Sacred Tropes and Right-Wing Cows

Sister Toldjah:

Remember when Barack Obama was upset at the bonuses paid to AIG execs?


When the bubble burst in 2007, Fannie and Freddie began to lose billions of dollars of investments in mortgage-backed securities (MBS) guarantees. In September 2008, the Federal Housing Finance Agency (FHFA) took Fannie and Freddie into conservatorship as a result of mounting losses stemming from the financial crisis.The Enterprises became de facto government entities, funded by preferred stock purchase agreements from the Department of the Treasury (Treasury). Today, the Enterprises remain a multi-billion-dollar drag on the federal government’s finances. Since they entered conservatorship, Treasury has provided $169 billion to Fannie and Freddie – and the payouts are scheduled to continue with no end in sight. According to recent FHFA projections, by the end of 2014, Treasury assistance to the Enterprises will total $220 billion to $311 billion.

Since the Enterprises have become government-funded entities, lavish payment packages have been doled out to their senior executives, and taxpayers have been footing the bill. In 2009 and 2010, the Enterprises’ top six officers were given a total of more than $35 million in compensation. Of that amount, a total of $17 million in compensation was given to the CEOs of the Enterprises. Additional bonus installments for 2010 may still be forthcoming, and the two CEOs stand to make a total of $12 million in 2011. In addition, an executive has been awarded a substantial signing bonus – $1.7 million – upon joining the Fannie Mae. As these figures indicate, senior executives at Fannie Mae and Freddie Mac have become the highest compensated workers on the federal payroll – making as much as eight times more than the President of the United States. The executives even make more than their conservator, FHFA Acting Director Edward J. DeMarco.

Yeah, I know, I’m tap-dancing in a mine field for even bringing this stuff up. Somebody will point to this as evidence we’re all a bunch of tea-kissing whip-baggers or something. But since everybody already hates us what the fuck.

I’ve been trying to figure out the housing crash/financial meltdown for a couple years now. Here’s what I know:

1) It didn’t happen overnight, it took years for everything to get in place. Democrats and Republicans are both in it up to their eyeballs. Banks were involved but they weren’t the only ones.

2) I’ve read lots of explanations for what went wrong. All of them seem to make sense, but none of them seem to agree with the others. I’m not an expert so I don’t know who is telling the truth. Maybe none of them.

3) Cry racism all you want, but when you make loans to people who can’t afford to pay them back you’re going to have a high rate of defaults. On the other hand it makes no sense to pay bonuses to executives who drove their companies into a ditch.

4) Things aren’t going to change as long as we keep sending the same people back to Washington.

5) Obama is the worst president ever.

This entry was posted in 2012 Elections, Barack Obama, Corruption, Crony Capitalism, Democratic Party, Financial Meltdown, Housing Bubble, Politics, Racism, Republican Party, Uncategorized, Wall Street Banks and tagged . Bookmark the permalink.

36 Responses to Sacred Tropes and Right-Wing Cows

  1. parentofed says:

    sister Toldjah is a truth-teller and a daily read for me.

  2. HELENK says:

    You have to admit ACORN works better than SUSWBA (Scamming Uncle Sugar With Bullshit Acronyms)
    2 hours ago

  3. yttik says:

    “But since everybody already hates us what the fuck.”

    Not everybody, only the cool kids. Don’t worry about them, in a few years they’ll be about as popular as pet rocks.

  4. DandyTiger says:

    Honk, honk (from the DHS).

    • Lola-at-Large says:

      Geez, conservative men are no better than liberal ones. I knew that already, but it’s not pleasant having that fact reinforced daily.

      • DandyTiger says:

        There are asshole men and asshole women of every stripe.

        • 1539days says:

          Even in that segment. The right wing guy was grading Lara Logan vs. Elizabeth Hasselbeck, and the left wing one was saying how easy conservative women were at the bar at 2am.

          This show really sucks when Greg Gutfeld isn’t on.

  5. yttik says:

    The housing bubble was a perfect storm. Certainly Freddie/Fannie, greed, politics, and crony capitalism all played a role, but my theory is that people started putting the advice of “experts” above their own instincts and common sense. Financial experts, loan officers, realtors were all telling people they could afford the unaffordable. A few dozen so called expert economists told the Gov everything was fine. Over and over again people were told they just didn’t understand high finance and to not worry their pretty little heads about it.

    In this country it has always been tradition to distrust bankers and the government. Our ancestors are probably laughing their asses off at our stupidity, but that’s what I think caused the crash, Americans suddenly believing that both government and banking had our best interests at heart.

    • myiq2xu says:

      If I had to pick a single villain it would be the culture of greed aka “materialism.”

      Gotta have it, gotta have it now!

      • DandyTiger says:

        Do you mean wall street is just a convenient scapegoat, and in reality they’re just the dealers and most of us are the addicts of get rich quick?

        Nah. That would imply OWS should instead be occupying themselves.

  6. kc says:

    After listening to MSNBC for days on end (my husbands default channel), FOX is starting to sound fair and balanced–really.

    My huband isn’t an Obot though–he was the first person I heard say that Obama had the thinnest resume’ of anybody ever running for president. I don’t know why he puts msnbc on all the time–except when I bother to change it. It’s been non-stop bashing of whatever r. is on top or getting close to the top of the polls.

  7. DandyTiger says:

    Ouch, Daily show just slaughtered OWS in one comedy skit. They must have gotten the memo: take them out.

  8. 1539days says:

    I keep putting off writing about this because it involves effort, but my opinion about the financial crisis is this.

    1. Don’t blame Wall Street alone. They were trying to extract profit and they did some shady stuff, but the US government gave them the blueprint. Most of Europe and some of Asia is in trouble as well. Everybody was overextending themselves.

    2. The housing bubble replaced the tech bubble. The tech bubble replaced the peace dividend. The peace dividend took over the silicon valley bubble which took over the pentagon bubble. This has been coming for a while.

    3. Housing has been inflating for decades, but the lack of a “safe” investment in the ’00s blew it up. The government told banks they had to offer a certain percentage of mortgages to low-income (usually high-risk) home buyers. When that pool dried up, they sweetened the pot. Soon, the interest rates on mortgages were so low, they sold off the loans to investors on the promise that the 5% mortgage now would become 7% after the rate reset. It was the reserve of the S&L scandal, where banks made riskier (higher interest) investments with the safety of FDIC backed deposits.

    4. We’ve been screwed for a decade. Even if people listened to John McCain and others about Fannie and Freddie, eliminating the mortgage requirements or eliminating the mortgage interest deduction would have put the country into an instant recession. It’s just worse because we waited longer, but we weren’t going to “avoid” anything.

  9. HELENK says:

    here goes occupy Dallas

    JUST IN: Media being told to move away from the Occupy Dallas encampment. Streets near City Hall are blocked off.

  10. timothy2010 says:

    Off topic but if I may vent. I setest Dennis Miller and Bill O’Reilly. They did a cheap shot about gay penguins. idiots. Mocked made light whatever. Believe it or not the Penn State scandel is hitting the gay community hard. Maybe its easier to say faggot than disturbed mentally ill person who I trusted. Faggot is just one word. i cringe when I think of O’reilly . Can he be that insensitive. Be as anti-gay as you want. Tell me I am wrong for existing I don’t care. like it or not though there are children out there who are gay and they are hearing your pathetic attempt at humor poison.
    Also miller is vile my mother used to work with his mother at a women’s hospital in Pittsburgh. My mother grew up dirt poor(outhouse poor) got knocked up at 15.had me at 17. in total she raised with my father 5 kids and i am the only one to ever be arrested(went to sleep in the wrong house years befor Robert Downey Jr)
    his mother is evil. My mom never had a chance to chase a dream but she got a GED and then an RN while raising 5 kids. She says worsh instead of wash and believes the plral of you is “yinz” Mr millers mother was very dismissive and often mocked my mom. Didn’t stop my mother she ended up with a 6 figure job with an associates degree, A high school drop out pregnant teen who gave birth to six kids(one died) think she deserves two of those bacon in a bottle mentioned on another thread

  11. kc says:

    Bill O is a blow hard–he’s not a fav.

  12. timothy2010 says:

    One last thing and then I will stop being a blog hog
    i grew up poor. We had zip. In high school i was so paranoid about being clean i used to wash my clothes in the bath tub and march all over them then to iron them dry, i Lived in what most would call a shack. Would like to say i started working at twelve but it would be a lie. My older brother and i picked corn set up bowling pins and delivered papers. i was an extreme slacker he did most if not all the work. We had a Toyota Corolla that had to have a hair dryer taken to it every morning. Things were always tight but we never got free lunches or even reduced. That would have killed my dad. We paid for lunch even if it meant jelly bread for dinner.College was never not an option. i was going and i did, It sucked a lot at first when I was at Purdue because a had my scholarship and a tiny work study but no other money. i had however spent almost ever summer night of my child hood at a drive in theater because my dad after working full time all day managed a drive in at night. When you are 17 and can quote The Godfather verbatim freshman college kids are impressed. Even more so with the Breakfast Club(might also add I had two major open heart surgeries and a trach)
    So fuck you Occupy Wall Street

  13. gram cracker says:

    The article linked below is a really good analysis of the Wall Street investment banks’ role in and responsibility for the housing bubble/financial meltdown and how difficult it is to successfully prosecute the bankers egregious duplicitous behavior. The authors also recommend regulatory and legislative provisions that would make it easier to obtain a guilty verdict. (This is the second of two articles.)

    Should Some Bankers Be Prosecuted? NOVEMBER 10, 2011
    Jeff Madrick and Frank Partnoy

    “…contrary to the claims of some analysts, the federally regulated mortgage agencies, Fannie Mae and Freddie Mac, were not central causes of the crisis. Rather, private financial firms on Wall Street and around the country unambiguously and overwhelmingly created the conditions that led to catastrophe. The risk of losses from the loans and mortgages these firms routinely bought and sold, particularly the subprime mortgages sold to low-income borrowers with poor credit, was significantly greater than regulators realized and was often hidden from investors. Wall Street bankers made personal fortunes all the while, in substantial part based on profits from selling the same subprime mortgages in repackaged securities to investors throughout the world.”

    “If serious prosecutions of fraud by Wall Street firms are never brought, the public’s suspicion about Washington’s policies toward bankers will only grow, as will cynicism about the rule of law as it is applied to the rich and powerful. Moreover, if investing institutions and individuals come to believe that bankers cannot be trusted, the underpinnings of the market will be eroded. Without solid, well-functioning markets, the economy cannot adequately and efficiently allocate capital to high-valued uses and create jobs. Lack of ethics and corrupt behavior will channel the nation’s resources to uses that are wasteful and unproductive, as they arguably have for several decades now as too many unethical practices have gone unchallenged.”

  14. gram cracker says:

    In the first of the two articles by Jeff Madrick and Frank Partnoy they analyze the subprime crisis and take issue with a book’s assertion that Fannie/Freddie were the principal causes.

    Did Fannie Cause the Disaster? OCTOBER 27, 2011
    Jeff Madrick and Frank Partnoy

    “Amid the current financial turmoil, the causes of the crisis that just preceded it—the bursting of the housing bubble—are being badly distorted. Some analysts, including the authors of the book under review, are arguing that the housing and financial crises of 2007 and 2008 were the direct result of federal guarantees of mortgages, a program first created in the 1930s, and therefore less so the result of the aggressive creation of mortgages by private business than has been widely reported.

    In particular, the authors accuse two quasi-public but profit-making companies, Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (the Federal Home Loan Mortgage Corporation), of adding risks to the mortgage markets that resulted in disaster. Much the same criticism has been made by Peter Wallison, a fellow of the American Enterprise Institute, who wrote an angry dissent to the findings of the Financial Crisis Inquiry Commission (FCIC), which was appointed by Congress to investigate the causes of the crash.1 Contrary to Wallison, the nine other members of the commission, including three others appointed by Republicans, concluded that Fannie and Freddie were not the main causes of the crisis.

    Along with many other experts, the nine members pointed to considerable evidence that, despite large losses, these government-sponsored enterprises (GSEs), as they are known, bought or guaranteed too few highly risky loans, and did so too late in the 2000s, to cause the crisis. But in their new book, Reckless Endangerment, the New York Times reporter Gretchen Morgenson and mortgage securities analyst Joshua Rosner try to revive the issue of their responsibility.”

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