What caused the subprime mortgage meltdown?

UPDATE: Oct. 8, 2008:

One of the funniest and most politically searing comedy sketches in years has vanished from the Web site of NBC’s Saturday Night Live. Visitor comments asking about its disappearance are also being scrubbed from the Web site. The sketch — a harsh indictment of the housing meltdown that led to last week’s bailout bill — was clearly too much truth for someone to handle.

The seven-minute sketch featured a mock news conference of Democratic Congressional leaders on the bailout bill, during which Nancy Pelosi and Barney Frank inadvertently acknowledge that it was Congress that blocked reform and effective oversight of mortgage giants Fannie Mae and Freddie Mac.

Then SNL comic Kristen Wiig, playing Speaker Pelosi, introduces a parade of “victims” of the housing crisis. These “real Americans” include two jobless deadbeats who bought houses with no down-payment and a preppy couple who can’t flip the dozen time-share condos they bought as a speculative investment.

They were followed by actors portraying the real-life couple of Herbert and Marion Sandler. They explained how they built a mortgage company that specialized in subprime mortgages, which they sold to Wachovia Bank for $24.2 billion in 2006 — one of the worst acquisitions by any company ever. It helped precipitate the collapse of Wachovia last week.

The Sandlers were hustled off the stage by “Speaker Pelosi” after they said they couldn’t understand why they were invited to a news conference of “victims” since they had done so well out of the housing crisis.

They were followed by financier George Soros, identified as “Owner, Democratic Party.” The actor portraying Mr. Soros informs the group that the $700 billion bailout package “basically belongs to me” and that he has decided to short the U.S. dollar. That will trigger a devaluation “either Tuesday or Wednesday. I haven’t decided which yet. It will depend on how I feel.”

The brutally wicked sketch must have caused tremors in left-wing circles. The Sandlers and Mr. Soros have all been prime financial backers of independent political groups that have secured huge influence in the Democratic Party and helped fuel the rise of Barack Obama.

The Sandlers, for example, were major donors to the left-wing radio network Air America as well as the liberal housing lobby ACORN, a major player in pressuring banks into making more subprime mortgages. They also donated $2.5 million to MoveOn.org, the liberal group that insulted General David Petraeus as “General Betray Us” last year. Mr. Soros contributed a like amount. In turn, Eli Pariser, the head of MoveOn.org, was quite candid after the 2004 election about the influence this left-wing cabal hoped to exercise: “Now it’s our party: we bought it, we own it, and we are going to take it back.”

No doubt the Sandlers and Mr. Soros were displeased with the Saturday Night Live sketch. Herbert Sandler told the Associated Press that its portrayal of him as a predatory lender was “crap.” “We are being unfairly tarred. People have been telling us to speak out for some time, but we didn’t think it was appropriate. That was clearly a mistake.”

I suspect that some of the people the Sandlers have spoken to — or complained to — are the corporate overseers of NBC. That may explain why the bailout sketch has been airbrushed from the network’s Web site and will likely never be shown again.

That’s a shame, because rarely has political satire been more timely, pointed and, in many respects, so truthful.

— The WSJ Online.

 

 

The mainstream media was able to keep a lid on it for 30 years. Thanks to individuals in radio, FOX News and now a strong online communications source, we get a detailed picture of the redistribution of wealth that has gone on in America. It started under the cloak of the Fairness Doctrine and Jimmy Carter’s presidency with the Democrat Party controlling Congress, (like they do today).

This is from Artur Davis, a Democrat:

The current market crash was set in motion when Jimmy Carter and the democratic majority Congress passed the Community Reinvestment Act. The act actually gave INCENTIVES to low income borrowers to get home mortgages they couldn’t afford. In 1995 Bill Clinton revised the Community Reinvestment Act forcing banks to approve subprime mortgages even though it might result in defaulting on the loan, because borrowers couldn’t afford to keep up with the payments. The risk of defaulting on those loans was huge, but it was okay after Clinton’s revisions because he made it law that the government would back up the loans, like a co-signer. Banks then were FORCED to give out $1 Trillion in new SUBPRIME loans. Does that number sound familiar? It should. That is the exact amount being proposed to bailout the banks and financial markets today.

Artur Davis admits the democrats were at fault. The republicans, especially John McCain, warned in 2004 that tax payers would be stuck with the bill if something wasn’t done to correct the accounting fraud, and bad loans stemming from the Community Reinvestment Act. Republicans also warned in 2004 that Fannie Mae and Freddie Mac were at the center of the problem, and both agaencies were owned by the Federal government, so they had the power to stop the train before it crashed the stock market today. Democrats got angry, as seen the video above, and said there was no problem, so they blocked any effort to reform the lending practices, and now we have the stock market, and mortgage market crash that could cause another 1929 depression. The bailout will cost tax payers more than $4,000 each. Thank you democrat party for creating the worst financial disaster in our country’s history. To make things worse, Barack Obama says he’ll raise taxes if he is elected.