“Soft despotism is a term coined by Alexis de Tocqueville describing the state into which a country overrun by "a network of small complicated rules" might degrade. Soft despotism is different from despotism (also called 'hard despotism') in the sense that it is not obvious to the people."

Monday, July 14, 2008

Affirmative Action and the US Financial Meltdown Part II

"Don't leave home without it."

There will not be one word from our rulers and masters as to the real reason why this happened. It will not be mentioned by the MSM or any of the political candidates. Affirmative action in hiring and lending did this.

I defy anyone to present an argument proving otherwise. I will welcome it on this blog and will post it and subject it to comment and scrutiny. I doubt it will come. Fear will override analytical thought and question. Racial intimidation in the US is so complete. Do not read me wrong. The bail-out it necessary. The economic disaster is that bad and the calamity could only get worse, but the social architects that brought on this collapse will not be exposed nor will they step forth and fall on their swords for what they caused to happen.

You are poorer tonight, not because of the rescue effort, but because of what caused it in the first place. That has not been addressed and will not be. That is the pathetic state of the United States of America and the unworthy who lead.


White House, Fed will rescue Fannie, Freddie

Government-sponsored lenders are too global to go under, Paulson says

By Greg Robb, MarketWatch
Last update: 8:08 p.m. EDT July 13, 2008
WASHINGTON (MarketWatch) -- The implicit government guarantee of Fannie Mae and Freddie Mac is now explicit.
In a dramatic statement released Sunday, the White House and Federal Reserve moved to give the mortgage giants the capital they need to survive the depression in the housing market and turmoil in financial markets that had left them dangling over a cliff.
Of most immediate importance, the Fed's board of governors voted to open up its emergency discount window to Fannie and Freddie.
In addition, Treasury Secretary Henry Paulson announced that he will seek Congressional authorization to by stock in the two companies and increase the government's credit line to them.
At the moment, each company may borrow only $2.25 billion.
In return for the capital, Paulson said that the Bush administration would ask Congress to grant the Fed a "consultative" role in the capital standards of the companies.

The rest of the cover-up here


  1. Article

    It seems that 1% of all mortgages are in foreclosure, that of the subprimes it is 4.06%, and that about 1 in 11, or 8.8% are past due.

    Analysts said that at first, past-due mortgages represented mostly high-risk loans made to borrowers with blemished, or subprime, credit. Now, as the economy has weakened and home prices have fallen in many parts of the country, homeowners with better loans also are falling behind.

    Falling home prices also are contributing greatly to foreclosures. Homeowners who owe more on their loan than their homes are worth are more likely to default if they encounter financial distress, said Robert Van Order, an adjunct finance professor at the University of Michigan

    Gentlemen, it's a buying opportunity. Buy that Vegas get-a-way now. Buy now, before the rescue stabilizes prices.

    God Bless Unca Frddie and Auntie Fannie, I can afford that condo.:)

    I'd like to see some reliable figures on race and defaulting loans before I buy the entire thesis. I think it's more widespread than that.

  2. The mismanagement just part of the "Plan" to give the Federal Reserve control over the mortgage markets, in the US.

    As other, fully capable folk, figured, that 1% of mortgages equals $50 billion USD.

    A small price to force others to pay for the Federal Reserves owners to gain control of that market.

    We will now "restructure" US credit markets, putting the private owners of the Federal Reserve in control of the $11 trillion USD market, for our own good.

  3. U.S., Iraq Scale Down Negotiations Over Forces
    Long-Term Agreement Will Fall to Next President
    By Karen DeYoung
    Washington Post Staff Writer
    Sunday, July 13, 2008; Page A01

    U.S. and Iraqi negotiators have abandoned efforts to conclude a comprehensive agreement governing the long-term status of U.S troops in Iraq before the end of the Bush presidency, according to senior U.S. officials, effectively leaving talks over an extended U.S. military presence there to the next administration.

    In place of the formal status-of-forces agreement negotiators had hoped to complete by July 31, the two governments are now working on a "bridge" document, more limited in both time and scope, that would allow basic U.S. military operations to continue beyond the expiration of a U.N. mandate at the end of the year.

    Where we will spend much more than $50 billion USD in the course of the next 365 days.

  4. On the Federal Reserve taking control of the $11 trillion USD market.

  5. This is from the Boston Federal Reserve Bank

    "66 Lending bias is inseparable from the broader issue of race in our society: discrimination is not unique to mortgage lending. In our nation
    of some 250 million people, approximately 76 percent are white, 12 percent are black, 9 percent are Hispanic, 3 percent are Asian and Pacific
    Islanders, and less than 1 percent are Native Americans. For the most part, we live and work separate from each other in rural areas, suburbs, and urban neighborhoods. Cultural separation perpetuates social biases – biases that are
    expressed in our work and in our institutions.

    It is beyond the scope of this guide to analyze the complex, historical forces that have shaped race
    relations in the United States. For the purposes of this publication, we distinguish among three types of discrimination: overt, intentional discrimination; subtle, deliberate discrimination; and unintentional
    discrimination. Overt discrimination in mortgage lending is rarely seen today. Discrimination is more likely to be subtle, reflected in the failure to market
    loan products to potential minority customers and the failure of lenders to hire and promote staff from racial and ethnic minority groups.

    Unintentional discrimination may be observed when a lender’s under- writing policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower–income minority applicants."...

    You want to know how it happened read the bulletin from the Boston fed closing the Gap

  6. Social engineering by every part of the US Government and every agency and supplier and purveyor of goods and services is all under the scrutiny of our racial masters. The racial masters and minders include Jesse Jackson, Al Sharpton and others with a refined nose for any scent of racial insensitivity. In their considered opinion, of course.

  7. The pervasiveness of this racial minding is complete. A significant portion of the racially lobotomized will vote for Obama so as not to appear to be prejudicial and harbor un-pure racist thoughts.

  8. Credit History: Policies regarding applicants with no credit history
    or problem credit history should be reviewed. Lack of credit history should
    not be seen as a negative factor. Certain cultures encourage people to “pay
    as you go” and avoid debt.


  9. The dumbed-down bastards forgot that they were bankers and they were to set the rules!

  10. "Sorry officer, but in my culture we ignore red lights."

  11. Government as the Big Lender

    In short, in a nation that holds itself up as a citadel of free enterprise, the government has transformed from lender of last resort into effectively the only lender for millions of Americans engaged in the largest transactions of their lives.

    Before, its more modest mission was to make more loans available at lower rates. Now it is to make sure loans are made at all. The government is setting the terms and the standards of Americans’ biggest loans.

    On Sunday, that federal oversight and protection was made more explicit, as the Bush administration sought to mount a rescue of Fannie and Freddie, asking Congress to devote public money to buying the two companies’ flagging stocks.

    The new reality is scorned by libertarians and conservatives, who fear state intrusions on the market, and by populists and progressives, who dislike the idea of education and housing increasingly resting upon the government’s willingness to finance it.

    “If you’re a socialist, you should be happy,” said Michael Lind, a fellow at the New America Foundation, a research institute in Washington. “But you should really wonder whether you want people’s ability to pay for housing and college dependent on the motives of people in Washington.”
    “What’s happened kind of speaks for itself,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “You had this effort to weaken the government’s role. There was this conscious effort to turn things over to the private sector, and it failed.”

    But there is a parallel narrative, the story that critics and competitors of Fannie and Freddie have told for years: how the two companies exploited their pedigree as entities backed by the government to secure an unfair advantage over the private sector.

    They swelled into highly leveraged behemoths, it was said, on the implicit guarantee that the government would step in and rescue them if they ever got into trouble. This allowed them to borrow money more cheaply than their competitors could, enabling them to make loans more cheaply.

    That secured more business and rewarded their shareholders, along with their handsomely compensated executives. It emboldened them to trade in highly risky investments.

    “They were using their privileged position as favored children of the government to dominate the market, and taxpayers were on the hook for substantial risk,” said Martin N. Baily, a chairman of the Council of Economic Advisers in the Clinton administration. “You couldn’t possibly say this was a pure unfettered market.”

    The government was getting something for its protective largess. It was using Fannie and Freddie to pursue the social goal of broader homeownership, particularly among racial minorities.

    “When you’re looking at the upside, here’s the government helping people get mortgages and student loans,” said David R. Henderson, a self-described libertarian economist at the Hoover Institution at Stanford University. “The downside is there might be a bailout and then you pay in taxes. These things don’t come cost-free when government gets involved.”
    Yet here, in the aftermath of a financial crisis brought on by what were once called American virtues — financial engineering and risk management — Washington may bail out Fannie and Freddie for the simple reason that they are too big to fail. If they go down, so do whole neighborhoods. So, perhaps, does the global financial system.

    “The thing we have to do now is to make sure that Fannie and Freddie remain solvent and continue to make loans,” Mr. Baily said. “We just don’t have any choice.”

    How the government came to dominate these two crucial areas of American lending is — depending on one’s ideological bent — a narrative of regulatory and market failure, or a cautionary tale about bureaucratic meddling in commerce. Perhaps it is both.

  12. Inclusion doesn't include majority rules. Inclusion must be examined in light of cultural differences and experience. Rules are subjective and often prejudicial in favor of the majority, who has no minority reference or experience in dealing with minority sensitivities. Beat me please.

  13. This comment has been removed by the author.

  14. "The new reality is scorned by libertarians and conservatives, who fear state intrusions on the market, and by populists and progressives, who dislike the idea of education and housing increasingly resting upon the government’s willingness to finance it."

    So who exactly is for this?

  15. The sample means, reported in Exhibit 1, illustrate Black borrowers have substantially higher default rates (.065 vs. .009). The data suggest several reasons for these higher default rates that are unrelated to race. Blacks borrowers have about one-third less EQUITY and 30% of Black household have negative EQUITY, while only 16% of other households have negative EQUITY. Also, Black households in this sample are more likely to live in the three Southern states (Texas, Oklahoma and Florida), which experienced lower house price appreciation and higher default rates during the sample period. Also, Black borrowers may have lower default costs, as evidenced by 40% less INCOME.

    The variability of house prices is directly related to the value of the default option imbedded in the mortgage contract. Because increases in VARPRICE raise the value of the mortgage, borrowers are less likely to default. STATE is included to measure locations (Florida, Texas and Oklahoma) which likely experienced real estate price declines and higher selling costs due to market weakness.

    Mortgage Default Rates and Borrower Race

    It's a complex question.

    Didn't Ben Franklin say 'neither a borrower or a lender be'? The Catholic Church in its heyday called the whole thing usury, and made it illegal.

  16. The owners of the Federal Reserve, mat.

  17. Native Americans got along ok without it, and the muzzies aren't supposed to charge interest to other muzzies.

    The one thing I know for certain is in my life I've paid a truckload of interest.

    Basic point of view: bankers are all parasites, but you can't live without them.

  18. They're for the gov bailing gov banks that give extra low interest loans to high risk borrowers that no one else would lend to? I don't get this. How is that of benefit to them?

  19. The government was getting something for its protective largess. It was using Fannie and Freddie to pursue the social goal of broader homeownership, particularly among racial minorities.

    Surely this is not a bad thing as an ideal.

  20. I can't even begin to estimate the numbers of farmers, ranchers, loggers that have gotten tons of help from Uncle Sam. I don't want to live in a class society. I want to live in a middle class society.

  21. No one thought it through. Years ago I fired a union truck driver too drunk to stand. It was witnessed by three other drivers. I fought the National Labor Relations Board in order to get rid of him. It cost me $30,000. It cost him nothing. Think about it. What business of it in Washington if a business owner fires a drunk truck driver?

    Bankers are under the rule of governmental agencies. Any one of several can put them out of business. They go along with the program like good Germans and do as they are told.

  22. But I don't get this. Who is it in government that is for this?

  23. "Hell is paved with good intentions."

  24. Yhe Federal Reserve is of the banks and for the banks.
    Note that the major mortgage companies, like Citywide, were not banks. But used the banks as a secondary market. By creating turmoil in that secondary market, the banks will gain greater control of the primary market.

    We can simply look at the most recent list of shareholders of the New York Federal Reserve Bank. According to the N.Y. Fed itself, as of June 30, 1997 the top eight shareholders were

    Chase Manhatten Bank
    Morgan Guaranty Trust Company
    Fleet Bank
    Bankers Trust
    Bank of New York
    Marine Midland Bank
    Summit Bank.
    All of the major shareholders seen here and all of the banks on the complete list are either nationally- or state-chartered banks.

  25. Mat. They do not have a choice. The whole banking system collapses without it. Like it or hate it, it must be done. My point is about how it happened and how similar things will happen in the future.

  26. Not the Government, amigo, the Federal Reserve.

    The two are not the same.

  27. THe Federal Reserve, Greenspan and Company, put the marketplace in such a situation that the elected politicos have to grant the Federal Reserve ever greater jurisdiction over the marketplace.

  28. Fear of charges of sedition stifles constructive suggestions of remedies. Corruption of the intended system is so complete that internal correction is no longer likely.

  29. Why is it called the Federal Reserve?

  30. None of their damn business at all.

    They made the terms too easy, from political pressure.

    Best banker I ever had was my lawyer. He actually did me some good. No timetable, no pressure, allowing me to market my wares in the proper fashion. It's rare you bump into something like that, though.

    The only time I fought Uncle Sam was when the crop hail guy tried to skimp me. Finally won.

    I had a loan most of my life with Farm Credit Services, a kind of semi-independent deal. Back around the days of Carter and low crop prices it was getting in trouble, and the farmers got some relief in the form of delayed foreclosures, that kind of stuff. Market turned around. Now everything is rosy. One more payment to make, which I am doing this month.

  31. Marketing and misinformation, mat.

  32. Was it not Citibank that the wahabbist money bought into?

  33. So,

    The Gov owns the Fed Res.
    The Fed Res owns the Banks.
    The Banks owns you.

    So in essence the Gov owns you.
    Gee, so what else is new.

  34. The Fed Res is not a Gov agency? Who appoints its members?

  35. Anyway, this stuff is way over me head. Good night all.

  36. The current system of private management of the US money supply has done US reasonably well, in a material sense, over the past 100 years.

    We are at the top of the heap, still.

    I bet an Amero, maybe two, that it stays that way.

  37. Night there, Mat. The government doesn't own your dreams.

  38. The members, owners, of the Federal Reserve are the member banks.
    Not all bamks have been members, historicly. But today most of the major banks are.

    The Board of Governors of the Federal Reserve System plays a major role in making U.S. monetary policy.

    The seven members of the Board are appointed by the President of the United States for staggered 14-year terms.

    The Board of Governors supervises the work of the Federal Reserve Banks and issues a variety of banking and consumer-credit regulations.

    The Federal Reserve System, the central bank of the United States, conducts the nation's monetary policy, supervises and regulates banks, and provides a variety of financial services to the U.S. Government and to the nation's banks.

    The Federal Reserve System is supervised by the Board of Governors. Located in Washington, D.C., the Board is a Federal Government agency consisting of seven members appointed by the President of the United States and confirmed by the U.S. Senate. The Board has a staff of about 1,850 employees.

  39. Release Date: July 13, 2008

    For immediate release
    The Board of Governors of the Federal Reserve System announced Sunday that it has granted the Federal Reserve Bank of New York the authority to lend to Fannie Mae and Freddie Mac should such lending prove necessary. Any lending would be at the primary credit rate and collateralized by U.S. government and federal agency securities. This authorization is intended to supplement the Treasury's existing lending authority and to help ensure the ability of Fannie Mae and Freddie Mac to promote the availability of home mortgage credit during a period of stress in financial markets.

  40. And the great news is that the acumen showed by comrades Freddie Mac and Fannie Mae will be applied to your health care.

    Under Clinton, 25% of their mortgages had to go to the worthless/useless.

    Under BushII, that went up to 39%.

    Feel the compassion in your next tax bill hermanos y hermanas.

    The GOP loves all.

  41. Sounds like a bushel of compassion, to me.

  42. *Lightbulb*

    I knew that picture looked familiar...

    You still play PC games D-Day?

  43. it's racist to demand that those with crappy credit actually earn the right to purchase homes...

    i do wonder what the number of white trash that qualified for loans verses black trash...

    I suspect the numbers will bear out the overwhelming numbers of load were to white trash....

    the general thought process in the early 2000's was, everyone gets a house, no matter how pathetic the person's ethics, savings pattern were...

    couple that with appointments to high positions in the government because of 'diversity" it was a perfect storm...

    but now? it hard to BUY a house again... GOOD.

    those who can EARN and WORK and STRUGGLE can buy one, just like most of us have done...

    those who cant? they will rent, and if the are tenants like the white trash that trashed MY old house, there will be section 8 housing...

  44. Yeah, there's some public housing across the street from my apartment.

    Let's just say that if I was to accidently wander into it I might never be seen again.

  45. Analysts Say More Banks Will Fail

    There is less danger than in the savings-and-loan crisis of the 1980s, but as many as 150 U.S. banks could fail over the next year, analysts say.
    Times Topics: Fannie Mae Freddie Mac
    S.E.C. Warns Wall Street: Stop Spreading the False Rumors

    Treasury Acts to Save Mortgage Giants
    Billions in Support for Fannie Mae and Freddie Mac

    Announcement of the plan to inject billions of dollars through investments and loans was intended to show that the government would stand behind the beleaguered companies.
    Text of Paulson Statement (

  46. Arnold may consider Obama energy post

    I would love to see Arnold Terminated in a Gulfstream Fireball.
    ...but that's just me.

  47. "I think it would be a profound mistake for us to use nuclear weapons in any circumstance"


  48. To Divide or Not To Divide--Obama Gets All Twisted Around Over Jerusalem

    Sam, if we would be making a profound mistake to use nuclear weapons in any circumstance, we might as chuck 'em, I'd think. Use the money to pay down Feddie and Fannie.

  49. Keep em all.
    Build new ones.
    They get stale.

  50. he Dead Sea Scrolls have produced an extraordinary response in museum guests at every venue where they have been exhibited. This exhibition links the spirituality of The Dead Sea Scrolls with the archaeological mysteries.

    The exhibition begins with the discovery of the Scrolls in 1947 and follows the known history of the Scrolls to present day. From scholarly research in the latter half of the twentieth century an understanding of the origins of The Dead Sea Scrolls, Qumran and life during the Second Temple Period begins to unfold.

    The guests are drawn into the exciting drama of the 1947 discovery by a Bedouin Shepherd of the first of eleven caves housing what is now known as The Dead Sea Scrolls. Through photos, artifacts and graphic panels, the subsequent years of excavation are illustrated, including samples of what was discovered in the caves, and the adjoining excavation at Qumran.

    Scrolls Come to Raleigh

  51. Frank Fish of West Chester University in Pennsylvania began to study the humpback whale fin while on vacation in Boston in the early 1980s, where he saw a statue of a humpback whale in a shop in Quincy Market. He assumed it was sculpted incorrectly, because the figure showed bumps along the front edge of the flipper.

    "It just didn't make sense," Fish said. One of the cardinal lessons of fluid mechanics is that the leading edge of a fin or wing needs to be smooth to create the flow that provides lifting force.

    Fish mentioned it to the shop owner, who pulled out a photo of a humpback whale, clearly showing the bumps in front.

    Turbine Tech

  52. Frank Fish studyin' 'bout Humpbacks.


  53. Shit, the Rooskies got the FOAB, Father of All Bombs.

    Bomb Gap!

  54. Yeah, that wikipedia said there was a tinge of BS to the FOAB, though.

  55. Went to the hospital with an old girlfriend a few years back. Her sister was giving birth. One of the obstetricians in the ward was named Dr. Stork.


  56. Barry was delivered by Dr. Dork.
    Biological splendor at Olympic National Park

    It's hard to think of anywhere else in the lower 48 where a wilderness of such heft and intensity lies practically within commuting distance of a major metropolis. Blue-ice glaciers, rain forests thick with moss-draped Sitka spruces and miles of deserted, driftwood-piled beaches are just a ferry ride across Puget Sound from the overcaffeinated headquarters of Starbucks and

    So are mountain lions, Roosevelt elk and the occasional black bear. There are streams swollen with salmon, pristine alpine lakes and mountains beyond mountains. The place even boasts some of the tallest trees in the world.

    In all, Olympic National Park comprises more than 900,000 acres of the Olympic Peninsula - a hunk of land that juts like an apostrophe from mainland Washington. Outside Alaska, few places in the United States are as environmentally and biologically diverse.

  57. Dr. Bill thinks this Freddie and Fannie stuff is way overblown. Don't forget the underlying assets are still there, devalued a bit, maybe 15%. Good time to buy, or buy Freddie and Fannie, he thinks.

    In history, Billy the Kid bit the dust on this day.

  58. “What’s happened kind of speaks for itself,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “You had this effort to weaken the government’s role. There was this conscious effort to turn things over to the private sector, and it failed.”
    What's happened is Dean Baker has become well practiced at turning reality on it's head and then articulating the stunt.

    The private sector came up with that 39% quota on it's own?
    Nice job, Deano.

  59. Bush Plan to Save Fannie, Freddie Stirs Confidence

    by Scott Ott

    (2008-07-14) — The Bush administration’s plan to use the Federal Reserve and the U.S. Treasury to save two mismanaged quasi-governmental mortgage companies has already revived confidence in the U.S. free enterprise system both at home and abroad.

    “This just proves that American capitalism works,” said an unnamed analyst from Bear Stearns. “The self-correcting mechanism of free markets still happens as if guided by an invisible hand. This week we caught another glimpse at that hand. Too bad Adam Smith wasn’t alive to see it.”

    Around the globe, investor faith in the U.S. economy was buoyed by the news that the federal government had stepped in to prop up Fannie Mae and Freddie Mac, the two firms which either hold, or back, about half of the mortgages in the United States.

    “The true measure of strength is one’s willingness to seek help in time of need,” said one investor. “When Freddie Mac and Fannie Mae came crawling to the U.S. taxpayer to bail them out, their executives boldly showed that they’re not afraid to be vulnerable.”

    Confidence also swelled because the two mortgage giants will get rescued using OPM — other people’s money — another signal to investors of the stability and integrity of these firms.

    President George Bush, speaking to a group of skittish fiscal conservatives today at a gathering sponsored by The Club for Growth, said the rescue plan made sense.

    “Fannie Mae is not some faceless bureaucracy,” said President Bush. “It’s an American institution. It’s personal. So when we use taxpayer dollars to keep it from going under, we’re not trying to save some mortgage company out there, my fellow Republicans, we’re trying to save your Fannie and mine.”