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FBI Investigating Rich White People, and Michael Sells a House September 23, 2008

Posted by Michael in Economics, News, Politics.
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Martha Stewart is out of jail, so I guess they have an empty cell.  The FBI is investigating corporate misdeeds, and they are hot on the trail of greedy Rich White People to blame for our problems.

Rest assured, this guy pictured below is not going to go to jail.  He’s not a corporate executive.  He’s not even white.

Public Enemy No. 1

WASHINGTON – The FBI is investigating four major U.S. financial institutions whose collapse helped trigger a $700 billion bailout plan by the Bush administration, The Associated Press has learned.

Two law enforcement officials said Tuesday the FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation.

The inquiries will focus on the financial institutions and the individuals that ran them, the senior law enforcement official said.

The law enforcement officials spoke on condition of anonymity because the investigations are ongoing and are in the very early stages.

Officials said the new inquiries bring to 26 the number of corporate lenders under investigation over the past year.

FBI investigating companies at heart of meltdown – Yahoo! News.

Oh sure, let’s blame those Rich White People.

Meanwhile, the real criminals are skating.  By “real criminals” I mean the politicians who supported the Community Reinvestment Act — long after it was known that the CRA was a scam, based on fraudulent assertions that “underserved communities” had been victimized by “redlining” and were in dire need of “affordable housing.”   So we saw the same old thing — Federal handouts easily become entrenched and addictive, even after it is clear that they have no rational purpose (don’t get me started on dairy subsidies).

Democrats, like the highly influential Charles Rangel, Chairman of the Ways and Means Committee, blocked reforms that were urged by many Republicans, including John McCain.  To no avail — that “affordable housing” was real important for “underserved communities.”  Banks were literally forced to issue imprudent loans that defied all previous standards of creditworthiness, and  avid sales reps cashed in commissions by selling ARMs and up-front teaser rates to the ignorant.

Previously sober institutions like Freddie Mac and Fannie Mae, insulated from risk by the implied protection of Uncle Sam, were more than happy to package these mortgages and securitize them to gullible investors who believed the housing market could only go up.  Never mind the inexorable demographics of an aging Baby Boom population.

Thus was the corruption born that led to our current crisis.

Guess who is going to pay for this?

Me.

And people like me.  Rich White People.  I’m one of those five percent of the U.S. wage earners that pay sixty percent of the federal income taxes.

Plus, just today I flipped my Ohio house to a relocation company for it’s appraised value in a dead market, which means I took a loss.  A big loss.

Rangel, of course, thinks that he is only guilty of becoming a political target due to some inadvertent errors:

Rangel claims that he is being villainized by Republicans as part of their effort to win back the House, as well as headline-seeking reporters, and said that he has done nothing wrong. Rangel has been hit by a series of press reports detailing alleged ethics violations, including his failure to pay taxes on $75,000 in income from a vacation home in the Dominican Republic, his use of his congressional office to raise funds for the Rangel Center in New York City, and his control of four rent-stabilized apartments in a Harlem high-rise that he lives in. The House ethics committee is expected to vote next week to begin a formal investigation of the allegations, as requested by Rangel.

“The campaign season has begun, and to no great surprise, I’m now a Republican talking point. But I assure you, I’ve brought no dishonor to my family, the Congress, my constituents, or my country,” Rangel said in his letter.

Politico.

Fuck you, Charles Rangel.

Comments»

1. eddiebear - September 24, 2008

And Ace just posted the WAPO poll, which shows the Dems gaining over this.

I won’t even channel Kos and claim it’s a conspiracy, but the Dems sure have been lucky with macro events helping them since Katrina made landfall. And in most cases, their side caused or exacerbated the problems, yet the GOP takes the hit.

2. eddiebear - September 24, 2008

And what pisses me off is that I worked my ass off to damn near pay off my small house and nondescript car in a pedestrian area of STL, rather than go asshole deep in debt to impress people, since I was raised to believe that financial prudence was the right thing to do. And yet I too am going to foot the bill for this mess, despite the fact I did nothing wrong. And the people who created this mess will benefit from it.

3. xbradtc - September 24, 2008

Michael,

Given the way you’ve been pounded in the ass thanks to Charlie and the rest of the Fannie Freddie Fan Club, maybe you should give Clay Aiken a call.

4. kevlarchick - September 24, 2008

Nice summation, Michael.

It is an infuriating cluster fuck, to be sure. The CRA was Clinton’s idea, n’est-ce pas?

5. Mrs Peel - September 24, 2008

Nope, Carter. But Clinton made it worse – before him, fulfilling the requirements was more wink-wink nudge-nudge and less “how many loans have you given to people who can’t afford them today?” (Apparently, banks did use to give loans disproportionately to honkies even when you correct for income and creditworthiness. In which case, yeah, that’s wrong. That doesn’t mean we turn around and give loans to non-creditworthy people, ok? Argh.)

6. Mrs Peel - September 24, 2008

And just for a perspective from the other side of the normal distribution, I can’t imagine one person making enough money to support an entire family by himself. Those kinds of numbers boggle my mind. I mean, sure, I can support myself, but I don’t have any expensive habits (books? high speed internet?), and I don’t eat much. (Typically, a meal that feeds one normal person feeds two or three Peels. I eat a lot of leftovers.) I wish I had more money. I would make a big pile, and sleep on top of it with many beautiful ladies a stuffed animal of some sort, I guess.

*can’t wait for next raise*

7. kevlarchick - September 24, 2008

Enjoy it Peel.

8. Master Kan - September 24, 2008

When you snatch the pebble from my hand, then it will be time for you to bean Charles Rangel with it.

Of course, you’ll have to remove his head from his ass first.

On second thought, fuck it. Just shoot him in the face with a bazooka.

9. eddiebear - September 24, 2008

^naw, I don’t believe we endorse violence here. Unless it’s a zombie.

10. Cathy - September 24, 2008

What Michael Said. Thanks, honey!

Yesterday was tough for us.

11. Michael - September 24, 2008

Apparently, banks did use to give loans disproportionately to honkies even when you correct for income and creditworthiness.

I’m not sure. I recently read somewhere (I don’t recall where) that this was the conclusion of an FRB study which has since been debunked because it was based on bad data. In other words, the whole redlining accusation against the banking industry was a myth.

12. PattyAnn - September 24, 2008

I’m sorry for your loss, Michael and Cathy. On the bright side? You’ve moved to the GREATEST State and one of the GREATEST cities, are buying a suitable castle and still have the future pleasure of meeting the rest of the Texan hangers-on. (okay, that last part about the pleasure is a little iffy, but the rest is factual.)

13. skinbad - September 24, 2008

Sucks to take it in the shorts. We lucked out on our only house selling experience. It apprecitated about 20% in a year and sold the first weekend we put it up. But, does it kind of equal out? If you sell low, you buy low; if you sell high, you buy high. I guess if the market is very different in the two locations you are involved in, that wouldn’t be true.

14. Michael - September 24, 2008

Yeah, that’s the problem Skinny — the Texas market hasn’t really slumped like the rest of the country.

15. S. Weasel - September 24, 2008

Well the Rhode Island market is a smoking crater. I got a call from my real estate agent this morning: the guy that looked at my house two days ago loved it so much that he MIGHT just give me ten thousand less than the absolute minimum I told her I would take. First offer I’ve had in six months on the market.

I’ve spent most of my savings fixing it up (more than twice what I agreed to, on account of problems kept turning up) and now those thieves in Congress have sucked all the equity out in one swell foop.

I am BESIDE MYSELF with angry, especially when I see those jackasses up on their hind legs waving their fingers at Wall Street and clucking their tongues.

16. S. Weasel - September 24, 2008

And no…I didn’t get here by being irresponsible. I’ve been in that house twenty years and I’m living well within my means.

Could I wait? Yes. I might have to. But the plan is to move to a new country, start a new life and a new career. And when you’re pushing fifty, time is of the essence.

Incandescent. You could light cigarettes off me today.

17. daveintexas - September 24, 2008

I can’t imagine one person making enough money to support an entire family by himself

me either. I shall present this evidence to the Missus

18. skinbad - September 24, 2008

especially when I see those jackasses up on their hind legs waving their fingers at Wall Street and clucking their tongues.

Thomas Sowell said something about it not being a great idea to hire arsonists to put out the fire they started.

19. sandy burger - September 24, 2008

Is this really because of the CRA? I’d like to see some actual data.

My guess is that this would have happened regardless. The reason I say this is that banks were signing people up for crazy mortgages in wealthy neighborhoods, too, where it seems to me the CRA wouldn’t apply.

20. pajama momma - September 24, 2008

I’m sorry for your loss.

21. sandy burger - September 24, 2008

just today I flipped my Ohio house to a relocation company for it’s appraised value in a dead market

Ouch. Yeah, I bet that felt great.

Hey, do you have a 401k? Have you checked it lately?

22. Michael - September 24, 2008

Hey, do you have a 401k? Have you checked it lately?

Yes and yes.

Gee, Sandy, I was almost starting to feel a little less depressed.

I’m sorry for your loss.

Thanks, PJ.

23. xbradtc - September 24, 2008

It really goes back to the mere existence of Fanny/Freddie. When the government implicitly (and later, explicitly) backs a competitor in an industry, guaranteeing they won’t fail, and writes the rules for that industry, to favor their entries into the business, the private companies are going to do foolish things to compete. They have to. And then, the foolishness will eventually catch up to them.

24. sandy burger - September 24, 2008

And when you’re pushing fifty, time is of the essence.

You’re still young.

You could light cigarettes off me today.

Man, that really sucks. You got screwed, all right.

25. BrewFan - September 24, 2008

I don’t have any data at hand but I suspect its less the CRA then it is people cashing out on the equity in their homes.

Folks are upside down on their mortgages now because they borrowed the max based on a ridiculous appraisal of their homes value. On top of that they got involved with negative-amortization ARMs to compound the problem, betting on the hope their property would never decrease in value and they could always refinance again if they had too.

26. S. Weasel - September 24, 2008

Oddly, the bank that holds my mortgage called me up last night to offer me an equity line at a good rate. I guess they’re mining the good risks for business; they must be hurting.

Young in “days of our lives” terms, Sandy, but gettin’ up there to be learning a new business in a new country. Particularly a freelance art gig — that’s all about connections, and I haven’t any.

27. Mrs Peel - September 24, 2008

I wish I could help, Weas. (You know, in some way that doesn’t involve money, ’cause I don’t have any either.)

I don’t even want to look at my retirement plan, but I won’t need it for many years, so that’s something, I guess. I really shouldn’t complain…a stock market crash right when I’m getting to the point of having cash to invest (i.e., post-raise next January) would only benefit me in the long run.

I just don’t like the fact that those of us who are fiscally responsible are the ones who are getting hurt the most. It isn’t just. And there are few things that infuriate me more than injustice. (Real injustice. I’m using “just” as opposed to “fair,” which unfortunately leads to the noun “injustice,” which is nowadays often used inappropriately.)

Well, better go feed the dog. And myself, of course.

28. Cathy - September 25, 2008

Thanks for the well-wishing and thoughts. I’m not spending time on the computer this week much. Decorator is in town and she’s got me busier than a one-armed wallpaper hanger with gators chomping at my butt. I’ll have to spend time catching up later.

And Mrs. Peel — I feel for ya and hope all is going well for you, sweetie.
Later.

29. Wickedpinto - September 25, 2008

I’m sorry for your loss, Michael and Cathy. On the bright side? You’ve moved to the GREATEST State and one of the GREATEST cities, are buying a suitable castle and still have the future pleasure of meeting the rest of the Texan hangers-on.

And puking lions.

30. Wickedpinto - September 25, 2008

Drawback to having a peak value property.

You need to find someone who can pay peak value, when you sell it.

31. Mrs. Peel - September 25, 2008

Sounds fun, Cathy. I am looking forward to decorating some more around here, once I get the cash. (Step one: fix the terrible landscaping!!) Please tell me you’re preserving the Persimmon Room, though. It sounds too awesome to lose.

Important Action Alert: I am cranky at the moment because I have a lot of random stuff going on, so don’t pay any attention to me. (That’s part of the reason I’m quiet lately. Everything I type comes out even bitchier and more selfish than usual, so I typically end up deleting it. If you can’t say something nice…)

Nighty night. Hope you guys all have great weekends.

32. Wickedpinto - September 25, 2008

was that Mike at aces a bit ago?

I thought Mike was always faithful.

33. Wickedpinto - September 25, 2008

as in religious.

Did cathy make mike religious? cuz he came off quite religious on his own.

Cathy was just better at it.

34. composmentis - September 26, 2008

Did cathy make mike religious?

Yeah, she makes him yell out “OH GOD!” a lot.

35. Lipstick - September 26, 2008

And “please God let me get lucky tonight, please God”.

“Let me be able to boink her by the pool — twice”


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