Wednesday, March 19
Spiking Spitzer & Homeownership "Countrywide": Bushes Abet Elite Land Scams
On 14 March, Greg Palast--a bestselling American author and journalist for the BBC and UK Guardian because corporate-friendly US news editors refuse to touch his incendiary investigations--told Air America radio listeners essentially the same thing, but with a very topical twist:
Newly resigned New York Governor Eliot Spitzer's link to a prostitution ring was effectively a judicial hit on the one man "who stood in the way of [the] creepy little...bankers’" predatory lending via sub-prime mortgage loans.
Here is Palast's assessment of why potential "party-popper" Spitzer had to be taken out to protect the banking industry's ethnic/race-based home mortgage scam just as US Treasury was giving it $200 billion in taxpayer bailout money:
Here’s how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 monthly payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain’t worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the “discount” they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. The Grinnings move into their Toyota.Palast credits Spitzer's 14 February incendiary Washington Post article as the Bush Justice Department's motivation for its propitious timing in targeting the governor. According to Truthout.org, his article appeared "the day after New York Gov. Eliot Spitzer allegedly engaged the services of a call girl at the Mayflower Hotel in Washington, DC."
Now, what kind of American is ‘sub-prime.’ Guess. No peeking. Here’s a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren’t stupid – they had no choice. They were ‘steered’ as it’s called in the mortgage sharking business.
‘Steering,’ sub-prime loans with usurious kickers, fake inducements to over-borrow, called ‘fraudulent conveyance’ or ‘predatory lending’ under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.
But when the Bush regime took over, Countrywide and its banking brethren were told to party hearty – it was OK now to steer’m, fake’m, charge’m and take’m.
But there was this annoying party-pooper. The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.
Instead of regulating the banks that had run amok, Bush’s regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of “federal pre-emption,” Bush-bots ordered the states to NOT enforce their consumer protection laws.
Indeed, the feds actually filed a lawsuit to block Spitzer’s investigation of ugly racial mortgage steering. Bush’s banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws. [emphasis added]
Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup’s Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called “securitization.”
What that means is that they took a bunch of junk mortgages, like the Grinning’s, loans about to go down the toilet and re-packaged them into “tranches” of bonds which were stamped “AAA” - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).
When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide’s top man, Angelo Mozilo, will ‘earn’ a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars – he pulled in from 1998 through 2007.
But there were rumblings that the party would soon be over. Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide’s stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.
Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That’s Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.
The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the public treasure – and got to keep the Grinning’s house. There was no ‘quid’ of a foreclosure moratorium for the ‘pro quo’ of public bailout. Not one family was saved – but not one banker was left behind.
Every mortgage sharking operation shot up in value. Mozilo’s Countrywide stock rose 17% in one day. The Citi sheiks saw their company’s stock rise $10 billion in an afternoon.
And that very same day the bail-out was decided – what a coinkydink! – the man called, ‘The Sheriff of Wall Street’ was cuffed. Spitzer was silenced....
According to Palast
Pfizer's Connecticut Land Grab Snowballs "Countrywide"
It was the night of February 13  when Spitzer made the bone-headed choice to order take-out in his Washington Hotel room. He had just finished signing these words for the Washington Post [buried on page A25] about predatory loans:
“Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.”
Bush, Spitzer said right in the headline, was the"Predator Lenders' Partner in Crime." The President, said Spitzer, was a fugitive from justice. And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.
Spitzer wrote, “When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably.”... read more
There's yet another "land grab" angle that now assumes deeper meaning when juxtaposed beside the Justice Department's tawdry take-down of the pro-homeowner governor from New York: Bush's "eminent domain" executive order signed on the first anniversary of the U.S. Supreme's controversial 2005 Kelo ruling (a 5-4 vote) that broke with the traditional interpretation of the Fifth Amendment's land-taking clause.
The high court's decision now gave governments the right to confiscate private property for commercial development rather than only projects in the public interest, i.e., roads, hospitals, etc. Bush's EO in 2006 allegedly countered the high court's new law that, interestingly, was initiated by Pfizer Pharmaceutical, Inc, a New London, Connecticut-based company.
An Associated Press story, representative of US mainstream media views generally, concluded Bush's executive order "limited" the high court's ruling against "several residents of New London, Conn., who sued the city after officials announced plans to raze their homes for a riverfront hotel, health club and offices."
But some critics pointed out Bush's order was more window-dressing than substantive protection for Middle Americans' private property. Again, according to the AP's June 2006 story
President Bush ordered yesterday [23 June 2006] that federal agencies cannot seize private property except for public projects such as hospitals or roads. The move occurred on the one-year anniversary of a controversial Supreme Court decision that gave local governments broad power to bulldoze people's homes for commercial development.
The majority opinion in the Supreme Court case involving New London, Conn., homeowners limited the homeowners' rights by saying local governments could take private property for economic-development-related projects because the motive was to bring more jobs and tax revenue to a city.
George Mason University property law professor Ilya Somin agrees with Kendall. The legal scholar not only concluded that a raft of state laws ostensibly enacted to protect American property owners a year after the high court's ruling (i.e., Kelo et al. v. New London et al.) failed their intended goal. But Somin also argues Bush's EO
Doug Kendall, executive director of the Community Rights Counsel, which backed the city's right to take the homes in the Connecticut case, said Bush's order is relatively benign precisely because it does not [bar federal funding for any state or local projects in which the land was obtained through eminent domain that...] property rights advocates want.
"This order appears to apply to a null, or virtually null set of government actions," he said. "I'm not aware of any federal government agency that takes property for economic development."
does not in fact bar condemnations that transfer property to other private parties for economic development. Instead, it permits them to continue so long as they are "for the purpose of benefiting the general public and not merely for the purpose of advancing the economic interest of private parties to be given ownership or use of the property taken."In December 2007, Somin updated the Kelo decision from a states' perspective by reviewing Colorado's legislative "Kelo reform" in the context of a recent Colorado supreme court ruling ostensibly in favor of property owners in the state.
Unfortunately, this language validates virtually any economic development condemnation that the feds might want to pursue. Officials can (and do) always claim that the goal of a taking is to benefit "the general public" and not "merely" the new owners. This is not a new pattern, but one that bedeviled takings litigation long before Kelo. Indeed, the New London authorities made such claims in Kelo itself and they were accepted by all nine Supreme Court justices, including the four dissenters, as well as by the Connecticut Supreme Court (including its three dissenters). This despite considerable evidence that the takings were instigated by the Pfizer Corporation, which at the time hoped to benefit from them.
Bush-Styled Amerikan Development Plan
As Tim Sandefur of the Pacific Legal Foundation explains, the [Colorado high court's] decision is a victory for property owners of sorts, but its reasoning is likely to undermine property rights in the long run. [empahsis added] The Court's reasoning was not based on any potential violation of constitutional property rights inherent in transferring private property to another private party for purposes of "economic development," but rather on the theory that private parties such as the developer generally have no right [to] constrain the government's ability to exercise its power of eminent domain as it sees fit. The Court emphasized that state and local governments retain broad authority to condemn property, and that the state "remains empowered to take... property ...and redistribute it in any manner that future circumstances and the public welfare demand."
Well-informed VC readers might wonder why such Kelo-style takings are still occurring [in] Colorado, given that the state recently enacted legislation that was supposedly intended to curb them. The answer is that Colorado is one of numerous states that have enacted flawed post-Kelo "reform" legislation that allows "economic development" takings to continue under other guises even as it purports to ban them. [emphasis added]
Three months after George Bush's eminent domain "trojan horse" in June 2006, Wayne Madsen, author and Washington, DC-based investigative journalist, linked the newly appointed Transportation Secretary (from Texas) to the Bush-backed land takings in eleven states on behalf of Saudi and Chinese investors, citing in particular the Trans-Texas Corridor, the critical leg of the NAFTA Superhighway linking Mexico through Southern Texas to the rest of the US and into Canada for a "North American Union."
George W. Bush's pick for Transportation Secretary represents a major conflict-of-interest designed to spur the construction of the Trans-Texas Corridor -- a project in which Bush and his cronies are heavily invested. Last week, Bush nominated Mary Peters to replace Norman Mineta as Secretary of Transportation...Are you holding your breath for House Democrats--committee chairs like John Conyers (Judiciary) or Henry Waxman (Reform and Oversight)--to provide oversight of this treason against Americans? They now only practice a stylized "politics of collaboration" reminiscent of World War II French Vinchy politicians who abetted Hitler's fascist march across Western Europe.
Peters' commitment to major "infrastructure development" of the nation's highways centers on the development of the North American SuperCorridor (NASCO) highway, of which the Tran-Texas Corridor (TTC) will be a major component. Already, Bush crime syndicate cronies, including interests tied to Texas Governor Rick Perry, are purchasing property along the proposed Texas highway route at cut-rate prices, using "eminent domain" statutes to pay less than what private and commercial property is worth. The money for the massive land grab is coming from Saudi and Chinese sources, according to knowledgeable sources in Texas....
You're better off securing your own inventory of deep-dodo air tanks as the foundation of American life disappears before our very eyes.
Related: In December 2006 Milkhouse Mouse referenced Madsen's news note on Bush family complicity in the land grab in the context of public ignorance of Indiana's I-69 "commerce connector," a direct link to the TCC.
(Rev'd 20 March, 21 March and 23 March 2008)
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