Thread: The Mother Of All Financial Scandals, The Fannie Mae and Freddie Mac racket

Franklin Raines, the Clinton-era head of corrupted Fannie Mae, does not feel your pain. While Barack Obama rails about unfettered greed and callous Washington lobbyists, his friend and consultant made off like a bandit…and has just sold and bought multi-millionaire homes.

Crisis? What crisis? Sacrifice? What sacrifice?

From Washingtonian magazine: http://www.washingtonian.com/article...rden/9310.html

Franklin Raines, the former top man at Fannie Mae, bought a three-bedroom, seven-bath penthouse condominium in the West End’s Ritz-Carlton Residences for $4.9 million. The condo has a rooftop terrace with a hot tub, a butler’s pantry, and three parking spaces. Raines, director of the US Office of Management and Budget under President Clinton, was CEO of Fannie Mae from 1999 to 2004.

Via USAToday, we learn that Raines just sold his old home after splitting with his wife for $7.6 million. http://blogs.usatoday.com/ondeadline...nie-mae-c.html

A quick reminder:

“Regulators have said that of the $90 million paid to Mr. Raines from 1998 to 2003 at least $52 million — more than half — was tied to bonus targets that were reached by manipulating accounting,” The New York Times reported two years ago.

Wouldn’t it be a novel idea if McCain himself would start hitting on this?

Sigh. Never mind…

http://jimtreacher.com/archives/001630.html

Fannie Mae and Freddie Mac must go
By David G. Oedel
Thu Oct 9, 4:00 AM ET

Macon, Ga. - At the time, it was perhaps the biggest bailout in US history. Today, one month later, the federal takeover of mortgage giants Fannie Mae and Freddie Mac has been all but forgotten in the drama of the global credit crunch.

Washington careened off to pass a bigger bailout before a clear plan emerged about Fannie's and Freddie's future. The uncertain cost of their conservatorship is sobering enough, but a more subtly troubling matter is what to do with them after things settle down. There are several options, but history gives a clear warning: Nationalization of industry is easy; privatization is hard.

Some say that this is uncharted territory, but that's flat wrong. Washington has tried to privatize Fannie Mae before. In 1968, Fannie was a government agency that had been serving to inject liquidity in the housing market for 30 years, but finally President Johnson signed legislation ordering it out of the governmental garden. Easier said than done, as it turns out.

Fannie was given a new corporate charter and soon after, in a slight twist on Genesis, a manly mate for company, Freddie Mac. It was hoped that the two firms would propagate a new, competitive secondary mortgage market outside of Eden.

Fannie and Freddie instead decided they liked Eden just fine, thank you. They didn't leave, few complained, and nobody else horned in. The secondary mortgage market remained a haven practically closed to others because of the implicit guarantee that the two government-sponsored enterprises would be rescued by that supreme sponsor if they ever got into trouble. This gave Fannie and Freddie two preemptive advantages over potential competitors: the cost of their funds and their capital requirements were both lower. Fractional marginal advantages are killers in finance when you start multiplying into the trillions.

Things greened up nicely in the garden of the secondary mortgage market until la-la accounting practices called attention in 2003 and 2004 to the curious, hothouse nature of these entities and their almost surreal approach to finance. Rather than figure out how to disentangle Fannie and Freddie from the government garden, though, Congress opted instead to press them into "service" to fertilize housing finance beyond traditional limits of prudence. We then got wild growth in lending, complete with no-doc loans, nothing-down houses, equity-line hustles, phony appraisals, and gyrating figures on every computer screen gleefully shaking the money tree.

When Fannie and Freddie were finally nationalized, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke only briefly touched on the issue of what to do with them in the long run. The current thought is to downsize them gradually at a rate of 10 percent per year, slowly privatizing the field.

But a mechanistic form of gradual privatization seems as unlikely to work as the attempted privatization of Fannie in 1968. Why would a private competitor want to compete at all with a couple of subsidized favorites? How can government be in a field without dominating it?

As Russia and China have discovered, it's very hard to privatize any sector of the economy long dominated by government. But at least those countries know something about the subject. In a rather strange turnabout, America might be well served by looking into their experience in privatization for useful lessons (while perhaps snaring some advice on the interim problem of how to run a hale and hearty system of financial socialism). In any event, our own limited experience on the subject of privatizing the secondary mortgage market is definitely not worth repeating.

One promising alternative to consider is to have the users of the service – the banks and other mortgage originators – create and mutually own new loan clearinghouses to do the useful business conducted by Fannie and Freddie. That basic concept of mutual ownership has worked well in the credit card business.

However, those kinds of cooperatives can only work if government competitors clear out. When government gets into a clearing business or regulates it to the point of close confinement, the private entities and innovation disappear, as happened in the check-clearing business early in the 20th century.

Whatever the path to privatization of the secondary mortgage market, though, one precondition for success seems likely: Fannie and Freddie must go.

• David G. Oedel is a professor of law at Mercer University Law School.

http://news.yahoo.com/s/csm/20081009...szyF.LAWys0NUE

Freddie seeks gov't aid after $25.3B loss

http://www.breitbart.com/article.php...show_article=1


WASHINGTON (AP) - Freddie Mac is asking for an initial injection of $13.8 billion in government aid after posting a massive quarterly loss Friday.

The mortgage finance company is making the first request to tap the $200 billion promised by the Treasury Department to keep it and sibling company Fannie Mae afloat after the two were seized by federal regulators in September. Freddie Mac said it expects to receive the money by Nov. 29.

The McLean, Va.-based company posted a loss of $25.3 billion, or $19.44 per share, for the third quarter. The results compare with a loss of $1.2 billion, or $2.07 a share, in the year-ago period.

Analysts were divided about whether Fannie and Freddie's losses would ultimately exceed the government's $200 billion pledge. And that may partly depend on the extent to which Fannie and Freddie are used by the government as a tool to ease the foreclosure crisis.

"There is no way that $200 billion will be sufficient, especially as these companies are called on to, frankly, take losses ... for the good of society," said Josh Rosner, managing director of research firm Graham, Fisher & Co.

Others say it's unlikely that losses will soar so high. "I find it difficult to be believe that it will get that far," said Credit Suisse interest rate strategist Ira Jersey.

Ever since the government takeover, Fannie Mae and Freddie Mac's debt has suffered from a lack of confidence among international bond investors. They are concerned about whether or not the U.S. government firmly stands behind the companies' debt.

Once the government actually injects money, that could help resolve that uncertainty, said Alex Pollock, a fellow at the American Enterprise Institute in Washington.

"It will be a demonstration to the international bond buyers of the government's true commitment to supporting these companies," Pollock said.

Fannie and Freddie own or guarantee about half of U.S. mortgage loans. If the companies can pay a reduced premium for their debt sales, that could translate into lower mortgage rates for U.S. consumers.

Freddie Mac's third quarter loss was mainly due to a $14.3 billion charge to reduce the value of tax assets, but also was driven by $9.1 billion writedown on mortgage securities, and $6 billion in credit losses from soaring mortgage delinquency rates and foreclosures.

Freddie Mac said that rising unemployment rates, tightening credit and deteriorating economic conditions "contributed to a substantial increase in the number of delinquent loans," including prime loans made to borrowers with strong credit.

"Continuing home price declines and growing unemployment are now affecting behavior by a broader segment of mortgage borrowers," the company said in a Securities and Exchange Commission filing.

Freddie Mac's overall delinquency rate rose to 1.22 percent, from 0.9 percent at the end of June, and 0.5 percent a year earlier. The number of foreclosed properties that Freddie Mac holds rose to 28,000, from 22,000 in June.

Freddie Mac also disclosed a dispute with JPMorgan Chase & Co., which purchased failed thrift Washington Mutual in late September. JPMorgan has refused to take back bad loans made by Washington Mutual, Freddie Mac said in the SEC filing. Both Fannie and Freddie reserve the right to return loans that they discover to be fraudulent.

On Monday, Fannie Mae posted $29 billion loss in the third quarter as it took a massive tax-related charge. Fannie Mae said it may have to tap the government's for help in the coming months.

Both Fannie and Freddie have changed their accounting for their deferred-tax assets, which can emerge from operating losses, and can be used to reduce future tax expenses. Companies must be able to show they will be profitable if they intend to use the tax assets for earnings in later periods.

The companies' new chief executives, Freddie Mac's David Moffett and Fannie Mae's Herbert Allison, are scheduled to testify on Capitol Hill next Thursday. The House Oversight and Government Reform Committee is examining the causes of the government takeover.

Both companies have been asked to turn over a long list of documents and e-mail messages concerning the risks the companies took in their mortgage investments, accounting, and compensation for the companies' former CEOs.

holy bailout batman

Well boo hoo.............

Former Lehman Brothers CEO Dick Fuld was under oath Monday when he was grilled on Capitol Hill about his role in the current financial meltdown. But if Members really want to understand the credit mania, they should also call Chris Dodd.


AP
Senate Banking Committee Chairman Chris Dodd, (D., Conn.).
The Connecticut Senator has been out front denouncing the "companies that form the foundation of our financial markets," for "their insatiable appetite for risk." He has also decried "reckless, careless and sometimes unscrupulous actors in the mortgage lending industry" and he has proclaimed that "American taxpayers deserve to know how we arrived at this moment." To that end, we propose he take the stand -- under oath.

Former Countrywide Financial loan officer Robert Feinberg says Mr. Dodd knowingly saved thousands of dollars on his refinancing of two properties in 2003 as part of a special program the California mortgage company had for the influential. He also says he has internal company documents that prove Mr. Dodd knew he was getting preferential treatment as a friend of Angelo Mozilo, Countrywide's then-CEO.

That a "Friends of Angelo" program existed is not in dispute. It was crucial to the boom that Countrywide enjoyed before its fortunes turned. While most of the company was aggressively lending to risky borrowers and off-loading those mortgages in bulk to Fannie Mae and Freddie Mac, Mr. Feinberg's department was charged with making sure those who could influence Fannie and Freddie's appetite for risk were sufficiently buttered up. As a Banking Committee bigshot, Mr. Dodd was perfectly placed to be buttered.

A Friend Indeed
Mortgage VIPs 06/25/2008 – Sweetheart deals are just a phone call away.Angelo's Angel 06/19/2008 – The senate bailout for Countrywide needs more scrutiny.Congress and the Countrywide Scandal 06/18/2008 – Some senators want a bailout for big political donors. What a surprise.Beltwaywide Financial 06/16/2008 – The new ARMs: Angelo-rated mortgages for senators.In response to the charge that he knew he was getting favors, Mr. Dodd at first issued a strong denial: "This suggestion is outrageous and contrary to my entire career in public service. When my wife and I refinanced our loans in 2003, we did not seek or expect any favorable treatment. Just like millions of other Americans, we shopped around and received competitive rates." Less than a week later he acknowledged he was part of Countrywide's VIP program but claimed he thought it was "more of a courtesy."

Mr. Feinberg, who oversaw "Friends of Angelo" from 2000 to 2004, begs to differ. He told us that as the loan officer in charge he was supposed to make sure that the "VIP" clients knew at every step of the process that they were getting a special deal because they were "Friends of Angelo."

"People are referred into that department as 'very important people.' You're told that your loan is priced from Angelo. As the 'Friends of Angelo department,' [the department] has to give them a sense of importance and explain the reduction of fees and the rate as a result of being a 'Friend of Angelo,'" he says. According to a report by Dan Golden in Condé Nast Portfolio in August, other VIPs included Senator Kent Conrad. Mr. Golden reported that "Countrywide also offered special discounts to congressional staffers involved in housing issues."

As to Mr. Dodd, Mr. Feinberg says he spoke to the Senator once or twice and mostly to his wife and that like other FOAs Mr. Dodd got "a float down," which means that even after he had a preferred rate, when the prevailing rate dropped just before the closing, his rate was reduced again. Regular borrowers would pay extra for a last-minute adjustment, but not FOAs. "They were aware of it because they were notified and when they went to the closing they would see it," Mr. Feinberg says, adding that he "always let people in the program know that they were getting a very good deal because they were 'Friends of Angelo.'" All of this matters because Mr. Dodd was one of those encouraging Fan and Fred to plunge into "affordable housing" loans made by companies like Countrywide.

One indicator of his influence is the $165,400 in campaign contributions -- more than to any other politician -- that Fan and Fred have given him since 1989, according to the Center for Responsive Politics. These contributions are legal. But favors like those Mr. Dodd is alleged to have received may not be. Mr. Feinberg says he went public with his story because when he heard Senator Dodd on TV talking about predatory lending, he felt it was "hypocritical" and he says, "I just thought, 'This is wrong.'"

Mr. Dodd hasn't yet released his copies of the mortgage documents, though he promised to do so more than two months ago. His office told us this week they'd get back to us on that. Meanwhile, presumably the Justice Department can have Mr. Feinberg's Countrywide

http://online.wsj.com/article/SB122360116724221681.html

On the October 8 broadcast of his nationally syndicated radio show, host Neal Boortz baselessly suggested that Rep. Barney Frank (D-MA), whom he referred to as a "scoundrel," allowed his relationship in the 1990s with Herb Moses, a Fannie Mae official at the time, to improperly influence his conduct as a member of the House Financial Services Committee, which was responsible for oversight of Fannie Mae. Boortz claimed that Frank "was protecting Fannie Mae for about seven or eight years in the 1990s because his lover, his boyfriend was working for Fannie Mae, pushing out these subprime mortgage packages. So, Barney Frank -- Barney Frank's in the Congress of the United States protecting Fannie Mae. His boyfriend is at Fannie Mae pushing out these subprime mortgages. They get home at night, and in between boxing tonsils and swapping spit, the boyfriend said, 'Thank you, Barney, for saving my job.' " Boortz later said, "[I]f there is a scoundrel in this housing crisis, it would be Barney Frank, whose boyfriend, whose lover was working with Fannie Mae, pushing out these subprime mortgages while Barney Frank was defending Fannie Mae in the Congress of the United States." Boortz provided no evidence to support his suggestion that Frank allowed his personal ties to Moses to affect his behavior on the Financial Services Committee. In fact, Frank repeatedly took action over the years, including when Moses was at Fannie Mae, to strengthen oversight over the corporation.

Boortz's attack echoed a reported strategy on the part of Republicans to try to deflect blame for the financial crisis onto Fannie Mae and Freddie Mac, the Community Reinvestment Act, and proponents of the expansion of affordable housing. Newsweek senior editor Daniel Gross wrote in an October 7 Slate commentary:

On the Republican side of Congress, in the right-wing financial media (which is to say the financial media), and in certain parts of the op-ed-o-sphere, there's a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. The CRA, which was amended in the 1990s and this decade, requires banks -- which had a long, distinguished history of not making loans to minorities -- to make more efforts to do so.

Media Matters for America has rebutted attacks on the CRA, noting that a large percentage of subprime mortgages were not made under the CRA, and noting comments made by Janet Yellen, president and CEO of the Federal Reserve Bank of San Francisco, in a March speech in which she said that "studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households" [emphasis added]. Media Matters has also noted evidence showing that Fannie Mae was not a leader, but a follower, in the subprime lending market.

But most important, undermining Boortz's baseless charge are actions Frank has taken over the years to strengthen oversight of Fannie and Freddie. In the early 1990s, when Democrats held the majority in Congress before the Republican takeover in 1995, Frank supported bills to increase regulation of Fannie Mae and create a government regulatory agency that would supervise and have authority over some aspects of the company in 1991 and 1992. Moses was employed by Fannie Mae at that time. Moreover, in 2005, when Frank was the ranking Democrat on the House Financial Services Committee, he worked with committee chairman Rep. Michael Oxley (R-OH) on the Federal Housing Finance Reform Act of 2005, which would have established the Federal Housing Finance Agency (FHFA) to oversee the activities of Fannie Mae and Freddie Mac. After voting for the bill in committee, Frank voted against final passage of the bill on the House floor, stating that he was doing so because an amendment to the bill on the House floor imposed restrictions on the kinds of nonprofit organizations that could receive funding under the bill.

http://mediamatters.org/items/200810100004

From the October 8 edition of Cox Radio Syndication's The Neal Boortz Show:

BOORTZ: You know, now, who is one of the biggest culprits in our financial crisis today? It's Barney Frank. Barney Frank, who for 18 years or more has been working overtime to protect Fannie Mae. He was protecting Fannie Mae for about seven or eight years in the 1990s because his lover, his boyfriend was working for Fannie Mae, pushing out these subprime mortgage packages.

So, Barney Frank -- Barney Frank's in the Congress of the United States protecting Fannie Mae. His boyfriend is at Fannie Mae pushing out these subprime mortgages. They get home at night, and in between boxing tonsils and swapping spit, the boyfriend said, "Thank you, Barney, for saving my job." "No problem."

[...]

BOORTZ: Representative Barney Frank, who has been at the middle of the problems out there -- been at the middle with the problems with the subprime mortgages and making all of these loans to people who could not afford them -- now says that Republican criticism of Democrats over the housing crisis is racially motivated.

The last refuge of scoundrels. And if there is a scoundrel in this housing crisis, it would be Barney Frank, whose boyfriend, whose lover was working with Fannie Mae, pushing out these subprime mortgages while Barney Frank was defending Fannie Mae in the Congress of the United States. Barney Frank feels really vulnerable right now because he knows the American people are starting to understand his complicity. They're starting to understand. So he goes to that last refuge. "Yup, the Republicans are guilty of racism for attacking me and my Democrat friends on the nation's housing crisis because a lot of these subprime mortgages were made to black people." Isn't that nice?

Schumer Bill Would Lift GSE Portfolio Caps
Congress and the Administration may be headed for a clash on yet another front - the size of Freddie Mac and Fannie Mae's owned portfolios.

On Monday Senator Charles Schumer (D-NY) introduced legislation that would provide about $72.5 billion to refinance mortgages for borrowers whose loans have or are about to reset to higher rates. The bill would also allow Freddie and Fannie to buy more mortgages in order to relieve in part the credit crunch which is preventing cash-strapped borrowers from refinancing.


The bill lifts the present cap on Freddie Mac and Fannie Mae's mortgage portfolios by 10 percent which the Senator says will allow the two government sponsored enterprises (GSEs) to pump about $145 billion into new lending. The bill would also permit the companies to purchase so-called "jumbo" mortgages, those with a value over $417,000 which would allow Freddie and Fannie to assist borrowers in areas of the county with more expensive housing.

The Bush Administration and James Lockhart, the head of the Office of Federal Housing Enterprise Oversight (OFHEO) which regulates the two GSEs have rejected suggestions that the two corporations should be allowed to purchase and hold more mortgages. Both the President and Director Lockhart in similar statement alluding to accounting irregularities discovered three years ago suggested that the GSEs should exhibit more fiscal oversight before they were allowed to increase the sizes of their respective portfolios. Both GSEs have already petitioned OFHEO asking for what would amount to an emergency increase in their portfolio limits.

Under Schumer's legislation the increases of portfolio caps and loan limits would expire after one year.

http://www.mortgagenewsdaily.com/911...humer_Bill.asp

Media Ignoring Barney Frank’s Conflict Of Interest On Fannie Mae/Freddie Mac
By Rob on October 6, 2008

I must have missed this as it broke on Friday, but it turns out that not only was Democrat Rep. Barney Frank working to stonewall any attempt to reform Fannie Mae and Freddie Mac in Congress, he was also taking political action that was directly beneficial to his lover Herb Moses who worked for Fannie Mae.

Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.

So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank’s relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.

“It’s absolutely a conflict,” said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane? “If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane,” added Gainor, a T. Boone Pickens Fellow. “But everybody wants to avoid it because he’s gay. It’s the quintessential double standard.”

A top GOP House aide agreed.

“C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?” the aide told FOX News. “No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D?

http://sayanythingblog.com/entry/med...e_freddie_mac/

Another Dem in the pockets of Fannie and Freddie

Maxine Waters Caught Lying About Fannie Mae Ties on 'Real Time'

Maxine Waters, a key Democrat congresswoman that has been implicated in blocking government oversight that could have prevented the current financial crisis, was caught lying Friday evening about her connection to failed lenders Fannie Mae and Freddie Mac.

During the panel discussion of HBO's "Real Time," Waters was challenged by the Wall Street Journal's Stephen Moore about the campaign contributions she's received from these government sponsored enterprises.

Despite what public records clearly show, Waters denied she had ever taken any money from these two companies (video embedded right courtesy our dear friend MsUnderestimated):

Story Continues Below Ad ↓

BILL MAHER, HOST: When John McCain was at the Saddleback Ranch, I mean Church...I always call it a ranch; and he was asked a question, they both were, by Rick Warren, you know, "what do you do about evil?" and he said DEFEAT IT!

STEPHEN MOORE, WALL STREET JOURNAL: That's a good answer!

MAHER: Right. But it might take him two terms. And Obama said...he had a very different answer. He said "Be humble about it." Because he was trying to say, you know, ‘evil, it's not something you can really defeat because there's no devils out there.' Sorry.

{audience laughter**

MAHER: The devil is within us, you know. And when I see what went on on Wall Street the last eight years, that's evil to me. That's the evil within us.

{raucous applause**

MAHER: You don't see that?

MOORE: I do!

MAHER: What about...I mean, don't you think they need regulation? People say ‘well, they don't need regulation because, you know what, it was just because they got greedy!' Of course, they went to work on Wall Street! Who goes to work on Wall Street except greedy *******s?

MOORE: Is there something wrong with wanting to make money?

MAHER: No, but you have to regulate it! That's where the problem is; that there was no regulation.

MOORE: Well, let's talk about regulation. One of the insti...the biggest institutions that's failed this year was Fannie Mae and Freddie Mac. This is an institution that your friends, the Democrats... in fact you, Congresswoman, did not want to regulate...

REP. MAXINE WATERS (D-CA): ...I believed...I believed...

MOORE: ...you said it wasn't broke, you said it wasn't broke, you said it wasn't broke five years ago at a Congressional hearing, and you took $15,000 of campaign contributions from Fannie and Freddie.

WATERS: ...no I didn't.

MOORE: Yeah, you did, it's in the Senate (inaudible)...

WATERS: No it's not.

{inaudible cross-talk**

MOORE: You took money from the PAC.

WATERS: Wait just a minute, just a minute...

MOORE: ... and so did Barney Frank, and so did Chris Dodd.

WATERS: That is a lie and I challenge you...

MOORE: Okay.

WATERS: ...to find $15,000 that I took from Fannie PAC...

Okay, Congresswoman, I'll take that challenge, for the Center for Responsive Politics' OpenSecrets.org reported the following on September 11:

When the federal government announced two months ago that it would prop up mortgage buyers Fannie Mae and Freddie Mac, CRP looked at how much money members of Congress had collected since 1989 from the companies. On Sunday the government completely took over the two government-sponsored enterprises, and we've returned to our data to bring you the updates, this time providing a list of all 354 lawmakers who have gotten money from Fannie Mae and Freddie Mac (in July we posted the top 25). These totals are based on data released electronically from the FEC on Sept. 2 and include contributions to lawmakers' leadership PACs and candidate committees from the floundering companies' PACs and employees. Current members of Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that. This week we also wrote about how much money lawmakers had invested of their own money in the companies last year--a total of up to $1.7 million. [...]

Name Office State Party Grand Total Total from PACs Total from Individuals
Waters, Maxine H CA D $17,800 $15,000 $2,800
As such, Moore was right, and Waters was lying through her teeth.

For those interested, during a 2004 Congressional hearing about Fannie Mae and Freddie Mac, Waters said:



Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines.

With this in mind, as odd as it might seem, for the second week in a row, a panelist on "Real Time" actually divulged information about Democrat involvement in the current financial crisis that most mainstream media outlets continue to hide from the public. With stocks cratering, and a serious economic contraction looming, one has to wonder when America's "serious" media will follow suit and expose the truth behind the current crisis.

After all, in 2006, the word "macaca" and solicitous e-mail messages from a little-known congressman were headline news for weeks, and were largely responsible for the Democrats taking back the Senate and the House. Of course, all this attention came despite the misstatement by then Sen. George Allen (R-Virg.) and the behavior of Rep. Mark Foley (R-Fl.) no way threatening the finances of Americans or our very economy.

There is absolutely no question that if Maxine Waters was a Republican that had blocked GSE reform this decade, and was caught lying on national television about campaign contributions from Fannie and Freddie, this would be headline and front-page news for days with full-scale coverage of how she and others in her Party were responsible for the current calamity.

Yet, it seems almost a metaphysical certitude that with about three weeks to go before Election Day, the Obama-loving media are going to keep this matter buried long enough to get their candidate in the White House.

Frankly, I'm not sure what Americans should be more concerned about: falling stocks and a looming recession or Democrats being completely in control of the nation's major press outlets.

Both are keeping this associate editor up at night; how 'bout you?

—Noel Sheppard is the Associate Editor of NewsBusters.

http://newsbusters.org/blogs/noel-sh...ties-real-time

This financial crisis lies right in the laps of the Democrats.