Freddie, Fannie, Fascism:
Where was Congress?
Monday, September 15, 2008
By Devvy Kidd
NewsWithViews.com
"I
told all four that there were going to be some times where we don't
agree with each other. But that's OK. If this were a dictatorship, it'd
be a heck of a lot easier, just so long as I'm the dictator." Gov.
George W. Bush (R-TX), President-elect, December
18, 2000
Fascism: A philosophy or system of government that is marked by stringent
social and economic control, a strong centralized government
usually headed by a dictator, and often a policy of belligerent
nationalism; oppressive or dictatorial control.
A little over a week ago, these united States of America took another
gigantic step towards Fascism when the U.S. Department of Treasury and
the unconstitutional, privately owned "Federal" Reserve"
bailed out two more private corporations ostensibly to calm fears in
the market:
"Fannie Mae and Freddie Mac play a central role in our housing finance system
and must continue to do so in their current form as shareholder-owned
companies," Paulson said in a statement. "Their support for
the housing market is particularly important as we work through the
current housing correction."[1]
This would be accomplished in a plan Il Duce would applaud:
"First, as a liquidity backstop, the plan includes a temporary increase in the
line of credit the GSEs have with Treasury. Treasury would determine
the terms and conditions for accessing the line of credit and the amount
to be drawn," Paulson said. "Second, to ensure the GSEs have
access to sufficient capital to continue to serve their mission, the
plan includes temporary authority for Treasury to purchase equity in
either of the two GSEs if needed."[1]
Rounding out the stringent economic control is 'a strong centralized government'
awash in agencies with powers never intended when the U.S. Constitution
was ratified:
"The ousted chief executives of Fannie Mae and Freddie Mac have the potential
to exit with golden parachutes, but the government could cut the strings.
The new regulatory agency that seized control of the mortgage-funding
giants and forced out their chief executives Sunday has broad
but untested power to prohibit severance payments. Under
federal law, it could do so on a variety of grounds, including if it
found that the former executives were responsible for the companies'
financial troubles.
"We are working through the compensation issues and have nothing to say
at this time," Federal Housing Finance Agency spokeswoman Corinne
Russell said by e-mail yesterday."[2]
Compensation for CEOs who ran their corporations into the ground will be rewarded
by a massive injection from the sweat off your back despite the rhetoric:
"The severance packages could be worth as much as $14.9 million for Richard
F. Syron, the former Freddie Mac chairman and chief executive, and as
much as $9.8 million for Daniel H. Mudd, the former Fannie Mae chief
executive, said David M. Schmidt, a senior consultant for the executive
pay consultancy James F. Reda & Associates."[2]
Is this good for America? Not according to some of the finest minds in
this country who truly understand the danger of what just happened:
"In the latest example of financial market madness, the recent government
“bailout” of Freddie Mac and Fannie Mae has perversely resulted
in a sharp rise in the value of the U.S. dollar. If the markets were
functioning rationally, the transference of staggering new liabilities
to the U.S. Treasury would have been immediately seen as catastrophic
for the dollar. Instead the markets have ignored the obviously negative
long-term implications and have remained fixated my worst fears, and
increase the chances for a hyper-inflationary outcome....
"Had the government done the right thing and not guaranteed Freddie and Fannie
debt, I believe we would now be experiencing an outright financial crisis.
The dollar would be falling sharply along with real estate prices, the
government has merely delayed the crisis. The borrowed time will cost
us dearly, as the day of reckoning will now likely involve much steeper
losses for our currency.
"The Freddie and Fannie takeover does nothing to address the underlying problems
that forced the companies into bankruptcy in the first place. All of
the bad mortgage debt still exists. In fact, based on this bailout,
there will be trillions more in bad mortgages insured over the next
few years. The only thing that has changed is how the losses will be
distributed. Instead of falling solely on bond holders, who had chosen
to invest in mortgage debt, they will now be dispersed among U.S. taxpayers
and all holders of U.S. dollars, who made no such choices."[3]
The jackals feeding on the American people and the fruits of their labor
do not care and neither does Congress. On September 28, 2004, I wrote
yet another column warning Americans Congress
would do nothing; many more were to follow. On March 17, 2005, Dr. Edwin
Vieria, began writing his brilliant
analysis on the coming financial meltdown and the only real solutions.
And, still, Americans voted back in the same Congress to fix a problem
they continue to ignore. Where was Congress ten days ago to stop this
lunacy?
Doris
Matsui [D-CA] Corrine Brown [D-FL] Barney Frank [D-MA]
Mazie Hirono [D-HI) Randy Neugebauer [R-TX] Hillary Clinton [D-Ny]
Why wasn't Nancy Pelosi standing on the House floor demanding her colleagues
halt this latest bail out? Probably because her colleagues are holding
paper from those two corporations and to deflect the blame from this
House of Incompetents:
"According to the Center for Responsive Politics, 28 lawmakers had between $598,100
and $1.7 million of their own money invested in the two companies last
year. Of them, 12 members of Congress owned between $60,800 and $246,700
of stock in the two companies, which is practically worthless now that
the government has seized Fannie Mae and Freddie Mac to keep them afloat
as more of their customers in 2007, worth between $537,400 and $1.5
million. (Lawmakers disclose their finances in ranges, annually, making
it difficult to determine their assets' precise values.) Rep. Mary Bono
(R-Calif.) held bonds in the companies worth between $126,050 and $365,000,
making her investments in Freddie Mac and Fannie Mae more valuable than
those of any other member of congress.
"Four members of either the House Financial Services Committee or the Senate
Banking, Housing and Urban Affairs Committee were invested in these
companies: Rep. Carolyn McCarthy (D-N.Y.),who held $32,216 in bonds;
Sen. Mike Enzi (R-Wyo.), who held at least $2,002 in bonds; Sen. Charles
Schumer (D-N.Y.), with at least $2,002 in stocks; and Rep. Ron Klein
(D-Fla.), who held at least $1,001 in bonds.
"Republican presidential candidate John McCain, who called the federal bailout "outrageous"
(but necessary), also reported having up to $10,000 invested in the
two companies--up to $9,000 worth in bonds and up to $1,000 worth of
stocks."[4]
Just like the 151 members of Congress who directly benefit financially
from the war in Iraq; click
here. For that matter, where was Barack Hussein Obama, aka Barry
Soetoro, aka Barry Obama, aka Barack Dunham, and aka Barry Dunham or
Juan McCain? Dr. Edwin Vieira comments:
"So far, whatever remedy the Administration, McCain, or Obama has proposed
has presumed that the General Government in Washington and its pet banks
in the Federal Reserve system must keep America's present hypertrophic
financial bubble expanding indefinitely, or at least prevent it from
significantly contracting in the near future. So they advocate such
policies as "bail outs" of both private and public enterprises
(Bear Stearns, Fannie Mae, and Freddie Mac being the most prominent
so far) and pitiful "stimulus packages" of some "free"
cash for average Americans, all effected through the injection of new
"liquidity" into the markets in the form of Federal Reserve's
endless inflation of the supplies of currency and credit..
"....That candidates for the highest office in the land - not to mention the incumbent
- would be making reform of the Federal Reserve System the central issue
in the presidential campaign and the most important task to how the
Federal Reserve operates; why it endangers America's economic, political
and social stability; and what steps must be taken gradually and safely
to return this country permanently to a constitutional monetary system
based upon gold and silver, which will prevent public officials and
bankers thereafter from redistributing wealth from society to special
interest groups through manipulations of currency and credit.
"Unfortunately, that these events are not taking place proves that most top-ranking
public officials and politicians are neither patriotic nor competent."[5]
The nonsense being fed
to the American people by Obama and McCain is little better than
sawdust blowing in the wind. Obama is a Marxist who wants to strip you
of every last penny in your wallet, and McCain, in his own words, knows
nothing about the economy; see
short video. Experts who deal in the markets are finally uttering
the dreaded word:
"The end result of the global economic slowdown may be the U.S. announcing
national bankruptcy as the government cannot afford the bailouts that
it promised and the market will not bail out the government, Martin
Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday.
"We expect a depression in the United States. We expect a depression,
very possibly, also in Europe," Hennecke said on "Worldwide
Exchange."[6]
This toxic path of bailing out private corporations took a foot hold back
in 1983 with Chrysler and the camel's backside is now in the crowded
tent. It's odd, however, that Congress and the Department of Treasury
pick and choose which private corporations they wish to keep from the
frying pan. Two major industries, automobile and mortgage lending, got
the big jolt, so why didn't Congress and the FED jump to save ENRON,
one of the biggest energy concerns in America at the time? Actually,
the 7th largest corporation with a market capitalization of nearly $60
billion dollars. Didn't those ENRON employees who were sold "buy
our stock, it's solid!" by Ken Lay, matter to Congress when they
lost everything - many at retirement age left with nothing? (See links
below) Why wasn't ENRON "back stopped"?
The layoffs will continue while Congress votes to bring
in another 550,000 cheap foreign workers! The economy will continue
to stagnate because as the American people are squeezed to meet just
basics like food, clothing and a roof over their heads, the less disposable
income they have to inject into the economy. The "Ho, ho, ho kiss
under the mistletoe" retailers won't see many gifts under their
tree this year. Increasing numbers of Americans have lost faith in the
system; for tens of millions, their credit is like the Kalahari during
a bad rain year. Also, traditionally (no pun intended), the pink slips
usually roll out in December. As bankruptcies were already
up 29% in a 12-month period by August, how much will those strapped
Americans drop to give retailers that all important boost at the end
of the year?
A thousand more "economic stimulus packages" will do nothing;
it's akin the emptying the ocean with a teaspoon. This past wave of
foreclosures will birth new ones and Americans will continue to sink
into quicksand while Obama and McCain blather on with their gibberish.
Congress will continue spending when the people's purse is overdrawn
$9.6 TRILLION dollars.
For those of you who might have missed Carolyn Lochhead's September 12,
2004, column, Speeches
Ignore Impending U.S. Debt Disaster, you will see nothing has changed
this election cycle with the two front runners and their VP picks as
they ignore the warnings from four years ago.
"Laurence Kotlikoff, Economics Chairman at Boston University, who has written
abundantly on this subject, offers up a shocking response on how to
close a $51 trillion dollar fiscal gap: "To give you idea how big
the problem is, you'd have to have an immediate and permanent 78 percent
hike in the federal income tax." More than double the payroll tax,
immediately and forever, from 15.3 percent of wages to nearly 32 percent;
Raise income taxes by two thirds (roughly 78%), immediately and forever;
Cut Social Security and Medicare benefits by 45 percent, immediately
and forever;"[7]
I must repeat myself in hopes that new readers will grasp how dire the
situation is: Every penny spent to bail out these private corporations
has to be borrowed since there is no money in the treasury. How do you
write a $100 million dollar check to Freddie and Fannie when your bank
account is already overdrawn $9.6 TRILLION dollars? The hundreds of
thousands of Americans who are the beneficiaries of these bail outs,
mortgage
freezing and other madness by Congress for votes, simply no longer
care about the constitutional issues. They're desperate and want only
to be saved.
What private corporation will be next? How about I start a corporation which
sells diapers. I mean, the country can't do without them, just like
we need automobiles and mortgage lenders. Officers of the Corporation
follow my lead making stupid business decisions while paying ourselves
a king's ranson in salary and over extending ourselves, until, uh, oh,
we're in trouble. I call Helicopter Ben Bernanke and he bails out my
company by stealing from you. See what I mean? At some point the whole
thing blows just like a balloon with too much air.
Mega-billionaire, world government advocate, George Soros, is busy buying gold. Why? When
he's not busy buying Democrats, his knowledge of financial markets is
legendary; synopsis
at bottom. If you are as concerned as you should be, I recommend
you call Eric at El Dorado Gold
and talk to him. Learn why gold is the only refuge as a hedge against
the hyper inflation that can eat a country alive fast as a falling star.
How safe is your 401(k)? Oh, yes, there are supposed to be safeguards
in place. Are you sure? With all these corporations fudging their numbers
until it's too late, Americans would do well to question now. What about
pension plans? A very troubling post appeared on Le Metropole Cafe a
few days ago:
"Bill - a friend of mines girlfriend works a N.Y. trading desk for Lehman
- she tells my friend today that $8B has been evaporated from the employees
pension fund and that the company has told office staff that an announcement
will be forthcoming before the Asian markets open this Monday."[8]
I shudder to think this is true, but I suppose we'll find out soon enough.
It appears others are also concerned about pension funds:
"Now we know. The giant black hole of derivatives at JPM is about to become
the size of Jupiter. With the utter failure of Fannie and Freddie (a
culmination of what I predicted 12 years ago) Fannie and Freddie’s
massive derivatives portfolios can now be hidden from public scrutiny.
These trillions of derivatives, which in likelihood have already failed,
can now be whitewashed with the able assistance of the US taxpayer.
Also the true values of their mortgage portfolios gets deep-sixed. This
is no doubt the single largest financial failure in the history of the
world. The Fed had every reason to previously discontinue M-3 reporting.
"Can you imagine what is about to happen to the dollar supply once this catastrophe
starts getting paid for? The derivatives may now become hidden from
view, but the inflationary implications will become VERY evident. Another
ominous problem facing FNM and FRE is a collapse in their pension plans
and retirement funds. Retirees and current employees holding FNM/FRE
stock will get wiped out, however a pension fund collapse would mean
open revolt. This is another side-bailout I see coming."[9]
I encourage you to read the link one below (Warning) because the worst
is yet to come and just like the top sand in the hour glass, it will
come.
Footnotes:
1
- Feds
To 'Backstop' Fannie Mae and Freddie Mac
2
- Ousted
Fannie, Freddie CEOs Could Still See Big Paydays
3
- Last
Gasp of a Doomed Currency
4
- Congressmen
Who Were Invested
5
- USA
Tomorrow Newspaper, Issue Two, Dr. Edwin Vieira, Jr.
6
- Bailouts Will Push
US Into Depression
7
- Lochhead related column
8
- Le Metropole Cafe
(for serious investors)
9
- The
Fannie/Freddie Mess
1
- Internet book I
highly recommend ($9.95) No Foreclosures - this can help you stay
in your home while you work with lenders
Taps:
1
- WARNING by
Congressman Ron Paul at the Financial Services Hearing
on Sovereign Wealth Funds DIMP Subcommittee September 10, 2008
2 - Congress'
recent $300 billion housing bill is a theft of taxpayer money.
3 - Job
cuts announced by U.S. employers last month jumped
12 percent over a year ago
4 - Retail
Sales Unexpectedly Drop 0.3%
5 - August
foreclosures hit another record high
6 - Consumer
debt defaults looming large
7 - 50%
Of BofA's Builder Loans 'Troubled'
8 - Global
meltdown means just that; who gets to be the last domino?
9 - FDIC:
117 troubled banks
ENRON:
No oceans of money from Congress or the FED
1
- Enron - The Smokin' Cannon Of 9/11?
2 - Enron, Cheney, 9/11, Live
Hijackers, & Dead Microbiologists
3 - Enron, 9/11, Lay, Schwarzenegger
& Oregon's Water
Devvy left the Republican
Party in 1996 and has been an independent voter ever since. She isn't
left, right or in the middle; she is a constitutionalist who believes
in the supreme law of the land, not some political party. Her web site
(www.devvy.com) contains a tremendous
amount of information, solutions and a vast Reading Room.
Devvy's website: www.devvy.com
E-mail is: devvyk@earthlink.net
NOTE: In accordance with Title 17 U.S.C. section 107, any copyrighted material herein is distributed without profit or payment to those who have expressed prior interest in receiving this information for non-profit research and educational purposes only. For further information please refer to: http://www.law.cornell.edu/uscode/17/107.shtml
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