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Only it's not a bucket, is the U.S. economy. It has been said to be correct, only two products that you will ever need anything, "Duct Tape" and "WD-40."
The bucket is leaky, as Designer Mortgage] [emphasis added during the Clinton administration invented that allowed a low-income families to owners of houses. If you were able to sign your name, you managed to get a loan. Emphasis has been placed on your credit score is not your income. If you are in aTotal revenues of $ 30,000, which is insufficient for the highest standards, Loan Officer to get a loan car, it made no difference. Lender did not verify income, have taken into account only the FICO scores. As long as your credit score was below 690, you could perhaps have a house for $ 250,000.
FNMA and FMAC were borne by the federal government. They buy mortgages from lenders, which they come. Four years ago they were both in trouble because of fuzzy accounting. FNMA CEOFranklin Raines, pres. Clinton's former budget director, was fired. However, he did not leave in silence. It seems that it should depend on the office door with WD-40 sprayed so that it does not belong, he steals a $ 90 million dollar bonus will he gave himself up for outstanding achievements. (?)
Help FNMA Congress appeased by promises that the poor buy homes, helping them to obtain the loan. This led them to buy riskier and riskier loans from private lenders who do not careFNMA, because they wanted to buy. Thus, the possibility for everyone to make shaky loans. FNMA and FMAC bought trillions of dollars of these loans. In return, they sold them to financial institutions who bought into believing that they were safe because the government is behind it. We were assured only a manifestation of the government, in reality, they were not. These institutions are not the cure, the property was acquired or the risks they took as theySpread throughout the financial system.
However, in 2005, tried by the Senate Banking Committee, chaired by Republican Richard Shelby, an end to these practices by writing strong new regulations. That also prevents Fannie and Freddie with the acquisition of these bad mortgages. These new rules have the same power to create a new regulator, the regulator of banks has authority.
The vote was closely divided in half between the divisions of the party. AllRepublicans voted in the new regulation. The Democrats unanimously voted against. This includes the vote of the chairman of the Senate Banking Committee, Senator Christopher Dodd (D-CT), which receive the largest share of campaign contributions has been distributed FNMA. Next in line, behind Dodd, Barrack Obama was followed by Hillary Clinton.
This happened in 2005, after former Fed Chairman Alan Greenspan gave a stark warning to the Senate, the two agencies, who were playing with fire. Greenspan said"Without further measures, you increase your chances of failure and a severe financial crisis. Without limiting the size of FNMA and FMAC, we compromise our ability to provide safe and sound financial markets in the U.S." His prediction was hit the target.
However, because Democrats blocked the new law is never the light of the Senate that they deserved. Died in committee. That's how we shot a hole in the bucket.
In 2006, Senator John McCain, once again warned against the impending fate on the law and tried to write the draft of escape. McCain said: "For years I had with the rules that Fannie Mae and Freddie Mac and the extreme magnitude of these companies and the role that hit the housing market to govern. The GSE (Government Sponsored Enterprises) to be reformed without delay" .
Once again, the Democrats ignored the warnings. We lost the opportunity to prevent that breakdown. And if we learned> Volume is correct, we are very wrong. We can not just put a plaster on it.
Sen. Charles Schumer (D-NY) in April 2005 during the hearings of the Senate Banking Committee, said: "I think Fannie and Freddie have done over the years, and job incredibly well and is a deeply part of making America hosted some of the best people in the world. If you had over the last twenty years or whatever, they did a really watching, good job "was the first time" Chuck "as heis known to cause a catastrophe for the economy. The second was in June of 2008, when the bank said Indy will probably not meet its financial obligations. This time it was stupid enough to put in writing in the form of a letter questioning its solvency and profitability. This has led to a run on the bank and its failure in a week.
The irony is, Barack Obama, who tries to blame the Bush administration for the fair, we shall, in the company of Franklin Raines as one of itsChief Advisor. Yes, this is the same Franklin Raines, was sacked by FNMA 90 million dollars through books. She cooked so well, you should have an aspect of the score on Iron Chef America.
He forgot that in 2003 President Bush wanted to regulate Fannie and Freddie? When he asked Congress for regulation, it was Rep. Barney Frank (D-MA), who said: "Freddie and Fannie are fine, nothing wrong." Frank then locked up in committee.
The Washington Post FrankWho is openly gay, was involved in a relationship with an executive of Fannie Mae, Herb Moses, and appointed as his lover. Frank referred to Moses as his wife. The Post showed that the two had separated themselves remained friends. Frank was and remains a loyal supporter of Fannie Mae and Freddie Mac, both organizations are now under FBI investigation. Frank has tried to regulate the derailment of the 'institution, and continues to deny represents a financial risk. He is deaf, dumb and blind? When I saw theDefinition of arrogance in the dictionary, they said, Barney Frank, Chuck Schumer and Christopher Dodd.
Senator McCain has suspended his campaign and returned to Washington to work on the bailout package. Yes folks, that sees one days have a job, run for the presidency at this moment should be considered an extracurricular activity, which significantly Barrack Obama wants to continue to enjoy. Unless President Bush to invite both candidates to meet with him, do you really think Obama wouldleft in the campaign? Finally, he said, has the capacity to walk and chew gum at the same time. Obama wants to continue to shake hands and kiss babies. We define a leader? Black Sound familiar name?
Warren Buffett has described the current problem as "the next Pearl Harbor."
If the Senate and Congress listened Shelby, McCain and Bush years ago, we would not be in the chaos we see today. Good instincts usually tell you what to do, long before you headunderstood. It 'like driving on the road, when you are just above the hood of your car, you are obliged to try to make a barrier, because you do not see the road ahead.
Now, do not lose control of the senses, which means that the rescue of Fannie and Freddie reality, the government is now in the mortgage sector. And since over 98% of all owners pay their mortgages each month and on time, the government is in fact a useful saving. When we left the ChryslerCorporation in the seventies, the government has actually an advantage. According to automobile loans from the government paid the warrants sold on the open market.
Here the real irony. Seven hundred billion dollars, is not that the same amount of money they and their friends the Saudis for oil in a year?
So where lies the blame? The French philosopher Voltaire, once said: "Everyone is guilty of the good things that do not." You decide!
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