The Crime of the Century (General Motors)

  America, You’ve been had!!!!  When GM went (according to this chart by Tom McMahon with assistance from Larry Kudlow) “bankrupt” the outstanding funded debt of the corporation was $27 Billion.  If you add the portion of the UAW retirement & medical benefit program that was “underfunded” you have another $10 Billion.  Added together this is a total of $37 Billion.  This debt was not really of comparable nature.  The $27 Billion that was owed the Bondholders was senior to the unsecured and junior UAW liability.  In a bankruptcy all senior obligations must be met in full before you move down scale to more junior obligations.  In short, the bondholders should have received all the company, at least all the company that was divided between the bondholders and the UAW; however, GM only got 10% of the stock of GM (in lieu of debt) for $27 Billion while the junior and unsecured UAW liability of merely $10 Billion received 40% of the stock of the company.  When the bondholders were cheated the effect was to steal money from the savings and retirement accounts of Americans.

This is a crime of monumental proportions and can be explained only as a political payoff to the unions since the labor movement was the single largest contributor to the Obama and Democrats political campaign.  It would have been an interesting news item if 40% of the company had gone to Haliburton.  This is an advantageous distribution to the UAW over GM Bondholders by a ratio of 10.8 to 1 (which itself does not take into consideration the seniority of the bondholders).  It would be nice to receive a favorable distribution as compared to other creditors by the ratio of 10.8 to 1 when legal precedent dictated that you (UAW) would receive zero.  This favoritism cannot be explained as anything but cronyism and political payoff.  This is the crime of the century.  But, what do the Democrats like to keep telling us?   ….”elections have consequences”  [and those consequences can be criminal when you have a “free” press in the tank with the administration.]

June 8, 2010 | Filed Under American Left, Democratic Hypocrisy, Economics, The Left | 2 Comments 

Michael Moore’s preferred 95.6 % Income Tax Rate

  I saw Michael Moore on Hannity the other night and maybe some of you did as well, but I decided to put his (Moore’s) demeaning comments to Hannity down on paper mathematically.  If you watched the show you know that he was talking down his nose to Hannity all night suggesting that he didn’t care about the “poor” at all.  When Hannity asked Moore to define what his tax plan would be he said the following below.  Please bear with me as I transcribe his comments into real values.  Also my assumptions are not assumptions at all, but based on “taxing the rich” as Moore prefers.

 

Since we are talking about the rich and both Hannity and Moore could be described as “rich” with each making income in the million’s I am going to make this analysis based on the Maximum tax bracket in both the Federal and State model and I am going to ignore the slight impact of the lower brackets since it is insignificant within the class of the rich.  I am also going to “assume” for the purposes of this analysis that the “rich” in question here are “self employed” people since most of them are such as Moore himself, Hollywood Stars, Rock Stars, etc.  These are the rates effective for 2009.  

 

Mr. Moore said that both he and Hannity could afford to have their tax rate “doubled” and that this should happen and would be disappointed if Obama didn’t do this.  Although Hannity took him to mean doubling ALL their tax rates I believe that there was a disconnect between Hannity and Moore on this point.  I am going to assume the conservative approach and say that Moore was only referring to the Federal Income Tax Rate (if I am wrong and he is suggesting what Hannity thought he heard, watch out, that is a combined tax burden exceeding 100% of income).  Since the maximum Federal Tax Rate (effective on income above $372,200 for Married Filing Joint) is 35% Moore’s “doubling” of the Federal Tax Rate would bring his practical “Federal” tax rate to 70%.  He went on to state that it was a scandal that “high earners” paid Social Security Retirement tax only on the first $106,800 of earnings with the rest being untaxed.  He thought that this was an abuse of the lower earners and a shame on the higher.  (He didn’t mention that through the IRS taxation of Social Security Earnings that by far that most of the Social Security payments are made to the lower income earners.)  So adding this tax to not only the first dollar but the last dollar of earnings as well brings this component of tax up to 15.3% on all income.

 

In addition to this we can assume (though Moore didn’t state) that the State Income Tax is still part of the “overall” tax package as it affects the tax payer.  States vary in such rates, but since most of the noise on the matter is coming from California, I’ll use their tax rate as the example in this model.  That “maximum” tax bracket is 10.3%.

 

Adding this all up you will get a combined 95.6 % (70.0 % Federal Income Tax, 15.3 % Combined Social Security & Medicare Tax, and 10.3 % State Income Tax-CA).  

 

This 95.6% is simply those taxes based on income and do not recognize Real Estate nor Sales Tax.  (Of Course in addition to “income taxes” the Democrats through the voice of Nancy Pelosi are now considering a “National Sales Tax” (VAT) on top of it all.

 

So, lets take a great income of $10,000,000 for these “filthy rich” celebrities, stars, Entrepreneurs, business owners, etc.  So here you have a Gross Income is $10 million and after deducting the taxes that Michael Moore and his ilk have in store for you, your “take home pay” (i.e. after tax income) is $440,000 and you may say “gee that is a good income and so right you may be, but this the amount before further reduction due to sales taxes and Real Estate taxes on those expensive houses, and with that you will probably be in the S300’s take home range.  If you are not so talented and only making $5 million per year you can count on a take home pay before sales and real estate taxes more in the low $200,000 range and this is before putting anything aside for Retirement or children’s education (assuming we ignore the VAT tax on top of this all being considered by the Democrats right now).  I have to believe that the Jet Fuel for this class of liberal is more than $200,000 per year alone.

None of this analysis begins to approach the element of “risk” that the “rich” must confront in order to develop a business that will earn them a profit of $10 million, $5million or even less.  When you take this into consideration you have a situation where nobody would take the risk to develop the jobs that the country needs.  At the 10 million level of pre tax profit you might have a Gross business of $100,000,000 with a 10% pre-tax profit (which would be great) and if you were fortunate enough to obtain a rate of return on your invested capital of the lofty number of 20% this would mean that you had “at risk” capital of $50,000,000 to fund this type of operation.  In short you are risking $50 million with the hopes in a good year of making maybe $300,000 take home pay.  Not me……..and I doubt you would either.  I’ll just keep the $50 million risk free and you can look for your jobs elswhere.

Now this is change you can not only believe in, but that you are going to get………………….

October 10, 2009 | Filed Under Administration, American Left, Economics, Taxes, The Left | 3 Comments 

“Collective” Praise by School Children

  Now back at the Florida Headquarters from Ohio then Nashville (nearly adjacent to the EIB network) J

I wanted to post a personal email I sent to a couple of friends last night that are occasional readers and commenters here at NSL, though not on the flattering side.  I have taken the liberty of nominal editing and redaction of some actual personal numbers in this republished letter, but you can trust that they were just the same significant, at least to me.

I’d hope that while the left is taking a page out of the Mao Tse-Tung songbook of “collective” praise by school children for the leader (mmm, mmm, mmm) that some might read the article (below) about the “real world” and learn something about how finance actually works, but then again that is why they say about SOME teachers: ”those that can do, do …. while those that can’t do, teach.”  New York is worried and perplexed about why the income tax revenues from the recent piled on tax of the “wealthy” this year is not meeting expectations even after adjustment for the recession.  The truth is (and to their future and intensified dismay) because it was enacted just this year the “wealthy” have not yet been able to implement their “end game” economic plans.  This year down 20% but look out for additional exodus from New York that will not only erode some of the planned increase, but take money off the table that previously existed under the prior tax structure.  You might say, “well, that is a state problem,” but they can’t run away from the Federal Government.  This is the naiveté of the left.  These people are the primary employers in the country and just watch them move investment & production offshore because of this type of stuff and cap & trade, etc.  [Just like Obama did in 2008 with the proceeds of his book sales income invested almost entirely in foreign investments.]

 

Though just a small player in the financial world, I am a “tax refugee” from Ohio myself.  I make most of my income from stocks and the stock market.  My margin cost (i.e. investment interest) can run to 50% of my gross proceeds (and has been 80% in the past).  Ohio is one state that does not recognize the legitimate expenses of producing income and wants to tax the gross not the net.  Even the Federal Government allows this type of expense though be it “below the line” as they say and then they also have an “unfair” “run off” of Schedule “A” deductions and of course taxing the gross through AMT outrage.  Any self respecting “progressive” won’t see anything wrong with this at all and others will justify it by accusing and citing what they personally didn’t like about George Bush or some ad hominem comment like that, but the bottom line is this is costing governments “revenues” and they just can’t seem to grasp that.

One example is that I myself now file as a Florida resident (and you can be sure I am dotting the i’s and crossing the t’s religiously on the residency game).  I went ahead and calculated my hypothetical OHIO taxes for 2008 (just for personal humorous entertainment since I became a refugee in 2007).  Well, I laughed when the computer gave me the answer.  Even though the rate is about 30% lower than CA, if I were an Ohio resident in 2008 I would have sent them a check for $XX,XXX.  If they had responded favorably and reasonably to my petitions to have margin or investment interest deductible against investment income, I would have only had to pay around $XX,XXX in taxes.  A couple of Republicans proposed this legislation (which I think I may have influenced) but the “progressives” shot it down.  Their “progressive” ignorance not only cost them the $XX,XXX extra tax they wanted from me but the amount I would have paid if they had allowed investment interest deduction as well.  In short they lost it all.  You say “no big deal” but remember I am not the only one.  I meet “tax refugees” down here all the time.  Ted Turner is one by his own admission. (though I didn’t meet him)

 

If teachers or people want their children to learn something that will be of value apart from some inane mantra about the leader however creepy it may seem, they should teach them the lessons of this article (just think how delicious the response would have been if it were George Bush they were singing about 2001-08).  Since people still have certain freedoms the schemes of the left are doomed to failure, but I think they know this and realize that they will have to deal with what we once thought of “as” our freedoms.  [just for starters take note of the Baucus health care bill requiring the young & healthy to buy health insurance or pay $3,800 +/- “tax” under penalty of fine and imprisonment in the gulag (most likely un-constitutional now ….. pending future vacancies) in order to subsidize health care for the older and other uninsured (which now looks like will include “illegal aliens” by simply declaring them legal).  Just think what a world wide health care magnet that will make us…….we’re so wonderful]

 

About the article below, read it, memorize it and don’t forget it…………. They already tried this with the aviation and marine industries during Clinton and it failed so badly that Teddy Kennedy led the repeal himself. But along the way it cost untold thousands of jobs and was a “net income loss” for the Treasury.  The Democrats bragged about it being a luxury tax on the rich.  No “rich” person paid the tax and none were denied luxury yachts or private jets or non-jet aircraft, yet they (the rich) still created a lot of jobs…….overseas.  What is it they say about what the deffinition of insanity is?  But what the hell, change is coming.  (heard that before too)  http://news.yahoo.com/s/ap/20090927/ap_on_re_us/us_taxing_the_rich

September 28, 2009 | Filed Under Administration, American Left, Economics, Health Care, Political Correctness, Politics, Taxes, The Left | 1 Comment 

Shameless “Mainstream Media” Scandal

  I found with great amusement that Palm Beach Post published yesterday (Wednesday 9/16/2009) for the first time a so called “Breaking News” :) story and detailed the saga of a Florida International coed 20 year old Hanna Giles and 25 year old political activists James O’Keefe video sting on ACORN’s willing assistance in fraudulent house financing, counseling for tax evasion conspiracy, enable and counseling an illegal activity (prostitution) and facilitating the smuggling of illegal under age girls to be used in the sex trade business as prostitutes (sex trafficing) in numerous of their branch offices.  This is a story that is 6 or 7 days old but the mainstream media has been conspicuously absent on the story. 

 

At last the New York Times mentioned the story yesterday without any discussion or explanation of the merits of the story, but used their article as a battering ram against Conservatives ….. unbelievable.  ACORN has now been stung in 5 separate cities and as I understand it there are quite a few more feet to fall on this matter.  The initial response by ACORN was that it was “doctored” and was a vendetta and not based in reality, but today admitted (what else could they do) that this was unacceptable behavior.  I have been calling for Obama to disavow this ACORN group, but like the mainstream he remained silent until AFTER his cover was provided by ACORN itself when they issuing a self-condemnation statement.  A couple of days ago the Senate voted 83-7 to cut off ALL funding by the US Taxpayer to ACORN.  I wonder where those coward 9 other Senators were when the vote was taken?  Let’s see if Nancy follows through in the US House of Representatives and if the President signs it.

 

The thrust of the NY Times article was to complain that the “right” has been trying to draw a non-existent link between Obama and ACORN ever since the primaries.  Since the NY Times has chosen to invoke this line of attack please allow me to set the record straight.  That comment from the NY Times is a cheap attempt to disassociate Obama from ACORN and is itself a cover up such actual association.  Obama’s association with Acorn is long and deep.  Even in this last primary season, the Obama campaign paid ACORN $888,000 for campaign services.  That’s right, Obama paid a “tax exempt organization” (for those of us in the professional tax industry that would be 501-c-3 non profit corporation) in order to assist in his campaign (under the gise of voter registration and we know how fraud laden that little operation was) especially after they came out and announced support for Obama.  ANYWAY…….that is not just a single event, but he has had a long-term association with ACORN.

 

I am enclosing at the end of this post a copy of  page one (Title Page) of the N. District of Illinois Civil Case Docket in an action by ACORN against CitiBank in 1994 with Obama serving as a Page One Lawyer in the 2nd position on the listing of Lawyers representing ACORN after he joined the recently granted “class action” status of the Buycks-Roberson v. CitiBank with his own cases against CitiBank that he filed himself.  [FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000].  There are numerous other examples of continued close contact between Obama and ACORN over the years from training their employees to consulting.  [It doesn’t seem his training of their employees was a very effective endeavor.]  Not to mention that during the campaign Obama addressed ACORN in a speech (available on video for all to see) in which he promised that they (ACORN) would have a seat at the table (if he was elected President) in establishing policy for his administration.

 

For those of you new to Next Stop Lauderdale, Buycks-Roberson v. CitiBank was a landmark case against the banking industry by ACORN resulting in an “out of court” settlement that led to a chain reaction of events where the Democrats in Congress pursuaded Fannie May to re-write their loan standard downward (on the basis of “affordable housing”) and that became the first domino in the current housing crisis resulting in the subsequent current collapse of the banking industry and a national recession.  For a full white paper exposing this story and the fact that Obama is probably the single most responsible politician connected to the current financial crisis and recession go HERE.  (You can forget those protests of Obama  himself as he asserts that he “inherited” this mess from Bush).

 

I would like to conclude by saying that these two brave kids Giles & O’Keefe are indeed the Woodward & Bernstein of this current generation.  They are probably deserving of a Pulitzer Prize award for Investigative Reporting but don’t look forward to that since the vast majority of the 18 Board Members are from Liberal Mainstream Publications or Liberal Academic Institutions and these are the same crowd that selectively has chosen to ignore this story since it didn’t follow their own story line and bias.

__________________________________________________________________________

 

September 17, 2009 | Filed Under American Left, Main Stream Media, Political Correctness, Presidential Politics, The Left, Uncategorized | 3 Comments 

ACORN’s Shocking Criminal Conspiracy

  One thing I found interesting this week.  Once Again ACORN is caught with egregious conspiracy to commit a crime this time involving illegally obtaining home loan, Federal Tax Evasion counseling, condoning illegal activity and facilitating human trafficking of alien illegal minors for prostitution and conspiring to prepare fraudulent tax returns to obtain non-withheld credits based on declaration of children in illegal trafficking for “Earned Income Tax Credit” and after multiple indictments throughout the country on voter registration you hear nothing from the beloved mainstream press about the incident ……..and now get this.  The (Democratic) officials in Baltimore (the scene of the crime) decide not to investigate ACORN but to investigate the two videographers that set up the sting and recorded the incident.  Wonder if they ever investigated 60 Minutes when they did any of the hundreds of similar stings on television.  It will be interesting to see if honest people of goodwill allow this stand in Baltimore or if they are all corrupt.

I am sitting back and going to wait for those that respond to this letter by asserting wrongs of the Republicans as though anything is on the same level as Human Trafficking of minors for sexual purposes.  Also I am sure the defenders and those that are defenders by their silence see nothing wrong with this because how much less is this than the murder of innocent babies that doesn’t seem to bother them either.  Further tax evasion (not tax avoidance) doesn’t seem to be a problem because multiple leaders of the Democratic party practice the same while talking of tax fairness out of the other side of their pocket book.  The mainstream press should be ashamed and are fully complicit in this type of activity due to their continued silence in disrespect to their Constitutional responsibility and have in effect provided “safe harbor” for the evil this represents and not inadvertantly.  You say it is isolated? ………..and I laugh.  I do have to hand it to the Census Bureau who fired ACORN as a contractor for the Census in 2010 as a result of this.  I wonder who is going to defend this no matter how circuitiously the defence is postulated.

You say this wasn’t a crime, and I’ll correct you and say it was a “criminal conspiracy” and you might say where was the conspiracy and I’ll say that the person (the ACORN Accountant) that provided most (not all) of the criminal counseling offered to prepare the tax return for a discounted price (for a “new” business) which closed the criminal loop with an offer to participate and induce the crime.  This is sort of like the average run of the mill hooker/John sting where they police cannot move until there is offer to commit a crime (description of services) and a price to play.

How criminal must those be in the Administration be that hired ACORN in view of their repeated fraud and criminal indictments throughout the country over the past several voter cycles.  Everyone with an ounce of honesty knows this is a politicall pay back off. 

It is time for Obama to stand up and condemn this organization regardless of the personal cost it is to his fund raising machine if he has an ounce of integrity.  His failure to do so will link to his personal culpability since he has worked so closely with them in the past.  For goodness sakes, he has appologized for every other evil as he sees it that he didn’t personally commit since he was inagurated. …….I’m waiting.

September 13, 2009 | Filed Under Administration, Political Correctness, Presidential Politics, The Left | 1 Comment 

Money For Nothin -Global Warming

  You know the likes of Al Gore and others have been complaining about Global Warming and have been sending up those alarms for some time now.  And of course I have been so irreverent and callous to do nothing but make fun of them and their kinky theories but more importantly their draconian solutions (as profitable as they may be).  ……….but I have now come to realize that Global Warming is actually a much bigger problem than I thought and even a bigger problem than Al Gore or that “consensus” of Scientists has believed.  You see this problem isn’t related to just Earth, it is related to numerous other planets and moons in the Solar System.  Wow………just think if we could tap the carbon offset credit market on those planets.  So let’s summarize here:  What do Triton, Jupiter, Mars, Pluto, Venus and Earth have in common (besides the fact that they are all undergoing a phase of Global Warming)?   Are you smarter than a 5th Grader?

Sorry time’s up………………. the answer is:  The Sun…………….. Yep, they don’t have the internal combustion engine, nor coal fired power plants, nor incinerators, nor cows (flatulence), nor most importantly…. man (at least I don’t think so).   That ain’t workin that’s the way you do it Get your money for nothing get your chicks for free NOTE THE FINDINGS:

   28 Jun 1998 - NASA’s Hubble Space Telescope and several ground-based instruments show that temperatures on Neptune’s largest moon have increased dramatically since the Voyager space probe in 1989. So much so, in fact, that Triton’s surface of frozen nitrogen is turning into gas, making its thin atmosphere denser by the day.“At least since 1989, Triton has been undergoing a period of global warming,” says astronomer James Elliot, professor of Earth, Atmospheric and Planetary Sciences at Massachusetts Institute of Technology. “Percentage-wise, it’s a very large increase.”Elliot and colleagues from the Lowell Observatory and Williams College reported their findings in the June 25 issue of Nature. Triton’s 5 percent increase in temperature from about -392 to -389 degrees F would be like the Earth experiencing a jump of some 22 degrees F in just nine years. CITATION  NOTE: Yahoo citation no longer on website.

04 May 06 - Jupiter is growing a new red spot and the Hubble Space Telescope is photographing the scene.“Red Spot Jr.” as it is being called, formed after three white oval-shaped storms—two of which were at least 90 years old—merged between 1998 and 2000.The study was led jointly by Imke de Pater and Philip Marcus of University of California, Berkeley.“The storm is growing in altitude,” de Pater said. “Before when they were just ovals they didn’t stick out above the clouds. Now they are rising.”This growth signals a temperature increase by as much as 10 degrees Fahrenheit in that region, she said. CITATION

28 Feb 07 - Simultaneous warming on Earth and Mars suggests that our planet’s recent climate changes have a natural—not human- induced—cause, says Habibullo Abdussamatov, head of the St. Petersburg’s Pulkovo Astronomical Observatory in Russia.Earth is currently experiencing rapid warming, which the vast majority of climate scientists says is due to humans pumping huge amounts of greenhouse gases into the atmosphere. Mars, too, appears to be enjoying more mild and balmy temperatures.This Mars warming says Abdussamatov “is evidence that the current global warming on Earth is being caused by changes in the sun.”“The long-term increase in solar irradiance is heating both Earth and Mars,” he said.“Abdussamatov believes that changes in the sun’s heat output can account for almost all the climate changes we see on both planets. (I agree.)Mars and Earth, for instance, have experienced periodic ice ages throughout their histories. “Man-made greenhouse warming has made a small contribution to the warming seen on Earth in recent years, but it cannot compete with the increase in solar irradiance,” Abdussamatov said.By studying fluctuations in the warmth of the sun, Abdussamatov believes he can see a pattern that fits with the ups and downs in climate we see on Earth and Mars.All planets experience a few wobbles as they make their journey around the sun. Earth’s wobbles are known as Milankovitch cycles and occur on time scales of between 20,000 and 100,000 years.These fluctuations change the tilt of Earth’s axis and its distance from the sun and are thought to be responsible for the waxing and waning of ice ages on Earth. (I agree. The Milankovitch cycle is called the “Pacemaker of the Ice Ages.”)Abdussamatov also dismisses the greenhouse effect, in which atmospheric gases such as carbon dioxide help keep heat trapped near the planet’s surface.He claims that carbon dioxide has only a small influence on Earth’s climate and virtually no influence on Mars. (I agree.)Abdussamatov suggests that the sun holds something quite different in store.“The solar irradiance began to drop in the 1990s, and a minimum will be reached by approximately 2040,” Abdussamatov said. “It will cause a steep cooling of the climate on Earth in 15 to 20 years.” (I agree.)“Abdussamatov’s work has not been well received by other climate scientists.” CITATION  

9 Oct 02 - Astronomers today said Pluto is undergoing global warming in its thin atmosphere even as it moves farther from the Sun on its long, odd-shaped orbit.Pluto’s atmospheric pressure has tripled over the past 14 years, indicating a stark temperature rise, the researchers said. The change is likely a seasonal event, much as seasons on Earth change as the hemispheres alter their inclination to the Sun during the planet’s annual orbit.They suspect the average surface temperature increased about 3.5 degrees Fahrenheit, or slightly less than 2 degrees Celsius.Pluto remains a mysterious world whose secrets are no so easily explained, however. The warming could be fueled by some sort of eruptive activity on the small planet, one astronomer speculated.Though Pluto was closest to the Sun in 1989, a warming trend 13 years later does not surprise David Tholen, a University of Hawaii astronomer involved in the discovery.“It takes time for materials to warm up and cool off, which is why the hottest part of the day on Earth is usually around 2 or 3 p.m. rather than local noon,” Tholen said. “This warming trend on Pluto could easily last for another 13 years.  CITATION

29 Nov 07 - Once styled as Earth’s twin, Venus was transformed from a haven for water to a fiery hell by an unstoppable greenhouse effect, according to an investigation by the first space probe to visit our closest neighbor in more than a decade Like peas in a cosmic pod, the second and third rocks from the Sun came into being 4.5 billion years ago with nearly the same radius, mass, density and chemical composition.But only one, Earth, developed an atmosphere conducive to life. The other, named with unwitting irony after the Roman goddess of love, is an inferno of carbon dioxide (CO2), its surface hot enough to melt steel.But this was not always so, says Hakan Svedhem, an ESA scientist. Venus, he believes, may have been partially covered with water before it became doomed by global warming.  CITATION  NOTE: Yahoo citation no longer on website.

October 9, 2008 | Filed Under Global Warming, Political Correctness, The Left | Leave a Comment 

Community Reinvestment Act of 1977 (a white paper)

     The Community Reinvestment Act of 1977 (CRA) which was designed to encourage mortgage credit though all areas not just wealthy areas was passed during the Carter Administration and subsequently managed by Jack Kemp during the Reagan Administration.  It was not designed to insure credit was made available to unqualified borrowers.  It wasn’t until 1994 during the Clinton Administration that this Act of Congress became a useful tool for activist organizations like Acorn (which is facing criminal investigation in many states) and Community Organizer Lawyers like Barack Obama to leverage it to the advantage of their political and activist goals.  Janet Reno staked out the new policy of the Clinton Administration which was to be a policy of rigorous enforcement: 

“No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”     

     The way the law was implemented was to deny banks the ability to grow or buy out other banks unless they were in deemed to be in “compliance” with the CRA and individual ad hoc groups were authorized and encouraged to bring legal action against the banks to enforce this action.  The lawsuits that were filed against the banks could literally bring all plans to a “standstill” on mergers or expanding their capital base.  The litigious nature of these groups caused many banks to “play ball” with them and approved very questionable loans and to concede to financial contributions in the multi-millions of dollars to organizations like Acorn to keep peace.  It was in reality a sort of a “protection” plan administered by the activist groups (especially Acorn) much like the Jesse’s Jackson’s Operation Push shakedown.  You had to pay up or they would drag you through the coals and label you as a racist.  In short the shoddy loan practices of the banks were forced upon them through this process, not corporate greed as advertised.

     In 1994 a Lawsuit against CitiBank was brought by Acorn (and soon to come association with activist Chicago lawyer named Barack Obama) in: 

Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/InsuranceDocket / Court 94 C 4094 (N.D. Ill.) FH-IL-0011 State/Territory Illinois,

and in 1995 such suit was granted “class action” status and Barack Obama joined the suit with his own clients in the following three Illinois cases he was personally representing against CitiBank and remained as a page one named attorney in the class action suit representing ACORN, et al.:

FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000.

     This case was to force CitiBank to abandon their loan policy of not making loans in risky markets and to risky borrowers.  The political pejorative for this was Red Lining.

     In 1997 CitiBank “settled” out of court after the Democrats in Congress at the behest of Acorn forced a reduction in mortgage loan standards for banks through coercion on Fannie Mae and Freddie Mac and then began “donating” large sums of money to ACORN and reversing their practice of “red lining” districts and borrowers that were not qualified for loans.  Enter James Johnson.

     James Johnson was the Chairman and CEO of Fannie Mae after previous political activity as serving as the Campaign Chairman of Walter Mondale’s failed 1984 Presidential bid.  It was during his tenure that the goals of Acorn and many activists in Congress such as Maxine Walters, Christopher Dodd and Barney Frank we’re supported by Fannie Mae by providing the ultimate backstop for Citibank’s agreement to issue what were risky loans by agreeing to guarantee those loans and in fact purchase the loans in many circumstances from CitiBank.  (We know now that  those loan guarantee and purchases resulted in the ultimate demise and conservatorship of Fannie Mae and Freddie Mac in 2008.)

     During this time (1991-1998) that Johnson was Chairman and CEO of the quasi Public organization (Fannie) he and Fannie reported that he was paid $6-7 million (wow for a quasi public corporation) but it was discovered by the Office of Federal Housing Enterprise Oversight (OFHEO) in 2004 that Fannie Mae had deferred $200 million in expenses in 1998 through the accounting techniques identical to that of Enron and WorldCom (I can say this being an accountant) to enhance the appearance of profits.  Since the current crowd of operators initiated a “bonus” program that was based on profits, millions of dollars of fraudulent bonuses were made available to Johnson, his successor Franklin Raines and Raines’ ultimate deputy Jamie Gorelick (Both Raines and Gorelick were Clinton appointees).  OFHEO also found that Johnson had misrepresented Johnson’s compensation as $6-7 million after the audit and found that it was actually $21 million (talk about Public Servants).  Johnson (along with Chris Dodd D-CT Chairman of the powerful Senate Banking Committee who originally said he didn’t know Angelo Mozilo, CEO of Countrywide Financial) received special “below market” loan approval on a private personal loan directly from Mozilo of Countrywide who was the first major domino to fall in the Sub-Prime housing market.  It was found that Mozilo had a personal list of people under his direct authority for obtaining special loan approval.  It was called his VIP list.

     It should be noted that Johnson subsequently served as Chairman of the John Kerry Vice President selection committee and was providing similar advice to Barack Obama after he secured the Democratic Presidential nomination.

     When Johnson left Fannie Mae in 1998  Franklin Raines was appointed by Bill Clinton as Chairman and CEO and took the financial scam to new heights.  He appointed as his deputy a loyalist from the Clinton Administration that had not one minute of financial education or experience Jamie Gorelick (the author of the Clinton policy of the “absolute wall of separation” between U.S. intelligence organizations which had substantial impact on the proverbial left hand not knowing what the right had is doing issue leading up to our intelligence gaffs on bin Laden and 911.  The US Government was not allowed to share intelligence information between the CIA, FBI and other intelligence gathers………….think about it and how devastating that result was.)

     With the settlement of the Class Action Lawsuit against CitiBank (the largest in the USA) and Fannie & Freddie taking all the loans you can present, banks like Citi and others based on these precedents wrote zillions in mortgages to unqualified buyers knowing that the Federal Government would “guarantee” re-payment and even purchase the loans.  Purchasing the loans became the game of the day at these quasi federal agencies since Raines had taken his remuneration package to the Board to have it tweaked to the number of loans that were written with the sweetener to obtain agreement by the Board of Directors was an offer of increase in their pay.  As a result during Raines tenure he was able to take out $90 million in bonuses and Jamie Gorelick (deputy) took out and additional $25 million.  Raines later settled out of court on a civil case for “cooking the books” but most of the settlement (about $3 million) was paid for by an insurance policy (paid for by Fannie) and a few hundred thousand dollars of other costs while allowing him to keep nearly all the $90 million.  [It is time for criminal charges to be pursued.]  You should know that Raines is today a financial consultant to the Obama campaign though after initially bragging about it they now deny it.

     The purpose of this “White Paper” is to shed light on what really was the template for the ultimate collapse of the mortgage industry in this country since thousand upon thousands of these unqualified loans were written.

     Barack Obama is still going around blaming Wall Street greed for the financial fiasco while the truth is that Wall Street bought into this program through the pressure of Freddie and Fannie when Freddie and Fannie took packages of these loans and turned them into “securities” that they could market to Wall Street.  This was all the result of a series of events of which Barack Obama played a significant role early on.  Wall Street (i.e. the investment banking community) bought into the commercial banking products because they had been pressured and they were told they were “riskless” by Franklin Raines (I heard the tape where he told the Congressional Banking Committee when asked about the degree of risk they represented he answered “riskless”).  The more they could securitize and push to the investment banking community the more cash they would have to buy more loans from the lenders and increase “bonuses,” and I should add that Obama was the second largest recipient of campaign contributions from Fannie Mae, only being topped by Christopher Dodd (Democrat-CT) Chairman of the powerful Senate Banking Committee.

      During House Financial Services Committee hearings in 2003 when the BUSH administration was becoming aware through OFHEO there were real problems with Fannie and Freddie and proposed regulatory legislation, a major row occurred in the House Committee by the minority leadership Barney Frank where he read the administration the riot act and as reported at that time by the New York Times (9-11-2003) the following statement:

Bush today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.  Significant details must still be worked out before Congress can approve a bill.  Among the groups denouncing the proposal today were the National Association of Home Builders (of course) and the Congressional Democrats who fear that tighter regulation of the companies. 

And in the direct quotable words of Barney Frank (ranking Democrat-MA on the Financial Services Committee)

“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,”  “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” 

     Don’t you find it interesting that Barney Frank and his cohorts in the House and the Senate are blaming the Bush administration for “lack of regulation?”  It didn’t start there nor end there.  In January of 2005 the Senate introduced a bill titled “Federal Housing Enterprise Regulatory Reform Act of 2005 S. Bill 190.  This bill could well have brought the practices of Freddie and Fannie into check and regulation.  This bill had 3 Republican sponsors including John McCain and zero Democratic sponsors, but in the Senate you need 60 votes to move legislation and the Democrats made it clear (on party lines) that they would not support this legislation. [But of course the lie being told is that it was Bush, McCain and the Republicans that resisted regulation of the financial industry.  They only need to repeat this lie 29 more days to where it won’t matter so much when the truth finally comes out.     It is time for the Republicans to get with it and start to defend their conduct over the past 10 years on this issue and illustrate that it was nearly a 100% operation of the Democrats to thwart regulation which is directly opposite of what they are saying now.  There are many other instances where the administration attempted to bring these matters under control and were thwarted by the Democrats.     This financial disaster is the direct and proximate result of the bastardization of the Community Reinvestment Act by the Democrats in the 1990’s in order to extend their “social engineering” to the financial markets.     Please serve as a counter force to the largest and most sinister scam, in my opinion, that is being thrust on the American public.  Share this narrative about the “bailout” (which I supported) as a direct result of the Democratic meddling in the mortgage community and Congressional Oversight role for the past 10 years.  They would have you believe they are trying to help out Bush after his financial policies failed.  The biggest financial problem we have ever had since the Great Depression is a direct result of socially engineered housing policies of Clinton and Banking Oversight Policies of the Democrats in Congress…………..period.  The Democrats are flat out lying about this every day and it needs correction.  And I’ll tell you that any body that knows what actually went on will not want to debate this issue.

October 5, 2008 | Filed Under American Left, Economics, Fiscal Policy, Politics, Presidential Politics, The Left | 16 Comments 

Hillary’s $100 Generosity (in theory)

 Subtitle: “Let them eat cake.” Hillary and her entourage visited the Maid Rite Restaurant in Toledo, Iowa this past Thursday and ran up a $157 tab.  This tab was settled by a credit card of the campaign and the campaign has provided a receipt of the card charge to prove it.  What it doesn’t prove is that the $100 tip claimed by Clinton was ever made.

Anita Esterday a waitress at the restaurant that served Mrs. Clinton and her guest said she chatted and exchanged pleasantries with Mrs. Clinton and might even vote for her but that Mrs. Clinton failed to leave a tip.  Hillary even used the encounter in a campaign speech.  I suppose it was about the raw deal the working people are getting in this country with minimum wage or health care or something like that.  The campaign went in defense mode and insisted that a tip was left on the table for $100.  When Ms. Esterday said “why would I lie about not receiving a tip,” the campaign repeatedly said that “well we left the cash.”

This was somewhat of a change from their perspective that they understood the tip to have been added to the credit card.  The manager says that their card processor doesn’t automatically add a tip to any charge.  He also says that there was no cash tip left at the table at which Hillary was seated.  The manager stated that all of their waitresses are long term waitresses (25-30 years) and that there isn’t one that would pocket someone else’s tip.  This is an interesting story that leads to the following observations in my opinion: 

  • Why would the campaign “presume” that a tip was added to their VISA” and if so presume it was $100 on a $157 tab?  
  • Why would the campaign go out on fund raising trips and ask for your money to help finance HRc’s campaign and then squander it on over tipping?  (Would you want your campaign contribution going to excessive, showy and unnecessary tips that aren’t even expected?)
  • Why would anyone charging the bill put part of the charge on the card and rely on carrying around a wad of cash (i.e. $100) for tips?  If you have ever worked in the area of expense reporting in a business you know that split reporting of a single expense is not only not likely but practically unheard of.  I would also think that a political campaign covering expenses with “cash” would be a large faux pas that you could drive your truck through, with prior accusations of them handing out “walking around money” to supporters (i.e. cash with no audit trail).
  • Why wouldn’t the person handling the paperwork notice that the tab they signed for did or didn’t have a tip and that it was or wasn’t $100?

Later a campaign staffer apologized to Esterday and gave her a $20.00 bill and my question is where is that $100 that was avowed?  So their tip generosity was $100 (64%) when they could simply assert it, but when it came to actually taking their own money and paying it, it is only $20.00 (12.7%) which is substandard.  So this illustrates how HRc claims to be the champion of the “little people” but as it turns out she is the oppressor (I guess we can’t say she is the “man”).

Of course none of my conjecture is accurate, because what actually happened is Clinton stiffed the waitress and the rest is spin control amplified by increasing intensity of their lies which I believe is clear.  MORE

November 10, 2007 | Filed Under Presidential Politics, The Left | 27 Comments 

Obama and the Flag and Now the National Anthem

  A PICTURE IS WORTH 1,000 WORDS: I know it’s an old story that Obama has removed the US flag pin from his lapel after wearing it following 911 and he justified this by stating: “I am less concerned that what your are wearing on your lapel than what is in your heart.”   He also stated that he has abandoned the pin in favor of actions that would be more meaningful in demonstrating his patriotism.  Snopes confirms HERE that this picture is an authentic picture from Time magazine of the candidates (note Richardson & Hillary) at an Iowa steak fry.

Now I am not critical of Obama not wearing the lapel pin, I don’t wear one myself, but his overt decision to take it off and make a statement gives pause, but not a terrible lot of pause until you add this to the question: what is the statement that this action in the picture above demonstrates where he sort of stoically flaunts protocol designed around national respect (hand over heart) in context of his own standard that he would take actions that would more meaningfully demonstrate the authenticity of his patriotism.  I’m not ready to conclude the Manchurian Candidate thing, but I am not sure he is rising to a reasonable credibility level about his true viewpoints with these actions.  He raised this issue himself and we can only measure him by his own statements, standards and actions.

UPDATE COMMENT:  This may be one of those “read my lips” moments…..steve

October 30, 2007 | Filed Under Presidential Politics, The Left | 21 Comments 

$1,000 for your vote!!!!

hillary.jpg Do you remember when George McGovern ran for President against Richard Nixon in 1972 he promised to give every American $2,000? Talk about pandering and having the taxpayer pay for what amounts to campaign financing.  (This would have increased federal spending by about 50% for this plan alone……..no wonder he was 100% behind having Senator Eagleton on the ticket as V.P. originally before he fired him……..Wiki Eagleton if you want in on this bit of humor :)

Well now we have it again with Hillary offering to set up everyone a 401-K with the Government kicking in $1,000 per plan.  Gee thanks, just write me the check and forget the bureaucratic costs.  Lets see, you have had the Republicans saying (along with myself on a few NSL posts) that private retirement accounts are the only solution for solving the Baby Boomer retirement equation.

I think this proposal is a defacto admission that no form of modification (short of changing the retirement age to death + 1 year) of the Social Security System will keep the program solvent.  But wait………..now we have them also proposing a system that basically turns the money that employers and workers put in retirement savings over to those nasty Wall Street boys, and get this, along with taxpayer money as well.  I wonder if Harry Reid will immediately jump on this and accuse her of having retirement savers put their money in a “risky” stock market scheme like he accused Republicans of when proposing private accounts.  (you don’t think that the 401-K managers will simply purchase Treasury Bills do you?)   

Now here is the sweetest part of all.  She is talking about financing this through a modification on the Estate Tax laws and according to her statement at a campaign stop in small–town central Iowa she is going to tax Estates over $7,000,000 to fund this program and again according to her own statement that from each estate exceeding $7,000,000 5,000 families would get the matching funds of $1,000 (i.e. $5,000,000).  Wow, that sounds generous of her…….and to think she can do all this with only taxing estates at the rate of 71.4%.  Although she didn’t admit it out loud you can see that if a single estate of $7,000,001 would fund $5,000,000 (5/7 = .714 - that is 5,000 families at $1,000 per family) you end up with a confiscatory estate tax rate of 71.4% at the Federal level alone plus what ever the state accesses.

I wonder if this proposal will last any longer than last month’s little bit of pandering where she stated at an address to the Congressional Black Caucus that she wanted to give every child born a $5,000 baby shower gift from Uncle Sam which could be used to pay towards college or a first home.  Her office claims that she has now given up on that proposal, but not until after (I am sure) it obtained its desired impact on impoverished and black communities relative to their support for her candidacy.

I am sure she took pains to calculate at what threshold she could put the Estate Exemption (less than $7,000,000) so as not to disturb or rattle the majority of Iowa farmers that have land values not exceeding that amount with those exceeding being a small percentage.  For additional information on this latest and greatest from the geniuses in the Clinton camp, check HERE.

October 9, 2007 | Filed Under Economics, Retirement, Social Security, Taxes, The Left | 11 Comments 

Next Page »