The Rest of the Meltdown Story

By Neal Boortz

What in the world is going on here? You've seen the headlines, and you heard of the failures and buyouts. Lehman Brothers, Bear Stearns, Merrill Lynch, AIG; all big names and all in big trouble. Then those mysterious quasi-government agencies with names like Freddie and Fannie become wards of the state and you learn that you and your fellow taxpayers are potentially on the hook for tens of billions of dollars. At the end of the week Washington Mutual is looking for a buyer, and you start to wonder about the security of your own bank and your own savings account. Let's change that ad copy to WaMu -- boo hoo.

Somewhere in the back of your mind you understand that this is all tied somehow to bad mortgages. If you start reading a bit further to enhance your understanding you run into terms like Mortgage Backed Securities (MBS) and credit-default swaps, whatever in the world those are. Read further and you find out that a combination of falling home prices and mortgage defaults have put many investment banks and other financial institutions in deep puddin'. All this reading, all this watching the talking heads on TV, and you still don't really know what in the world is going on here.

Fear not. I'm here to help. I know . I'm just another talk show host; but the fact is that when the stage was being set for the problems we're seeing today I was making most of my money as a real estate lawyer .. closing loans for some of the very institutions that are the tank today. This rather unique combination - closing lawyer and radio talk show host - gave me a front row seat to the politicization of mortgage loans that led us to today's headlines.

OK .. so we all know that a lot of really bad real estate loans were made. The political class would sure love for us to believe that the blame here rests squarely on "greedy" (try to define that word) mortgage brokers and lenders. The truth is that most of the blame rests on political meddling in the credit decisions of these mortgage lenders.

Twenty years ago the buzz-word in the media was "redlining." Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. There I was closing these loans in the afternoons, and in the mornings offering a counter-argument on the radio to these absurd "redlining" claims. Frankly, the claims that evil mortgage lenders were systematically denying loans to blacks and other minorities were a lot sexier on the radio than my claims that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination.

Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast .. to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank's efforts to grow if that bank didn't make loans to unqualified borrowers. Enter, stage left, the "subprime" mortgage. These lenders knew that a very high percentage of these loans would turn to garbage - but it was a price that had to be paid if the bank was to expand and grow. We should note that among the community groups browbeating banks into making these bad loans was an outfit called ACORN. There is one certain presidential candidate that did a lot of community organizing for ACORN. I won't mention his name so as to avoid politicizing this column.

These garbage loans to unqualified borrowers were then bundled up and sold. The expectation was that the loans would be eventually paid off when rising home values led some borrowers to access their equity through re-financing and others to sell and move on up the ladder. Oops.

Right now this crisis is being sold to the American public by the left as evidence the failure of the free market and capitalism. Not so. What we're seeing is the inevitable result of political interference in free market economics. Acme bank didn't want to loan money to Joe Homebuyer because Joe had a spotty job history, owed too much money on his credit cards, and wasn't all that good at making payments on time. The politicians told Acme Bank to figure out a way to make that loan, because, after all, Joe is a bona-fide minority-American, or forget about opening that new branch office on the Southside. The loan was made under politicial pressure; the loan, with millions like it, failed - and now we are left to enjoy today's headlines.

So . why aren't you reading the whole story in the mainstream media? Come on, are you kidding me? Do you really expect the media to blame this mess on deadbeat borrowers and political interference in the free market when it is so easy to put the blame on greedy lenders and evil capitalists? Remember . there's an election going on. One candidate is decidedly anti-capitalist. Do the math.

Source. An article at IBD makes similar points to the above

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Ugly old Leftist baggage slimes Sarah Palin

You can see a recent image of her here. If you read anything that tears some woman to shreds, you can almost always be sure that it is the work of another woman. And an ugly old woman with nothing left but her tongue will often loathe a younger attractive woman. What the old baggage below says is nothing but abuse and unsubstantiated assertions so I think it is reasonable not to discuss her hate-filled rant but rather to point to the motives behind it and give a bit of contempt back.

The Canadian Broadcasting Corporation is reviewing complaints from both Americans and Canadians about a Web site columnist who recently described Sarah Palin's supporters as "white trash," compared the vice presidential candidate to a "porn actress" and called her daughter's boyfriend a "redneck" and "ratboy."

In the CBC story, Mallick wrote that John McCain's running mate "added nothing to the ticket that the Republicans didn't already have sewn up, the white trash vote." She proceeded to write that the Alaska governor "has a toned-down version of the porn actress look favored by this decade's woman, the overtreated hair, puffy lips and permanently alarmed expression."

She also questioned why the Palins were allowing Levi Johnston - 17-year-old Bristol Palin's boyfriend and father of her unborn baby - into the family. "What normal father would want Levi `I'm a f--n' redneck' Johnson prodding his daughter?" Mallick asked. "I know that I have an attachment to children that verges on the irrational, but why don't the Palins? I'm not the one preaching homespun values but I'd destroy that ratboy before I'd let him get within scenting range of my daughter again, and so would you. . Turn your guns on Levi, ma'am."....

Mallick also wrote on the CBC Web site that Republican men, whom she called "sexual inadequates," must think that women would vote for Palin just because she's a woman.

More here. (Amusing that they use a very old picture of the baggage there)

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ELSEWHERE

The Left loves failure (1): "How does a general responsible for a failed strategy in a major war redeem himself? By talking to Bob Woodward of the Washington Post, who is notorious for rewarding his sources with sympathetic treatment. That's why Gen. George Casey, who obviously spent long hours with Woodward, gets an oddly favorable portrayal for defending a losing strategy in Iraq to the bitter end. Woodward writes as though President Bush did something wrong in executing an end-run around Casey and the recalcitrant brass of the Joint Chiefs to find and implement a strategy that might work in Iraq. That strategy was, of course, the surge. The facts make it plain--notwithstanding Woodward's tone--that Bush made a decision of great courage and independence when many at the Pentagon valued getting out of Iraq over winning

The Left loves failure (2):The cast of characters at political conventions is ever changing, except for one family that always appears wherever the Democrats do--the Joads. Their ramshackle jalopy, coated with dust, winds through their speeches, reminding us that it is always evening in America. In years when the economy is booming, it's a struggle to get the old junkheap moving, but the Democrats always manage it; then, their trope is that there are two Americas, one for the heartless rich, the other for the battered sons of toil. Mario Cuomo was the greatest bard of this argument, though John Edwards more recently made it his own until a different issue put him out of commission. When the economy is problematic, as it is now--oil prices sinking but still sky-high; unemployment not sky-high, but rising--then the Joads appear in all their funky glory."

Sad-sack Woody backs Obama: "US filmmaker Woody Allen, best known for such comedy classics as "Annie Hall," says it will be no laughing matter if Barack Obama fails to win the race for the White House. "It would be a disgrace and a humiliation if Barack Obama does not win," he told Spanish journalists at the ongoing 56th San Sebastian film festival, where his latest film "Vicky Cristina Barcelona" is being screened. "It would be a very, very terrible thing for the United States in many, many ways," he said. Democratic hopeful Obama, Allen said, is "so much better" than Republican rival John McCain, and "represents a huge step upward from (the) incompetence and misjudgement" of the Bush administration. "It would be a terrible thing if the American public was not moved to vote for him, that they actually preferred more of the same."

Leftist "tolerance" again: "In ultra-liberal Austin, TX, McCain supporters have a problem with their lawn signs being vandalized. News Channel 8 reports: "The gate to Hili Geck's house was once flanked by three big John McCain signs. Most others in her neighborhood have Obama signs. Voting records show Geck's precinct is 70 percent Democratic. Still, she's never felt unwelcomed until now. Geck said she came home Monday to find her signs missing and her tires slashed. "I'm not scared," she said. "I'm going to put my signs back because I think that's the most important thing we have in America."

For more postings from me, see OBAMA WATCH (2), TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena

List of backup or "mirror" sites here or here -- for readers in China or for everyone when blogspot is "down" or failing to update. Email me here (Hotmail address). My Home Pages are here or here or here

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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)

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