended: The Treasury has extended any expiring trial modification program until at least Jan 31, 2010, from the Treasury:
In order to provide servicers an opportunity to remain focused on converting eligible borrowers to permanent HAMP modifications, effective today and lasting through January 31, 2010, Treasury is implementing a review period for all active HAMP trial modifications scheduled to expire on or before January 31, 2010. Active HAMP trial modifications include trial modifications that have been submitted to the Treasury system of record that have not been cancelled by the servicer.
• Support for Fannie and Freddie: Treasury has uncapped the support for Fannie and Freddie for the next three years.
• Fannie / Freddie Low-Cost Refinancing program. This is the program that allows homeowners with Fannie and Freddie mortgages to refinance loans up to 125 percent LTV. I believe this program expires June 10, 2010.
• FHA Loose Lending Standards: In his Dec 2nd testimony to Congress, HUD Secretary Donovan said the FHA would propose tighter lending standards by the end of January 2010.
• Various Holiday Foreclosure Moratoria: Fannie, Freddie and most of the large banks routinely suspend foreclosure activity over the holidays. This has been true this year too. Fannie and Freddie’s holiday moratoria ends Jan 3, 2010, and Citi’s holiday moratoria ends Jan 17th. The other banks programs end in early January too.

It’s clear to anybody paying attention that the government is employing a variety of strategies to keep housing prices stable, which by turn improves the position of the banks. This latest move to use Fannie and Freddie to buy up large numbers of bad mortgages (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a5I.PD8OUZB0) is just another example. I don’t have a problem with reducing principal payments if that is indeed the strategy, but we really have no idea, and there is literally no oversight of these agencies held in 80% by the taxpayers – they fired their own Inspector General (http://www.huffingtonpost.com/2009/11/10/fannie-and-freddie-fire-t_n_353018.html), after all.


Let’s just say I’m troubled by an unlimited bailout – seen by the markets as such (http://money.cnn.com/2009/12/28/news/companies/fannie_freddie/) – of these agencies without the ability to understand why. That’s especially true given the crowing about how the government is getting most of its TARP money back, while failing to discuss this and other larger vehicles to aid banks with taxpayer dollars.

There is a danger associated with lumping in this particular action with the long-held myth on the right (http://washingtonindependent.com/72143/untruths-5) that the economy crashed because Fannie and Freddie used the Community Reinvestment Act to lend to poor (black?) people. But that’s not a good enough reason not to demand to know just what the government is up to (http://agonist.org/numerian/20091226/and_you_thought_you_were_scaling_back_your_gift_gi ving_this_christmas) in giving two GSEs what amounts to an unlimited slush fund, undergirding close to the entire mortgage market in the US. And what Tim Geithner is saying in public about this (http://www.newsweek.com/id/227740/output/print) (”we are going to focus the bulk of the financial force on bringing interest rates and mortgage rates down to cushion the fall in housing prices and help stabilize home values”) shouldn’t reassure anyone.


http://news.firedoglake.com/2009/12/28/the-fanniefreddie-uncapping-more-important-than-the-coalition-questioning-it/

[Winehole23]

Face it, this message about Rahm is important: if he’s created a giant slush fund in the center of the housing market to suck up the losses as his buddies on Wall Street are forced to finally mark-to-market, will we be surprised by his immense reward afterwards? What’s the reason for making the decision ahead of when Congressional oversight would kick in? And why are progressives suddenly citing the Christopher Cox SEC (which missed Madoff despite being led right to it) as the final word in investigations?


Principles over personalities, please.

[Winehole23]

I don’t know if anything illegal HAS occurred, which is why I want an investigation.


Moreover, even without thinking something illegal has occurred, I, as a goddamned taxpayer, think I have the right to know where INFINITY DOLLARS of my taxes might be going.


Yet, as of today, not a clue. That irritates me. The fact that a man who screwed up once as a board member, once again as a Congressman, is now chief of staff shepherding this mess of a bailout, that infuriates me. Even if it’s all honest stupidity, how far can Rahm fail upward on ONE issue?

[Winehole23]

Rahm Emanuel was appointed to the board of Freddie Mac in February of 2000 (http://abcnews.go.com/Blotter/story?id=6201900&page=1) by Bill Clinton. It was a patronage job, as these board appointments are, where the director gets a big salary for doing little work as a payoff to political allies.


According to the Chicago Tribune (http://www.chicagotribune.com/news/politics/obama/chi-rahm-emanuel-profit-26-mar26,0,5682373.story), during his tenure the board was notified by executives of their plans to misstate the earnings of Freddie Mac: “On Emanuel’s watch, the board was told by executives of a plan to use accounting tricks to mislead shareholders about outsize profits the government-chartered firm was then reaping from risky investments. The goal was to push earnings onto the books in future years, ensuring that Freddie Mac would appear profitable on paper for years to come and helping maximize annual bonuses for company brass.” (3/5/2009)


The Tribune further reported that “during his brief time on the board, the company hatched a plan to enhance its political muscle. That scheme, also reviewed by the board, led to a record $3.8 million fine from the Federal Election Commission for illegally using corporate resources to host fundraisers for politicians. Emanuel was the beneficiary of one of those parties after he left the board and ran in 2002 for a seat in Congress from the North Side of Chicago.”


In December 2003, a report (PDF (http://abcnews.com/images/Blotter/specialreport122003.pdf)) was written by Armando Falcon Jr., head of the entity charged with oversight of Freddie Mac, the Office of Federal Housing Enterprise Oversight (OFHEO). The report asserts that company executives “demanded whatever level of earnings management was necessary to achieve steady rapid growth in Enterprise profits.” It also “provided evidence that non-executive members of the Board were aware, and supportive of, management in this regard, including the use of derivatives to improperly manage the earnings of Freddie Mac,” citing notes from a June 2, 2000 meeting of the Board of Directors (p. 24).


Attending board meetings was one of the things Rahm had to do. The minutes indicate he was made aware by the executives of their plans to misstate earnings and deceive shareholders. When they had to restate earnings, $7 billion in shareholder worth just disappeared. Numerous civil suits were filed, including one on behalf of the Ohio Public Employees Retirement System, who suffered losses of up to $27.2 million as a result of the fraud:


http://www.reuters.com/article/idUSN2362909020080123

(http://www.reuters.com/article/idUSN2362909020080123)
The OFHEO report concluded that board had “failed in its duty to follow up on matters brought to its attention.” The SEC filed a complaint (PDF (http://www.sec.gov/news/press/2007/2007-205.htm)) saying that Freddie Mac had “misreported profits by billions of dollars in order to deceive investors between the years of 2000 and 2002,” per ABC News (http://abcnews.go.com/Blotter/story?id=6201900&page=1).


I spoke to Bill Black about it, and he said it was “shocking” that in 10 years, nobody from Fannie/Freddie had been indicted. He was appalled.


The only problem with singling Rahm out is that everyone who has been on the Fannie/Freddie boards for the past 20 years needs to be investigated, from Dennis DeCancini to Jamie Gorelick (http://www.slate.com/id/2200160/). It’s only Rahm’s current role in determining what happens to Fannie and Freddie now that makes him more worthy of distinction.