FBI investigating companies at heart of meltdown

Great post, those who deny the insight of your post are sheep. Pure and simple, dont ever let it bring you down.

Criminal greed, or is that "the free market"? I can never tell the two apart.

I bet the paper shredders and file scrub applications are working overtime.

FBI had better move quickly.

JohnB,
Thank you for finally sticking up for the little guy. I have read so many posts blaming the common man/woman....many of these people relied on the information given them about a mortgage...this whole thing is greed....nothing more...by a group of people who took advantage of an opportunity when they saw one. FBI investigating? Now? What a joke...a little too late fellas.

Actually, the sheep are those who live paycheck to paycheck. Those who get their furniture from rent-a-center, and have nice $40 dinners on $500-limit credit cards and are making payments on a car whose sticker price is a year's pay.

How not to be one? Eat at home. I haven't been to a restaraunt in months. Buy used cars, preferably with cash. I have two, one is paid for, the other is costing me $160 a month. My credit card balance is $71.

Not being a bum has nothing to do with how much money you make and everything to do with how you spend that money. I lived on $700-750 a month between graduating college and joining the army. And my rent was $415. No car, no cable, basic phone...$200 a month will feed one mouth, just not in style.

And anyone who takes whatever the slick salesman in the shiny suit tells him on faith isn't just a sheep, he's an idiot, to boot. I'm not trying to take wall street off the hook here, I hope the top three guys in all of those financial companies go to jail and lose every red cent. What I am saying is that it's retarded to expect fair play in any business deal you get into. In the end, there's only one person responsible for your financial well-being: YOU!

Isn't it against the law to falsify 'loan' applications?

I hear about the fudging of the income numbers of these home buyers, but the owners sign on the dotted line all these forms and don't realize that the information is wrong.

If this were just one or two applicants issues, that is one thing. But if you see whole lending businesses with these fudged applications on the books, that is another matter entirely.

dc,

I suspect we will find a pattern of fudged figures, if the data is still intact.

double post. sorry

Oh, you mean like Fannie Mae and Freddie Mac, which have been protected by Democrats for years? Stop being such a tool. Not everything is about Republicans.

Yes Kyle, good point. I prefer Obama over Mc Cain, but it is interesting to note that some of Obama's economic advisers used to work for Fannie. This could expose shady dealings by members of both parties campaigns, whether Republican or Democrat. It's about time these people were investigated. It looks like congress is going to rush into a corporate bailout regardless of the FBI investigation, so the criminals in question should have no problem paying their lawyers.

Time's running out to get a pardon from Bush. The wheels of justice don't usually turn that quickly. At the risk of sounding overly cynical, I'll be surprised if any charges are ever filed. Without regulations, there are no rules to break. Besides, how do you prosecute Treasury Secretary Paulson, previously Chairman and CEO of Goldman Sachs?

Fannie Mae and Freddie Mac are companies created with contradictory intentions -- on the one hand, they were, after being deregulated, supposed to be a solvent private company; on the other, they had a "public" mission to provide affordable loans and increase homeownership.

Besides the major issue that they were both guaranteed by the government, and thus were looked at as unsinkable, is that they became tools for political agendas. The Democrats' agenda, especially under Clinton's direction, was greater homeownership of lower-income people, and their mechanism for doing that was Fannie Mae and Freddie Mac buying up loans and re-selling them as packaged securities, even if the loans were not financially sound.

It's a great intention, but the result was that Democrats in Congress protected Fannie Mae and Freddie Mac from stricter regulation or investigation, and they became bastions of corruption. It's a classic example of why government should not be involved so strongly in the economy.

The irony of this entire thing is, despite Republican attempts to more strictly control Fannie Mae and Freddie Mac, they are now being pinned with the current crisis. Democrats are coming away scott-free, even though their protection in large part is what allowed it to happen.

The Washington Post wrote a good in-depth article on how Fannie Mae and Freddie Mac were protected. It's well worth reading.

but it is interesting to note that some of Obama's economic advisers used to work for Fannie. This could expose shady dealings by members of both parties campaigns, whether Republican or Democrat.

Actually, Obama has received the second-most campaign donations from Fannie Mae and Freddie Mac, and his search for a VP candidate was led by James Johnson, former Vice Chairman of Fannie Mae from 1991-1998 when Fannie Mae improperly deferred $200 million worth of expenses, which helped give Johnson a large bonus -- $21 million -- even though his bonus was reported as $6-7 million. Please note that this does not mean Johnson himself acted improperly, but he certainly benefited from Fannie Mae's corruption.

I don't think this damns Obama in any way, other than to say Fannie Mae and Freddie Mac are a large contributor to his campaign and have deep influence with it.

And my point isn't even that Democrats are somehow worse than Republicans. Instead, my point is that both are heavily influenced by special interest, and it isn't any surprise when government is so large. This is what happens when government is given the power to interject itself in the economy so strongly -- corruption happens.

Try this one out...

http://www.msnbc.msn.com/id/21134540/vp/26861127#26861127

Don't spin me,

Is there a seed on this? If not seed it.

@Ire
Here is just one of many backing up DontSpin's assertions:
This from the San Francisco Chronicle: The lobbying firm founded and co-owned by the campaign manager for John McCain received payments from Freddie Mac in recent months, despite assertions earlier this week that the company's work for the mortgage giant had ended three years ago.

I think the bottom line here is that both campaigns are up to their eyelids in lobbyists, in spite of both campaigns swearing they don't have a single lobbyist in their ranks...while "blowing the whistle" on the other campaign's lobbyists. A saying about stones and glass houses comes to mind...

Thanks Ken

The problem is bad governance.

That is what a soundly hit nail looks like.

Good one, u.g.

Everybody wants a totally free market....wellll....you cannot have a totally free market...as I have said time and time again....people screw things up...there are not enough people with a moral compass out there anymore...too many people put their faith in bling...not enough substance!

pmax, I was thinking the same thing. What, did they have a 5 year hangover from Enron or something?

I think they did jdunn - superman's gonna make it all better apparently

Moral compass is a fantasy - the jungle situation allows for the survival of the fitest - SIMPLE ! wrap it up as democracy, republicans, war on terror, wall street, it is what it is - the people that suffer remains the tax payers.

PMAX 9.4 Moral compass is a fantasy - the jungle situation allows for the survival of the fitest - SIMPLE

Funny, I thought human beings were above animals in the jungle...moral compass for many of us is an INGRAINED reality.

If the animal in the actual jungle could speak, each species will be saying they were above the other too. That's my point --- some people think they are beneath or above certain things --- the sooner we realise we are all equal, then things can only start to look up. Till then some will be held back, consciously or unconsciously.

I vote for #2 - I called my senator and congressman and told them as much.

I agree, the 700 billion dollar bailout is a lazy copout. It's gonna take a lot of hard work and effort to turn this thing around. Giving them a freebie will just encourage them to continue this irresponsible behavior. If they think they can keep writing home loans to people who can't afford them, and the government will just bail them out, there is no end in sight to this crisis.

Dont SPin Me Bro!

You make a very big assumption that OBAMA is not part of the problem!

After 32 years of voting Democrat and Republican I can tell you there is not ONE bit of difference between the parties.

I can tell you that McCain has to get help to access his zipper and with his very limited clock cycles left on his clock and the track record of smash ups he has there is no hope for this problem to be solved in the white house.

FOCUS on your representatives and write to them every day FAX them call THEM.

Good luck!

2. Don't bail out an economy based on 2 busted bubbles (housing/credit) and let Obama implement:

First of all, the credit bubble was caused by the housing bubble. The housing bubble was caused by the idiotic idea to make sure that every single American is able to own a house, regardless of his ability to actually pay for the house. And we all know where that retarded program started, not that the fool that currently sits in the Oval Office didn't try to take credit for the debacle before the other shoe fell... But all of this "deregulation" that was pushed through the government was intended to serve this ideal of every single American being the proud new owner of a home he couldn't afford. Anyone who is shocked that Wall Street took advantage of such idiotic policy making to enrich itself is a sheep!

2a. Massive public works infrastructure rebuilding project to create new jobs and reduce unemployment.

I could agree with this. We may actually need a few "hoover dam" type projects to put people to work. I do worry that for every dollar spent on the public good under such a program, fifteen dollars will line the pockets of congressional campaign fund donors.

2b. Implement a home owners mortgage restructuring program to stop the home devaluation.

Sounds good, people's primary residences are the only real estate that a judge can't currently modify the mortgage on. What I don't understand is how this has anything to do with who we choose as our next president, as what's needed is legislative action. And I really don't see Congress fixing this one. Banks give too much money to their campaigns.

2c. Implement incentives to green companies for a technology revolution of more new job growth.

I really don't see this one. The best incentive for technological innovation is the promise of profit. The government would get a better return on its investment by making a massive donation to greenpeace than by propping up economically infeasible green technology companies. Giving them a bunch of taxpayer money will keep them out of bankruptcy, but it won't make consumers more likely to choose them over a cheaper, less green solution. For green to work, it has to make economic sense. Those green technologies and business practices that do meet this test don't need government cheese, and those that don't won't be saved by it.

2d. Implement 100% affordable health-care for everyone to stop health related financial bankruptcies.

The number one thing we can do is limit lawsuit against doctors to something reasonable. Government employees doing brain surgery scares me. I'm all about changing the way medical debt is handled in the courts and on your credit report, but I don't want a national health care system a la Europe. Seeing a classmate of mine get put on a 6 month waiting list for having his wisdom teeth removed while being fed tylenol3 pretty much cured me of that, not to mention that everything the government puts its mitts on ends up costing three times as much as it should ($400 toilet seat, anyone?), and that's going straight to the taxpayers. Oh, and did I mention that anyone in a country with national health care systems who can afford it flies to the United States to pay for his health care, in spite of already having paid taxes for the "free" care that he could get at home? My health is too important to me to allow the guy at the DMV customer service counter to have any say in the matter.

2e. Responsibly stop the war in Iraq, finish in Afghanistan and shore up full veterans benefits.

The war in Iraq is a non-issue. The Iraqi government is dictating when we have to be out. We're just a couple months from not being able to detain terrorists in Iraq unless we have a warrant from an Iraqi judge and evidence to put them in Iraqi jails on criminal charges. By next summer, we'll have to be out of the cities, and 18 months later, we're all gone. Neither Obama nor McCain has any say in the matter. What does "finish in Afghanistan" even mean? And what do you mean by "shore up full veterans benefits"? There's absolutely no substance to your talking points here, I can't even respond to them.

2f. Save and once and for all lock-down social security for future generations.

Good luck with this one. The current looting spree began under Bush the Elder...but every single president since him has continued to loot the account...including one slick willie, who pretended to balance the budget by covering his shortfalls with SSA money. Again, this one needs legislative action, not executive action, and I don't see it happening.

Overall, you seem to think that all of the problems can be solved by the president. All he gets to do is sign or veto legislation. The real work is in Congress, and they're so crooked that I have little hope that either candidate can make any headway. The main thing the next president can do is dime them out when they continue to put their own reelection funds before the American taxpayer.

Alan Greenspan is the father of the ARM.

That Clinton appointee ran Fannie Mae was worth 90 million in compensation.

I don't think so, they aren't too happy about that section at all.

Calling it UnAmerican.

Many members of congress don't like it, but they're being pressured to push this through asap. Bernanke gave a pathetic excuse for why some companies won't participate in the program if there are restrictions on CEO pay and oversight. I think Paulson is alright, but Bernanke is not to be trusted under any circumstance. He was a lobbyist for China for god's sake!

Bush & Co. never fail to amaze me. Just when I thought they couldn't get more outrageous, they do something like this.

Paulsons proposal, just 3 pages long, which included the ridiculous: Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency....is another stunning display of hubris.

Give me $700 billion dollars, to spend as I see fit, without oversight or review. Just give me the blank check and go away. Really? Seriously?

tells me they know exactly what they are doing and we cannot know about it...i think some people would be going to prison if we knew.

i heard the FBI is looking at AIG, Fannie freddie etc...also a talking head from was on CNN talking about fannie cooking the books at the taxpayers being ripped off for years...and alot in washington are tied into it also.

congress has some corrupt ties to fannie it sounds like and the FBI is coming after them....wonder who ordered up the FBI?

Well, it is something, isn't it? I really don't like the idea that Bush is saying do the bailout NOW, this WEEK.

Excuse me, but the last time he pulled that c$ap, we got stuck with an illegal war.

If this isn't the October surprise, I really don't look forward to October.

Check out my column's latest seed, a CNBC story from Jim 'Mad Money' Cramer, who says it IS the right solution, tries to dispel five "lies" about Paulson's plan - and warns without quick pasage, he predicts "a sequel to the Great Depression."

God, I hope they get this right, and/or that his prediction is off-base.

I will, thanks Barney.

But just in case I already emailed all my senators and my rep. asking them to say NO.

They can't just fall down, roll over and give Bush and the FEDS everything without any consequence.

I don't like that he waited for this at the last minute. I really don't. I have my doubts it will help in the long run.

Realize, I have been unemployed for two years now. It is not pretty out here in the real world and the fat cats on Wall Street are in for a rude awakening after their $5,000 bottles of wine, fancy cars and super models with ritzy homes.

I don't want to pay for them to keep their lifestyle, let them get real like the rest of us.

Somehow, without stem cells, Congress has grown a spine. It's a miracle!

WOW, He will be famous very soon. wow.

Yeah, he says it all.

lol yeah he hit the nail on the head

My thoughts exactly! They should take his advice - sounds like the best plan yet! See pubs and dems can agree on something! LOL

Oh boy, its time to investigate Paulson, Bernanke, Dodd, Franks, Bush, McCain, Rumsfeld, Biden, Bill and Hillary Clinton and on down the line. We don't need the crooks investigating themselves, that doesn't work, we should know this by now!

I agree, except for the Paulson bit. You also left out a bunch of people. But Paulson is brilliant, and hasn't been in the job long enough to have caused this mess.

It just goes to show you, once government touches it, it is is tainted and doomed for failure.

And we want the government in charge of health care, "to save people money????"

They say they can buy all the bad debt and repackage and sell it and make money from it and benefit the American People from the $700 Billion loan. They act like the country will be going gang busters financially in 6 months or a year from now when in reality its going to be 5 years at best.

I have no illusions about the government turning a profit on buying $700 billion in risky debt. And Nobody's saying the government will be able to unload the garbage six months down the road. I haven't heard anything less than three years tossed around. Regardless, it's not a $700 billion gift, that's what people refuse to understand. In the end, it won't cost the taxpayers that full amount, I'd think the government is able, eventually, to get at least 80% of that back when they put the stuff back on the open market later. Remember, these debts were designed to make money. In a dire situation like this, they of course have strong potential to lose money, but it's not like that $700B is worth zero. It has some value, and the value will recover when the market does. I say $700B probably costs the taxpayer $100B in the end. A small price to pay to avoid going back to the 30s!

Lets see, lets take the bad debt and make it look good on paper and then sell it to some sucker for a profit? Gee, what good ethics you have Mr. Paulson. Sounds just like a crook doesn't it?

This isn't replacing the dollars lost in already-foreclosed mortgages, this is buying up risky ones that haven't failed (yet). It's risky debt, not bad debt. Big difference. In theory, the higher interest rate makes up for the higher incidence of default. This shifts the risk (and reward) to the taxpayers, not what I'd like to happen, but it's better than doing nothing. If we do nothing, then the taxpayers are at risk of "the second great depression" without possibility of reward.

I finally just had to place you on the ignore list Western, you post this same comment all over, again and again. It's tiresome.