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Bernie Sanders a voice in the Bailout Wilderness

Congress passed the bi-partisan bill on the bailout/rescue legislation that will temporarily stop the bleeding. While it passed there were lawmakers who opposed the measure on various grounds especially those whose political survival is at stake. One of those that make sense that voted against the Senate Bailout is Bernie Sanders the Independent Vermont Senator.

We are sadly between a hard rock and the deep blue sea, damn if you do and damn if you don’t especially when credit is frozen and the resulting job loses brought about by the financial ruin of historical proportion.

While inaction will do more harm as panic stricken lawmakers and the population believes the necessity of coming up with a bailout or rescue legislation as they call it now though flawed as it is hopefully will bring back trust and confidence in the market.

Sanders recognized the need for action but one that will improve the situation, unfortunately being an Independent he has no clout to push through with his amendment. Here is what is posted on Senator Bernie Sanders website:

The Senate approved a $700 billion Wall Street bailout. Senator Bernie Sanders voted against the bill that would put Wall Street’s burden on the backs of the American middle class. “The bailout package is far better than the absurd proposal originally presented to us by the Bush administration, but is still short of where we should be,” Sanders said. “If a bailout is needed, if taxpayer money must be placed at risk, if we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from President Bush's tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation who should pick up the tab, not ordinary working people.”

Sanders proposed a five-year, 10 percent surtax on families with incomes of more than $1 million year and individuals earning over $500,00 to raise $300 billion to help bankroll the bailout. Senators, however, set aside the amendment on a voice vote.

In a Senate floor speech, Sanders elaborated on the bailout bill’s flaws:

"This country faces many serious problems in the financial market, in the stock market, in our economy. We must act, but we must act in a way that improves the situation. We can do better than the legislation now before Congress.

"This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight because the oversight board members have all been hand picked by the Bush administration. This bill does not effectively deal with the issue of foreclosures and addressing that very serious issue, which is impacting millions of low- and moderate-income Americans in the aggressive, effective way that we should be. This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.

"This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulatory fervor which created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds. This bill does not address the issue that has taken us to where we are today, the concept of too big to fail. In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions like the Bank of America swallow up other gigantic financial institutions like Countrywide and Merrill Lynch. Well, who is going to bail out the Bank of America if it begins to fail? There is not one word about the issue of too big to fail in this legislation at a time when that problem is in fact becoming even more serious.

"This bill does not deal with the absurdity of having the fox guarding the hen house. Maybe I'm the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the Secretary of the Treasury, the former CEO of Goldman Sachs, who along with other financial institutions, actually got us into this problem. Now, maybe I'm the only person in America who thinks that's a little bit weird, but that is what I think.

"This bill does not address the major economic crisis we face: growing unemployment, low wages, the need to create decent-paying jobs, rebuilding our infrastructure and moving us to energy efficiency and sustainable energy.

"There is one issue that is even more profound and more basic than everything else that I have mentioned, and that is if a bailout is needed, if taxpayer money must be placed at risk, whose money should it be? In other words, who should be paying for this bailout which has been caused by the greed and recklessness of Wall Street operatives who have made billions in recent years?

"The American people are bitter. They are angry, and they are confused. Over the last seven and a half year, since George W. Bush has been President, 6 million Americans have slipped out of the middle class and are in poverty, and today working families are lining up at emergency food shelves in order to get the food they need to feed their families. Since President Bush has been in office, median family income for working-age families has declined by over $2,000. More than seven million Americans have lost their health insurance. Over four million have lost their pensions. Consumer debt has more than doubled. And foreclosures are the highest on record. Meanwhile, the cost of energy, food, health care, college and other basic necessities has soared.
"While the middle class has declined under President Bush's reckless economic policies, the people on top have never had it so good. For the first seven years of Bush's tenure, the wealthiest 400 individuals in our country saw a $670 billion increase in their wealth, and at the end of 2007 owned over $1.5 trillion in wealth. That is just 400 families, a $670 billion increase in wealth since Bush has been in office.

"In our country today, we have the most unequal distribution of income and wealth of any major country on earth, with the top 1 percent earning more income than the bottom 50 percent and the top 1 percent owning more wealth than the bottom 90 percent. We are living at a time when we have seen a massive transfer of wealth from the middle class to the very wealthiest people in this country, when, among others, CEOs of Wall Street firms received unbelievable amounts in bonuses, including $39 billion in bonuses in the year 2007 alone for just the five major investment houses. We have seen the incredible greed of the financial services industry manifested in the hundreds of millions of dollars they have spent on campaign contributions and lobbyists in order to deregulate their industry so that hedge funds and other unregulated financial institutions could flourish. We have seen them play with trillions and trillions dollars in esoteric financial instruments, in unregulated industries which no more than a handful of people even understand. We have seen the financial services industry charge 30 percent interest rates on credit card loans and tack on outrageous late fees and other costs to unsuspecting customers. We have seen them engaged in despicable predatory lending practices, taking advantage of the vulnerable and the uneducated. We have seen them send out billions of deceptive solicitations to almost every mailbox in America.

"Most importantly, we have seen the financial services industry lure people into mortgages they could not afford to pay, which is one of the basic reasons why we are here tonight.

"In the midst of all of this, we have a bailout package which says to the middle class that you are being asked to place at risk $700 billion, which is $2,200 for every man, woman, and child in this country. You're being asked to do that in order to undo the damage caused by this excessive Wall Street greed. In other words, the “Masters of the Universe,” those brilliant Wall Street insiders who have made more money than the average American can even dream of, have brought our financial system to the brink of collapse. Now, as the American and world financial systems teeter on the edge of a meltdown, these multimillionaires are demanding that the middle class, which has already suffered under Bush's disastrous economic policies, pick up the pieces that they broke. That is wrong, and that is something that I will not support.

"If we are going to bail out Wall Street, it should be those people who have caused the problem, those people who have benefited from Bush's tax breaks for millionaires and billionaires, those people who have taken advantage of deregulation, those people are the people who should pick up the tab, and not ordinary working people. I introduced an amendment which gave the Senate a very clear choice. We can pay for this bailout of Wall Street by asking people all across this country, small businesses on Main Street, homeowners on Maple Street, elderly couples on Oak Street, college students on Campus Avenue, working families on Sunrise Lane, we can ask them to pay for this bailout. That is one way we can go. Or, we can ask the people who have gained the most from the spasm of greed, the people whose incomes have been soaring under president bush, to pick up the tab.

"I proposed to raise the tax rate on any individual earning $500,000 a year or more or any family earning $1 million a year or more by 10 percent. That increase in the tax rate, from 35 percent to 45 percent, would raise more than $300 billion in the next five years, almost half the cost of the bailout. If what all the supporters of this legislation say is correct, that the government will get back some of its money when the market calms down and the government sells some of the assets it has purchased, then $300 billion should be sufficient to make sure that 99.7 percent of taxpayers do not have to pay one nickel for this bailout.

"Most of my constituents did not earn a $38 million bonus in 2005 or make over $100 million in total compensation in three years, as did Henry Paulson, the current secretary of the Treasury, and former CEO of Goldman Sachs. Most of my constituents did not make $354 million in total compensation over the past five years as did Richard Fuld of Lehman Brothers. Most of my constituents did not cash out $60 million in stock after a $29 billion bailout for Bear Stearns after that failing company was bought out by J.P. Morgan Chase. Most of my constituents did not get a $161 million severance package as E. Stanley O'Neill, former CEO Merrill Lynch did.

"Last week I placed on my Web site, www.sanders.senate.gov, a letter to Secretary Paulson in support of my amendment. It said that it should be those people best able to pay for this bailout, those people who have made out like bandits in recent years, they should be asked to pay for this bailout. It should not be the middle class. To my amazement, some 48,000 people cosigned this petition, and the names keep coming in. The message is very simple: “We had nothing to do with causing this bailout. We are already under economic duress. Go to those people who have made out like bandits. Go to those people who have caused this crisis and ask them to pay for the bailout.”

"The time has come to assure our constituents in Vermont and all over this country that we are listening and understand their anger and their frustration. The time has come to say that we have the courage to stand up to all of the powerful financial institution lobbyists who are running amok all over the Capitol building, from the Chamber of Commerce to the American Bankers Association, to the Business Roundtable, all of these groups who make huge campaign contributions, spend all kinds of money on lobbyists, they're here loud and clear. They don't want to pay for this bailout, they want middle America to pay for it."

Maybe they can still work Sen. Sander’s proposal, after all the bailout money is already assured so what is wrong with improving the law or even do a further study on other possible course of action that will truly addressed the problem. Maybe it is also the best time to revisit the old oversight laws to make it more relevant in this difficult maze of complicated financial products that brought us this into this crises to never again allow the travesty to disrupt and threaten our economic future.

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Ameril Umbra Kato MILF’s Lost Comatose errr Command

If you think Eddie Gil the nuisance candidate in the Philippine presidential election is babbling or winging it, this nut case is worst sounding more like losing it incorrigibly babbling nonsense.

A four part video was uploaded by BangsaMoro of Ameril Umbra Kato which I think is a bad idea. Ask if it was true that he is a losing it errr a lost command his response was that he was hen pecked errr fake explaining further the definition of lost as if people have no clue what it meant instead of stating where he stands in the MILF’s command hierarchy. He rambles about people to be very careful in passing judgment if they don't know the “origin,” or "beginning," ayayayay talk about incorrigible babble. He probably meant unless people knew the facts they should refrain from passing judgement but how he babbles about "origins" and "beginnings" only makes it comical and he is not even a stand up comic.

In this youtube segment of the “interview” when asked if MILF are recruiting or are using child soldiers he denies it and yet rationalize that they cannot prevent a child from joining the movement on the basis of revenge if a child’s father was killed by the military. In his incorrigible babble he stated that in Islam minors are those below 10 years old and at 10 years old they are now obligated to follow the commandments of Allah and all the tenets of their faith.

Ameril Umbra Kato should stick to losing it errr being lost; I don’t think he is helping his cause on having Sharia law instituted in the failed MOA-AD that only validated people’s resistance to it when a 10 year old is “old enough” to be considered an adult. Whoever put a price tag of P10M to his empty head ought to reconsider this “tactic” to borrow Kato’s terminology, he is just not worth that much. On the other hand those under his command or other financial savvy people there like the KFR (kidnap for ransom gangs) may take advantage of the financial gain in giving up an incorrigible losing it commander.

Kato definitely has verbal communication problem and I suspect that the tiny mass ihat looks like his pea sized brain inside his thick coconut head which he thought was missing actually fell in the tip of his forefinger. No wonder he has over 100 criminal cases against him as he thinks with his forefinger and his lack of verbal communication he compensates with his trigger happy disposition.

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Black & Minorities the Usual Scapegoats in Sub-Prime Debacle

Clearly what the spin masters are doing is to add insult to injury that serves as a façade or smoke screen to cover up the greed and predatory lending practices of lenders and “naïve” wall street trading Mortgage-Backed Securities. The historical financial crisis that we are facing is just like a nightmare that haunts us. The difference is unlike a nightmare wherein you awoke disturbed you are relieved that it was just a bad dream. In contrast the financial crisis is so very real like a never ending nightmare and the fear is very real with nothing to hold onto in seeing a resolution. You fear the outcome and the future that is in store for us and our children and yet instead of resolving the crisis we see finger pointing that are baseless and ignorant at best while those corporate criminals responsible for the debacle appears to be rewarded instead of holding them responsible and accountable.

Typical disgusting finger pointing blames everyone else except the culprits are pointed at the black & minorities as the usual scapegoats in the sub-prime debacle that brought us to where we are. Leading the pack is Rep. Michele Bachmann to quote:

Rep. Michele Bachmann slammed CRA in an appearance on Larry King Live on Monday night. “Look at the housing crisis. Government has to take its share of the blame,” she said. “After all, the government was goading these mortgage lenders, saying, ‘You’re redlining. You’re being discriminatory. If you don’t give loans out to marginally credit-worthy people we’re going to come after you.’ In fact, Chairman Barney Frank has made comments like that as well.”

She continued, “The Democrat [sic] controlled Congress wants to have these mortgage lenders make loans to people with marginal credit. Well, guess what? If you aren’t making lending… it is not a shock when you have loans that aren’t paid back.”

Alexis Garrett Stodghill, of BlackVoices is not surprised which I quote:

Neil Cavuto of Fox News has gone on record as saying "Loaning to minorities and risky folks is a disaster," during discussions of what precipitated our economy's meltdown. And he is hardly the only one singing in this chorus of blame.

In essence, many seemingly intelligent leaders are suggesting that it is not the heads of financial firms who are to blame for the sudden economic crisis. People skilled in financial knowledge and forecasting, who sought new mortgage volume at all costs so that they could bundle these loans to create massive profits for themselves by selling them as securities. No, no, no. Their motives were correct and pure. They are the victims!

It is the stupid "minority" credit-seekers who strong-armed these entities into giving them money that they knew in their hearts they could not and would not pay back. It was their ignorance of the terms of their loans. Not perhaps the creation of overly complex mechanisms for lending, that were then intentionally not explained to trusting consumers who believed in the sales techniques of mortgage brokerage firms, which were preached like gospel. These "risky" customers knew that the entire financial system was resting on their shoulders, didn't they? How could they be so irresponsible?

Of course you will hear something from someone like Cavuto this kind of a spin just as Anna of HillBlogger pointed out in her entry “FOX NEWS spin of spins!” where she embedded the youtube making you wonder if the Fox news reporter was blind or simply don’t know how to count.

So much for the spin and using blacks and minorities as their scapegoats this NY Times article Subprime Loans’ Wide Reach by Bob Tedeschi shows otherwise which I quote:

WHILE subprime loans deeply penetrated low-income and minority groups, a new study suggests that more upper-income borrowers and more whites took out such loans than any other groups.

Compliance Technologies, a lending-industry consultancy, last month analyzed more than 1.9 million subprime loans originated in 2006, the height of the subprime lending frenzy, and found that roughly 56 percent went to non-Hispanic whites. Affluent borrowers, those with annual income at least 120 percent of their given area’s median income, meanwhile, took out more than 39 percent of the loans.

“I was surprised to see that non-Hispanic whites received more subprime loans than all minority groups combined,” said Maurice Jourdain-Earl, a founder and managing director of Compliance Technologies.

Still, African-Americans and Hispanics received subprime loans in a greater proportion than whites. Whites made up 71 percent of the borrower population in 2006 and received 56 percent of the subprime loans originated that year. Blacks, meanwhile, made up 10 percent of the loan pool, yet received 19 percent of the subprime loans. Hispanics constituted 14 percent of the borrower community and received 20 percent of the subprime loans.

The reasons behind the disparities have been hotly debated. Some lenders have argued that minority populations were merely less creditworthy than whites, while some minority advocates claim lenders and brokers discriminated on the basis of race. Mr. Jourdain-Earl, whose company is minority owned, did not speculate on the cause.

Researchers in the lending industry have not tracked how well members of different demographic groups have kept pace with subprime loans made in 2006. Lenders keep such data, but they have not shared it publicly.

I am not so sure if lenders are actually keeping tract on the demographics and unwilling to release the data. For one it is discouraged if not illegal to classify borrowers according to their race. One thing for sure though was that it is extremely difficult to service low income families due to the stringent requirements that is surely a hurdle in itself. On that account to come up with an assumption that blacks and minorities cause the sub-prime melt down is probably more anecdotal than factual.

In The Minnesota Independent article “Against all reason, Bachmann and others blame 1977 fair-lending law for adding to economic crisis” by Andy Birkley should shed some light on this nasty spin:

Janet L. Yellen, president and CEO of the Federal Reserve Bank of San Francisco, told Congress in April:
There has been a tendency to conflate the current problems in the subprime market with CRA-motivated lending, or with lending to low-income families in general. I believe it is very important to make a distinction between the two. Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans, and studies have shown that the CRA has increased the volume of responsible lending to low- and moderate-income households. We should not view the current foreclosure trends as justification to abandon the goal of expanding access to credit among low-income households, since access to credit, and the subsequent ability to buy a home, remains one of the most important mechanisms we have to help low-income families build wealth over the long term.
Interestingly, in 2005, just as the the explosion in subprime loans hit underserved neighborhoods, the Bush administration under pressure from banks changed the rules so that only banks with $1 billion in assets would be subject to CRA. The law was essentially gutted.

Robert Gordon of the American Prospect has traced the roots of the “blame CRA” meme back to Ron Paul supporters and crackpot conservative message boards, then to the conservative Washington Times and finally to Bachmann and other prominent conservatives. Talking Points Memo put together this video of conservatives blaming minorities for the housing collapse.

This is so pathetic, as if the hardship and difficulty of the blacks and minorities are enduring is not enough in the pursuit of the elusive American Dream they have the audacity to add insult to injury. The truth of the matter is that the rapid appreciation of home prices limited the ability of low income families to own their own home and as such to blame CRA as the culprit and the blacks and minorities that bankrupt the financing institution only shows ugly racist mentality. I guess it is easier to blame others than admit yes we were incompetent and allowed greedy criminal corporate entities to exploit and game the system to amass huge profits.

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