“I want everyone to follow this line of reasoning. Bearsterns collapse!!! Morgan Stanley bought a 171 a stock company at its peak for 2 dollars a share. Morgan Stanley is guaranteed by the FED and backs all loans and losses attributed!!! What does that mean? It means that the Fed bought all those mortgage backed securities. Well you may think they are stuck with the hot potatoe. Well, there not that stupid,…remember they caused this disaster…..its exactly what they want. How you may ask is this good for them? Well when those morgages default they get em….And what to they own, REAL HOMES. REAL SHIT. And what did they trade it for, da da da daaaaa………………..paper!!! Yes, while it cost us time and energy to earn dollars, they just print it…it cost them 250 to print 1,000,000 dollars….so a 200billion investment of worth they buy real assests, cost them 1.5billion!!!!!!!!!!!!!!!!!!!!!!!! it’s a ponzi scheme…..pure and simple…..thats a like a 2000% profit!!!!!!!! While we get stuck paying it in inflation….”
I really thought Spitzer was a scumbag, buying whores on my tax tab on one hand and running a campaign based on family morals (including shutting down brothels) on the other side. He appeared to be a political hypocrite at its worst.
But then I came across an article he wrote in the Washington Post on February 14th 2008, just a month before his public derailment. You should check out the comments on the article on the Washington post web site. The article is printed below as well. He makes a lot of very good points in it and accuses the banks and Bush cronies of actively causing the mortgage crisis to make money for themselves. It is a harsh criticism of the Bush administration and shows that Spitzer has been at odds with them for quite some time.
Was Spitzer’s sexual issues put into the public eye to stop his criticism of a much more serious problem?????
Here is a video commentary by Brasschecktv.com where his speech is also read in its entirety (Brasschecktv.com is great BTW).
The article:
Washington Post
Predatory Lenders’ Partner in Crime
How the Bush Administration Stopped the States From Stepping In to Help Consumers
By Eliot Spitzer
Thursday, February 14, 2008; A25
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive “teaser” rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government’s actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.
When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.