According to lawthug Eric Holder, Citigroup is a reckless criminal enterprise that ruthlessly preyed on helpless little people to such a whopping extent that it required a $7 billion settlement to balance the scales of justice.
This fits into the narrative that clearly the government was not at fault in our financial meltdown (well, except Bush and the Bush administration, which are Republican and therefore can be blamed for everything that goes wrong). Government is inherently and intrinsically good as long as Obama is running it rather than a Republican president, you see. And so we can’t blame the Community Reinvestment Act – which forced lending institutions to make loans to people any fool knew would not be able to make their payments. Even though it clearly led to a six-plus TRILLION dollar balloon that HAD to burst as Democrats used the CRA as a means to reward their supporters at the skyrocketing cost of everyone else:
And which Republicans very clearly WARNED would burst:
Nope. It’s Bush’s fault, no matter how much to blame Democrats clearly WERE.
We can’t blame Barack Obama for his own particularly egregious role in those forced loans to high-risk individuals. We can’t blame Democrats for forcing “adherence to that act [which] led to riskier lending by banks.” We can’t blame Fannie Mae and Freddie Mac – which came up with the incredibly risky strategy as I document in quite a few articles such as this one:
Why do I mention the Government Supported Enterprises (GSEs) Fannie Mae and Freddie Mac? Because they were at the very heart of the mortgage meltdown.
The LA Times writes on May 31, 1999 that:
Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more. . . .
LaVaughn M. Henry, Ph.D. Director, U.S. Economic Analysis The PMI Group, Inc. December 9, 2008, pointed out:
The Role of the GSEs is to provide liquidity and stability to the U.S. housing and mortgage markets. Step 1 Banks lend money to Households to purchase and refinance home mortgages Step 2 The GSEs purchase these mortgage from the banks Step 3 GSEs bundle the mortgages into mortgage-backed securities Step 4 GSEs sell mortgage-backed and debt securities to domestic and international capital investors Step 5 Investors pay GSEs for purchase of debt and securities Step 6 GSEs return funds to banks to lend out again for the issuance of new mortgage loans.
It was steps 3-5 that messed us up. Fannie and Freddie bought mortgages – including many mortgages that poor and minority homeowners couldn’t begin to afford under the mandate of the Community Reinvestment Act – bundled them such that no one could assess their risk, and then sold them to private companies such as Bear Stearns and Lehman Brothers. Fannie and Freddie were exempt from SEC [Securities and Exchange Commission] regulations. The GSEs could bundle up mortgages, which would then be rated AAA, with no requirement to make clear what was in the bundle. Private companies believed that the bundled securities were guaranteed, since they were essentially being sold by the federal government.
But there were many who predicted that this system – created and maintained by Democrats – could explode.
From the New York Times in September 30, 1999:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.“
”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.” . . .
And that is precisely what happened. There was a downturn (and there will ALWAYS be downturns, won’t there?), and Fannie and Freddie were so leveraged that they collapsed and caused the collapse of the entire industry. Financial experts anxiously pointed out that a decline of only 1.3% would bankrupt Fannie and Freddie because they were leveraged to the tune of 60%? to 78%.
Democrats were the priests and acolytes of the GSE system. They protected it, and they were the ones who pressed all the buttons and pulled all the levers.
Keven Hasset concludes an article titled, “How the Democrats Created the Financial Crisis“, concludes by saying:
Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.
Watch this video showing how George Bush and John McCain repeatedly warned of the economic collapse (length=4 min):
Watch this video of Democrats protecting and covering for Fannie Mae (length=8 min):
Here’s a video entitled “Burning Down the House: What Caused Our Economic Crisis?” (length=11 min)
And then we find that Barack Obama was in bed with Fannie and Freddie and their shockingly risky policies:
Who really exploded the economy in 2008, liberals or conservatives? Who do you think? The liberal mainstream media allowed Democrats to blame George Bush simply because he was president at the time, never mentioning that the Democrats who controlled both the House and the Senate relentlessly opposed everything Bush tried to do; and it allowed Democrats to not have to account for the fact that they’d been in complete control of both the House and the Senate. But remember that the economy went from outstanding to collapsed during the two years (2006-2008) that the Congress was under Nancy Pelosi and Harry Reid. The unemployment rate was 4.4% when Republicans last ran Congress. What is it now, three years of Nancy Pelosi and Harry Reid later?
Few people understand how huge Fannie and Freddie are, or how deeply burrowed they are in the mortgage industry. But let me put it to you this way: the federal government now underwrites 9 out of 10 residential mortgages.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
But he was ignored.
When George Bush first tried to regulate an already out-of-control liberal bastion of Fannie and Freddie, Barney Frank led the united Democrat opposition and said:
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
And just before Fannie and Freddie collapsed and brought down the entire housing mortgage industry with it creating the economic meltdown, Barney Frank – continuing to stop any regulation of Fannie and Freddie – said this:
REP. BARNEY FRANK, D-MASS.: I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under. They’re not the best investments these days from the long-term standpoint going back. I think they are in good shape going forward.
Fannie Mae and Freddie Mac went completely bankrupt shortly after Barney Frank testified that they were “fundamentally sound,” and had to be bailed out by the government. It had been Fannie and Freddie which had the sole authority to buy mortgages, bundle them into the mortgage-backed securities which ultimately exploded, and sell those securities to private companies (as I have already shown). Just as it was Fannie and Freddie which had been the seller of subprime loans.
Three top Democrats, Franklin Raines, Jim Johnson and Jamie Gorelick “fundamentally transformed” Fannie Mae into a liberal Democrat exploitation machine and made MILLIONS in illegitimate bonuses cooking the books.
I could go on and on. But one thing is crystal clear to anyone who wants to know the truth and who isn’t demon-possessed: Democrats forced banks to do something incredibly stupid, and banks did the very best they could to operate in a Kafkaesque system that Democrats created and cynically exploited and Bush tried seventeen times to stop.
I mock you Democrats now, because every single ONE of you is a future permanent resident of the fire of hell. You demonize Republicans as “obstructionists” and “terrorists” for preventing Obama and Democrats from running roughshod over America. But when Bush was president you OBSTRUCTED him at virtually every damn turn. You fascist hypocrites without shame.
Let me get back to Jack Lew and our Fascist-in-Chief Obama.
Citigroup gets this massive fine. They were criminals, Obama and Holder say.
So why is the man who ran the unit that performed all the criminal actions our Treasury Secretary???
That’s the question the Wall Street Journal is asking:
The Citigroup ATM
Jack Lew and Tim Geithner escape mention in the bank settlement.
The Wall Street Journal, July 14, 2014 7:37 p.m. ET
The Department of Justice isn’t known for a sense of humor. But on Monday it announced a civil settlement with Citigroup over failed mortgage investments that covers almost exactly the period when current Treasury Secretary Jack Lew oversaw divisions at Citi that presided over failed mortgage investments. Now, that’s funny.
Though Justice, five states and the FDIC are prying $7 billion from the bank for allegedly misleading investors, there’s no mention in the settlement of clawing back even a nickel of Mr. Lew’s compensation. We also see no sanction for former Treasury Secretary Timothy Geithner, who allowed Citi to build colossal mortgage risks outside its balance sheet while overseeing the bank as president of the New York Federal Reserve.
The settlement says Citi’s alleged misdeeds began in 2006, the year Mr. Lew joined the bank, and the agreement covers conduct “prior to January 1, 2009.” That was shortly before Mr. Lew left to work for President Obama and two weeks before Mr. Lew received $944,518 from Citi in “salary, payout for vested restricted stock,” and “discretionary cash compensation for work performed in 2008,” according to a 2010 federal disclosure report. That was also the year Citi began receiving taxpayer bailouts of $45 billion in cash, plus hundreds of billions more in taxpayer guarantees.
While Attorney General Eric Holder is forgiving toward his Obama cabinet colleagues, he seems to believe that some housing transactions can never be forgiven. The $7 billion settlement includes the same collateralized debt obligation for which the bank already agreed to pay $285 million in a settlement with the Securities and Exchange Commission. The Justice settlement also includes a long list of potential charges not covered by the agreement, so prosecutors can continue to raid the Citi ATM.
Citi offers in return what looks like a blanket agreement not to sue the government over any aspect of the case, and waives its right to defend itself “based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action.” We hold no brief for Citi, which has been rescued three times by the feds. But what kind of government demands the right to exact repeated punishments for the same offense?
The bank’s real punishment should have been failure, as former FDIC Chairman Sheila Bair and we argued at the time. Instead, the regulators kept Citi alive with taxpayer money far beyond what it provided most other banks as part of the Troubled Asset Relief Program. Keeping it alive means they can now use Citi as a political target when it’s convenient to claim they’re tough on banks.
And speaking of that $7 billion, good luck finding a justification for it in the settlement agreement. The number seems to have been pulled out of thin air since it’s unrelated to Citi’s mortgage-securities market share or any other metric we can see beyond having media impact.
If this sounds cynical, readers should consult the Justice Department’s own leaks to the press about how the Citi deal went down. Last month the feds were prepared to bring charges against the bank, but the necessities of public relations intervened.
According to the Journal, “News had leaked that afternoon, June 17, that the U.S. had captured Ahmed Abu Khatallah, a key suspect in the attacks on the American consulate in Benghazi in 2012. Justice Department officials didn’t want the announcement of the suit against Citigroup—and its accompanying litany of alleged misdeeds related to mortgage-backed securities—to be overshadowed by questions about the Benghazi suspect and U.S. policy on detainees. Citigroup, which didn’t want to raise its offer again and had been preparing to be sued, never again heard the threat of a suit.”
This week’s settlement includes $4 billion for the Treasury, roughly $500 million for the states and FDIC, and $2.5 billion for mortgage borrowers. That last category has become a fixture of recent government mortgage settlements, even though the premise of this case involves harm done to bond investors, not mortgage borrowers.
But the Obama Administration’s references to the needs of Benghazi PR remind us that it could be worse. At least Mr. Holder isn’t blaming the Geithner and Lew failures on a video.
We now live in a time when a fascist Hitler-style leader simply “invents” something he calls “justice.” Whose to blame and who is absolved? It’s no different than Stalin randomly signing death warrants for the execution of “criminals” whose “crime” was whatever the hell he happened to say it was. All you have to do is substitute the word “tea party” for “kulak” to get the essence of Stalinist thug Obama.
Consider that Citigroup was SEVENTH on the donor list for the Obama campaign. Oh, the top people – the Citi execs like Jack Lew who GAVE Obama that money that enabled him to forever afterward screw up our political system by being the first candidate to bypass the federal matching funds system so he could raise over a BILLION DOLLARS from the filthiest rich – got off the hook and got their huge bonuses for doing their dirty work for liberals. Jack Lew was the chief operating officer of the Citigroup unit that profited from the loans that Obama is now saying are evil and suing Citigroup for making. He is as much to blame for those loans as any human being dead or alive and he’s not only off scott free but he’s Obama’s damn TREASURY SECRETARY!!! And of course if God – oops, I mean liberal secular humanist Government – giveth in the form of bailouts it can surely taketh away. Just like it’s takething and takething from US now to giveth to illegals who everyone knows will soon be voting Democrat.
Only a Democrat can be rat bastard enough to assert that a company can somehow do $7 BILLION worth of wrong but the man who led the wrongdoing should be lavishly rewarded so long as he’s a loyal-enough Obama stooge.
Jonathon Turley, the nation’s foremost LIBERAL constitutional scholar, testified yesterday that Barack Obama is a clear and present danger to our Constitution. He pointed out “a shifting of the balance of power … in favor of a now dominant Executive Branch” and describes “the rise of a type of uber-presidency. Our system is changing in a dangerous and destabilizing way.”
Meanwhile, Obama thug Hilda Solis is clearly heard on tape pressuring a subordinate – in crystal clear FELONY violation of the Hatch Act – to support the Obama campaign. That’s when you put pressure on somebody who works under you for the government to support a political campaign. It’s a CRIME. Not that violating the Hatch Act is a big deal to Obama or any of his thugs, as Kathleen Sabelius also demonstrated when she did it too.
And at this point, if you do not believe that Barack Obama ORDERED the thugs at his IRS to violate the rights of conservatives by using the tax system as a political weapon to target his enemies, I can only conclude that you are either stupid or demon-possessed or both. Because the pattern of guilt and corruption is simply beyond overwhelming at this point.
This is the most criminally corrupt and fascist administration that has EVER been.