FNC/FBN Investigation: SAVING Our ECONOMY - What'$ Next?

This Special Report by Fox News Channel & Fox Business News and hosted by David Asman was aired last October 4 & 5, 2008. For those who missed this enlightening report, I uploaded the 6-part videos here. This report was an in-depth investigation into how we got into this financial and economic mess, the bailout plan of Washington, and how this financial crisis impacts the next president's agenda.


SAVING OUR ECONOMY - What'$ Next? - VIDEO PART 1

NOTE: YouTube took down this video (of course you know why)!!

"The DANGER we face today is on par with 'The Great Depression' which lasted for a decade and spawned the New Deal - the greatest expansion of the government in history. And part of that legacy is at the root of the current crisis... the Federal Mortgage Association, better known as FANNIE MAE." - FNC/FBN

- Fannie Mae was created in 1938 by Franklin Roosevelt (Dem). The idea was to help out people with their mortgages and thereby increase home ownership.

- In 1968, in the middle of another huge federal government expansion - a bunch of social programs called 'The Great Society' - Lyndon Johnson (Dem) privatized Fannie Mae (at least on paper only). Actually, Fannie Mae was still a part of the government ready to bail it out.

- In 1970, the Federal Home Loan Association, better known as Freddie Mac, was created to provide competition to Fannie Mae.

- "When we have these organizations that are backed by the government, they will take RISKS that no other organizations can take." - Peter Wallison, former general counsel of the Treasury Department

- The risk kept rising over the years, in part, because the government wanted it that way. In particular, the Community Reinvestment Act (CRA). In my opinion, this was the FUSE to the current FINANCIAL CRISIS.

- The CRA was passed in 1977 during Jimmy Carter's (Dem) first year in office. The law required financial institutions to GIVE CREDIT to LOW INCOME families. This empowered community organizations to bully banks. One such organization was ACORN.

- The Associations Of Community Organizers for Reform Now (ACORN) came up with a new tactic challenging a bank in Illinois claiming they did not make loans that ACORN felt were required under the CRA. The bank complained that such loan would be financially irresponsible.

- A young community organizer named BARACK OBAMA worked closely with the ACORN activists behind the new strategy. The strategy worked. Obama represented ACORN and prevailed in court (Buycks-Roberson vs. Citibank Fed. Sav. Bank, 1994) and soon, CREDIT STANDARDS were being LOWERED across the country.

............... The FUSE of the financial crisis was LIT!!!



SAVING OUR ECONOMY - What'$ Next? - VIDEO PART 2

NOTE: YouTube took down this video (of course you know why)!!

"How can a tiny fraction of mortgages going bad could cause our entire economy to collapse? A professor that teaches credit and derivatives at New York University explains the financial meltdown which involved the repackaging of mortgages into Mortgage Backed Securities; which are then repackaged again into Collateralized Mortgage Obligations; and further repackaged into Tranches." - FNC/FBN

This 'train wreck' is so predictable. Because WE'VE BEEN HERE BEFORE. In this video, you'll learn how many times these mortgage securitization schemes failed before between the Civil War and World War 2.



SAVING OUR ECONOMY - What'$ Next? - VIDEO PART 3

NOTE: YouTube took down this video (of course you know why)!!

"How can our most important financial institutions hold so much bad debt without anybody doing about it. The truth is, a lot of people saw the problem. And others acted on what they said... we wouldn't be here right now." - FNC/FBN

"When house prices started to go up 10, 15, 20% a year... you know that that just can't last." Wall Street Journal in 2002

"There's a real question in my mind... whether Congress controlled Fannie Mae or Fannie Mae controlled Congress." Peter Wallison



SAVING OUR ECONOMY - What'$ Next? - VIDEO PART 4

NOTE: YouTube took down this video (of course you know why)!!

"For years Congress failed to pass tougher oversight for Freddie Mac and Fannie Mae. That continuing lack of control allowed those two GSEs to keep pumping risky mortgage securities into our nation's financial system. The one thing the politicians couldn't control were the unrelenting forces of the market place." - FNC/FBN

"In the years 2005 to 2007, they (Freddie and Fannie) put about a TRILLION dollars in sub prime and other kinds of bad mortgages in their balance sheets in order, in my view, to prove to Congress that they still had value." Peter Wallison

Freddie, Fannie, Countrywide, Bear Stearns, Indymac, Merrill Lynch, Lehman Brothers, AIG went belly up!

"The scale of help is such that I don't think It can come from the private sector." Warren Buffet


SAVING OUR ECONOMY - What'$ Next? - VIDEO PART 5

NOTE: YouTube took down this video (of course you know why)!!

"How the biggest financial story in a long time turned into a politcal drama." - FNC/FBN

"And it may make you angry... it makes me angry. When you ask about the taxpayers being on a hook, guess what... they're already on the hook." Henry Paulson, Secretary of the Treasury about the bailout.

"The house Republicans are not going to go along (the initial bailout plan). We're not going to give $20M to a left wing group, we're not going to agree to any extra spending, and we're not going to agree to do this without very strict controls." John Boehner (R- Ohio), September 25th meeting at the White House

"I'm with Boehner." John McCain (R-Arizona), September 25th meeting at the White House

Nothing in Wahington stays simple. Secretary Paulson's original (bailout) plan was about 3 pages long. The House legislation was 110 pages. The Senate legislation was over 450 pages (now called Economic Stabilization Act of 2008)! Why this long? SWEETENERS (more taxpayers' money)!!


SAVING OUR ECONOMY - What'$ Next? - VIDEO PART 6

NOTE: YouTube took down this video (of course you know why)!!

"Many politicians and financial experts are warning - we'll face another GREAT DEPRESSION if we're not smart. But historians and economists are also learning new lessons about the Depression and how the government may have made things a lot worse. Can we learn from those mistakes?" - FNC/FBN

"We really could go through Depression if we repeated the mis-steps of the 1930s. When you RAISE TAXES, you make the crash last longer. People shut down their business rather than pay those taxes. What will help us recover? It won't be the government. You can't legislate recovery. It will be the market." Amity Shlaes, author 'The Forgotten Man'

At The First Debate (October 1, 2008):

QUESTION: "As a result of the bailout plan and the billions it is going to cost, as President, what are you going to have to give up?

McCAIN: "I will impose one-year SPENDING FREEZE on every agency in the Federal government, excepting only national defense, the care of our veterans, and a few critical priorities."

OBAMA: Obama recited a laundry list of substantial new spending programs and did not specify what parts of his big plan he will cut back, if any.

NOW YOU KNOW WHO CAUSED THIS CRISIS (BY DESIGN?) YET MILLIONS WILL STILL VOTE FOR THEM... Only In America!!

Bill O'Reilly Lost His Cool On Barney Frank - You Should Too!

Why? Because as soon as Barney Frank (Democrat - Massachusetts), chairman of the Financial Services Committee in Congress, opened his mouth, he uttered a litany of apparently deceitful statements.

#1: 'I did what the Republicans hadn't been able to in 12 years - get through the committee a very tough regulatory bill.' (because together with his party, he blocked the Republican tighter regulatory efforts; see videos below for proof)

#2: 'I've always felt two things about Fannie Mae and Freddie Mac... that they have important role to play, but that the regulation should be improved.' (videos below tell otherwise about the latter)

#3: 'From 1995 to 2006, when the Republicans controlled Congress and we were in the minority, we could not get that done.' (they couldn't because they looked the other way; see video below for proof)



That's Barney Frank - the pride and joy of Massachusetts and given a lot of credit by his party for helping 'PUT TOGETHER' the $700+ Billion bailout plan!!

God Save America!!


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Excerpted from... http://www.aei.org/publications/pubID.22514/pub_detail.asp
'Regulating Fannie Mae and Freddie Mac'
Now It Gets Serious
By: Peter J. Wallison
Friday, May 13, 2005

In the fall of 2004, OFHEO (Office of Federal Housing Enterprise Oversight) reported that Fannie Mae had also manipulated its accounting, and to a degree far more significant than what Freddie had done. At a dramatic hearing in Richard Baker's (Republican - Louisiana) subcommittee, Fannie's chair, Franklin Raines, stood by the company's accounting, claiming that Fannie was being victimized by an overzealous regulator and its accounting position would eventually be vindicated by the Securities and Exchange Commission (SEC), which had been asked to review the disputed accounting. The tenor of things in Congress was still so supportive of the GSEs (Government Sponsored Enterprise - Freddie Mac & Fannie Mae) that Armando Falcon, the director of OFHEO, received a far more hostile reception than Raines got in Baker's subcommittee. Nevertheless, most accounting specialists viewed Raines's position as unsupportable, and many questioned his judgment both in making a frontal assault on his regulator and in making statements under oath that might later put him in jeopardy. Weeks later, the SEC's chief accountant dismissed Raines's contentions, famously holding up a piece of paper and telling Raines to his face that Fannie's position on the relevant accounting was not even 'on the page' of allowable interpretations. Shortly thereafter, Fannie announced that Raines had resigned as chairman and CEO. Both the Justice Department and the SEC have begun investigations of Fannie's accounting, and the company has dismissed its former auditors and retained an independent counsel to conduct an investigation of its own accounting.

Now, after these events as well as the results of the 2004 election, Fannie and Freddie would be delighted with the Senate committee bill, and as the new Congress began in January 2005, their managements both made statements that they were prepared to accept what they (Dems) opposed in 2004--even receivership. But it was too late. The world had moved on. Today, the controversial issue before Congress is no longer receivership, but something far more significant.



VOTE WISELY ON NOVEMBER - YOUR CHILDREN'S FUTURE IS AT STAKE!!