A Story of Federal Government Corruption

BANK OF AMERICA FORCED TO FINANCE LIBERAL ACTIVIST GROUPS

EXTORTION USED TO BE ILLEGAL

This story begins in 1977 with the passage of the Community Reinvestment Act. This law was passed in an effort to make home ownership more easily accessible to low income citizens. The original law encouraged banks to lower lending standards so that more minority and low income people could qualify for mortgages.  Initially there was resistance by the banks, but as time went by the foreclosure rate was low and banks became accustomed to lowering standards in some neighborhoods. The real estate market at the time was stable with just normal growth in market values, but as time went on more pressure was exerted on banks to lower down payment requirements and to overlook poor credit ratings. The lowering of standards was encouraged by both the Clinton and Bush administrations. In 2000 HUD Secretary Andrew Cuomo promised to buy 2 trillion dollars worth of affordable mortgages through Fannie Mae and Freddie Mack. This led to competition between all lenders to lower standards till eventually there were no down payments required. It also lowered standards on all mortgages as real estate values were increasing and those that got in trouble could usually unload the properties with minimal losses. This led to the packaging of mortgages into collateralized mortgage obligations. These mortgage-backed securities were then traded and purchased by many pension funds and other entities who wanted to participate in the housing boom. When mortgages could be had for less interest than banks were paying on CD's, it became obvious to some that there was a growing problem. I also remember Alan Greenspan stating that all was well and he saw no problems on the horizon.  He stated he was shocked when all went bust, but keep in mind that he resigned in 2006 just before the market collapsed.

As home prices skyrocketed, and everyone was convinced that the best investment was real estate, many knew that the end was near. The hysteria over the real estate market came to an end when gas prices rose to $4.00 a gallon and crimped the already tight budgets of many over-mortgaged home owners. It started with the sub-prime mortgages and soon spread to many other mortgages. Investments in mortgage-backed securities plunged in value and the collapse of investment companies began.

 After Lehman Brothers went bankrupt, Countrywide and Merrill Lynch were the next in line to fail. Henry Paulson, Treasury Secretary, and Fed Chairman, Ben Bernanke, pressured Bank of America to buy Countrywide and Merrill Lynch to stop the implosion. The executives at Bank of America looked at the financials and considered backing out of the deal. The Feds then pressured them so they could not back out and assured them they needed to do this to save the financial system; furthermore, the Fed guaranteed they would help Bank of America with this deal. Bank of America lost an estimated $40 billion on the Countrywide deal alone. But that was just the beginning of their problems. When Barack Obama was elected, he did not feel he owed anyone for deals made by the former administration. His Attorney General, Eric Holder, then indicted Bank of America for fraud in the investments of Countrywide. They threatened criminal charges against the executives if they would not agree to a settlement. Bank of America executives agreed to pay 16.6 billion in August 2014.

It has now been reported by several newspapers that part of this settlement was a side deal arranged by Holder that would allow the bank to make contributions to non profit organizations specified by the administration rather than pay the settlement to the Treasury Department as required by law. The deal would allow Bank of America to take a $2 credit for every $1 they contributed to the list of several hundred qualifying organizations. This required Bank of America to contribute a minimum of $50 million to community development organizations, $20 million to affordable housing groups, and $30 million to legal aid groups. This was the minimum; there is no limit to the amount they can give.  The administration claims this is all legal because they allowed Bank of America to choose who on the list that they contributed to. This arrangement is similar to the deals that have been given to CitiGroup and probably other banks.

Now some may say that the banks deserve this ill treatment and these non-profit groups are all good causes. In reality, this is an example of government corruption at its worst. This is the type of behavior seen in third world countries and dictatorships. You have coercion and the threat of government legal and/or criminal suits if you do not lower standards, then when it all goes bust you use coercion to buy the worst companies, and then extortion to take money and give it to the administration's political supporters. This is in effect exactly what has been done. Congress is supposedly investigating this, and those who have asked to see what groups have received these funds have been told it is confidential. These are the acts of lawless politicians who now believe they can do whatever they want and it seems they may be right.

This article was originally published 1/26/16

Mideast conflict: Little hope for peace.

  BOTH SIDES TRAPPED IN RETALIATION

ESCALATION WILL NOT BENEFIT ANYONE

Yesterday, we witnessed the Israeli invasion into southern Lebanon and then the missile attack from Iran on Israel. Today, as is the pattern, we can expect an Israeli attack on Iran, probably more severe than the attack from Iran. I see no one offering a solution to this decades old pattern of tit for tat, an eye for eye and a tooth for a tooth diplomacy. Is it the eternal destiny of this region of the world?

Everyone can empathise with the frustration of Israel's never ending conflict. Many also empathise with those caught in the crossfire who have no options other than attempting to survive. No one seems to have any serious ideas of a solution that would be acceptable to all. Is complete and utter annihilation of one side or the other the only option left? Or will it end with both sides devastated to the point of utter destruction.

This conflict is now even more complicated due to alliances that have been established due to the Ukraine conflict, they have now been linked as never before. At one time there was communication and cooperation from Russia in negotiating some measure of patience and objectivity, that is now no longer possible. Global alliances are now at odds in a manner not seen since WW2. 

While no one, including myself, see an immediate solution to this crisis, we should all be able to agree the present course needs to be ended now. Israel has been conducting operations in Gaza for a year, I don't know that any progress has been made. Are things better now? Is there hope of it being better? Is the only solution the elimination of the population? Does anyone believe that operations against Iran can be successful, short of nuclear war? No one, including the United States is going to enter into a ground war in Iran. Even regime change will not change the course of this crisis.

We can place the blame for all this global crisis on the serious lack of any real diplomacy today. The present U.S. diplomacy is, send more weapons and threaten intervention by western armies. Armies that no longer are feared as they once were by many who have lost all respect for the U.S. due to its decline in respectability and substance. A sad state, that if embarked on, may take decades to correct. 

Again, the world is ready to erupt into war and increased chaos. I see no evidence that it will be avoided by the present leadership in the western world.

Ukraine: Pivotal moment in world economic order.

 CHANGES SET IN MOTION CANNOT BE REVERSED

GLOBALISMS TWO EDGED SWORD

While many still want to believe that the Ukraine war is a product of Russia's and Putin's hope to reestablish the former Soviet Union, the reality is that this conflict was in the planning, by the west, for decades. It was a plan outlined by former national security adviser Zbigniew Brzezinski and it seemed it took hold in the U.S. state department by those who followed him. The idea was that if Russia could be broken up into smaller parts it would be able to be diminished in its capacity and it would be available to the west as as source of resources. It seems we are seeing the results of this misguided adventure as the war in Ukraine is going to come to an end shortly after the next U.S. election, no matter the winner of the U.S. election.

The reaction to the war in Ukraine and the sanctions levied around the world has set in motion the greatest change in the world economic and political alliances since WW2. It is now a situation that can no longer be reversed. The best hope by the west is to adjust and manage the changes. The alternative is a global war with no winners. At present we are on the verge of just such a war.

This conflict and the sanctions used to control alliances have resulted in pushing Russia and China into an alliance that is based on the survival of both, it is unlikely they will be seperated. The use of the present monetary system as an economic and political weapon has pushed much of the world into an alliance that has divided the world into the west and soon most of the rest. It is on an unstoppable course.

The proposed tariffs and economic boycotts proposed by both candidates for president will bring about economic crisis in much of the western world. The duel edge sword of globalism will swing very hard into the consuming nations in favor of the producing nations. We are witnessing the results of these policies now.

The U.S. attempt to starve China of silicon chips has resulted in them now manufacturing their own and may soon dominate that market. At the same time they have cancelled the grain contract from the U.S. that may see a drastic drop in prices of grain in this country. This will cause the loss of many farms in this country and their impact on the domestic market may be unestimatable. Europe's coming tariffs on Chinese cars has already indicated the end of purchases of many EU products by China. This may be only the beginning.

At the same time, China is replacing their grain purchases with contracts in Russia, Brazil and other countries not part of the sanctions regime. If Russia should actually curtail their shipments of fertilizer, oil, gas, and raw materials to western countries they will be dire economic straits.

We are witnessing the new alliance shaping up that will encompass most of the nations of Asia, Africa and even South America, that can and will prosper by trading amongst themselves. Can the west prosper without trading with them?

The best hope is that an adjustment in U.S. and the west's foreign policy recognizes this new reality and commits to a policy of coexistence and cooperation rather than a system dictated by the west. 

The reality is that the U.S. through its fiscal mismanagement, corruption and hope to rule the globe has squandered its place in the world that has existed since WW2.  It no longer has the economic and political power to control these events, and it if decides to rely on its military power it will be a global catastrophe.