Financial Bailouts Spells end for America

Listening to all the bullsh*t that is coming out of WDC (Washington, DC) these past week about how we have to bail out the Wall Street and Political idiots that got us into this financial mess just made me understand that America truly can not be fixed.

I have decided that regardless of who gets into the White House in the fall, I will take my citizenship elsewhere since I can not longer support how this country is going and how the politicos in charge of the US Government are screwing things up.

This current financial mess got started by 3 very stupid governmental interventions into the free market mechanisms of our financial infrastructures:

1. The revocation of the Glass-Steagall Act in 1999 by the Clinton Administration
2. Implementation of the Sarbanes-Oxely requirements particuarly the FASB rule 157: "mark to market"
3. The change in CRA loan approval requirements by the Clinton Administration and implemented by Franklin Raines of the now nationalized Fannie-Mae.

If none of these three things mean anything to you then you are ignorant of what is happening today and you need to do your homework before taking part in any discussion of current events. Back tracking through the 3 event above will lead you to the basis for all the financial woes we are experiencing today.

I will help you with the probably the toughest link: #3
When the CRA (community reinvestment act) requirements for community banks to show that they are not red-lining (using a red pen to disapprove loans) lower income, minority applicants, banks were told that they had to lower their lending standards to cover those that could not qualify for a loan otherwise. This began during the Clinton Administration and continued into the Bush Administration under the watchful eye of Franklin Raines, the head of Fannie-Mae from 1998-2004, and who walked away with over $115,000/month pension for life plus full medical and dental benefits. Yes, that's 115K per month, not year!

Now the next step is to follow Franklin onto the Obama Campaign since BHO (Barack Hussein Obama) received over $400,000 from Fannie&Freddie in the few years he was a sitting senator, and not running for the Presidency. Seems like BHO has some vested interest in keeping Fannie&Freddie from being more regulated, eh?

The real crime is that once the CRA rules were lowered, and the loans to those people who were not qualified began to come in fast and furious during the Alan Greenspan 1% interest rate dips (this is where the real sub-prime mortgage crisis got started), it was Wall Street that found a way to make money on them. Simply take the "toxic paper" (real interesting name) and bundle them with some decent loans and call them CDO (collateralized debt obligations) and to make them AAA rated, develop another derivative instrument called a CDS (credit default swap). Since pension plans and municipalities can't invest in anything but AAA, then the CDS where the real work of genius by Wall Street MBAs. Simply, a CDS is a private bet (that everyone in the Bush administration didn't want to regulate) between the buyer (the one buying the CDO) and the seller (those insuring against the default of the CDO) that for the buyer paying an annual premium, the seller would guarantee against CDO default. This is were AIG, Bear Sterns, and Lehman Brothers come in. They were the biggest sellers of these CDS which now according to the International Banking Organization total over 600 Trillion!

When the US real estate market began to fail due to rising interest rates and all the sub-prime mortgages now having to reset, the buyers of the CDOs came to the sellers of the CDS and demanded their money for the default of the AAA rating on these now toxic CDOs. Well, there wasn't enough money on the planet to cover these insurance bets and then whole process (the house of cards) can tumbling down.

I will let you work out the rest of the linkages, but they are not the hard. They have to do with the ones that are writing the bail out on Capital Hill: Senator Dodd and Congressman B. Franks. Look into their contributions from both Fannie and Freddie to get an idea why they want to bail out these financial organizations.

Predictions: this bail out will NOT work as the total amount of the toxic paper (interesting epitaph) is not known and what the bail out bill does to setup the process of implementation is just silly. The Treasury Dept is going to hire "competent money managers" to oversea the purchase of these assets, and these managers are the same ones that got us into this mess: they are from Wall Street!!! Can anyone spell CRAZY? Then the US Government is going to conduct a reverse auction where they will be the only party and if no one else bids, then the taxpayer becomes the owner of these assets.

Secondly, the bill does not cancel the golden parachutes of the Wall Street CEO's that are already written, only future contracts! This means that all those that aren't out now are the suckers ;-) CEOs like Franklin Raines is safe with his 1.5 million per year pension and those from the now de funk Bear Sterns, Fannie, Freddie, Lehman Brothers, Merrill, etc are safe. What a shell game, eh?

This is the end of the USA, folks. The terrorists couldn't take us down with their military activities, but we will be taken to the wood shed by our own financial and political types whose "need for greed and power" will put the USA into the category of "has-been". The end of mankind will be written without the USA in attendance.

American has finally stepped on to the one land mine that could take it out, and the idiots in Washington are going to be fiddling while America burns to the cheers of the radical fascists around the world. Sad, so sad.