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The Truth and Nothing But...

A Monthly Journal


Updated on 4/6/2009
rmfpolitics@gmail.com

Currently Under Construction

When 50% of our society is presented with news that is either spin, lies, or propaganda while the other half is presented with the truth, the result is major conflict.

Do you want to live in a dream world or do you want the truth? The truth is a very powerful anecdote.

Our goal at "The Truth" is to take current stories that are presented by the radio or TV and try to unveil the truth.  So what is the truth?  Could one segment of society be driven by one form of media and the other driven by a second media?  Confusing isn't it, how reality can become just mirrors for a story developed for a sitcom series.   No truth in content, just content written by professional spin-makers who re-create the characters and events in a plot.  Hmmm......, is that possible?  And would you call it news?



As of 03/03/2009, I am sure that there are least two news worthy stories that every American has heard about from their personal source for news information.  The first is the Worldwide Economic and Financial Market Meltdown.   The second is the Subprime Mortgage and Derivative Debacle.  Both events are touching millions of people all across the world, from the poor, to the outrageously wealthy, no socio-economic group is unscathed.   The two linked events are currently being presented by the national radio and TV media as two separate stories.   It may be occurring this way because the magnitude of the crisis is still beyond comprehension.   How do you wrap your head around a figure that could be double, triple, or four times the total GDP (Gross National Product) for the entire world?  The world’s GDP was estimated in the year 2000 as 30 trillion dollars, of which 1/3 of that figure is accounted for in the United States.  How do you talk intelligently, about that amount of money?   Millions of people, old and young, will be affected by these interrelated events in one way, shape, or form within their lifetime.

The single event that has worldwide economies and financial markets all over the planet reeling, actually begins as a concept that was conceived to unravel the Savings and Loan financial crisis of the 1980’s and 1990’s.  They were called derivatives or collateralized debt obligations (CDO’s) or swaps and they were developed by William Seidman, former chairman of the FDIC and the Resolution Trust Corp.   The vehicle solved the crisis at the time, but it opened a Pandora’s Box that is just being felt today.  Alan Greenspan the  Federal Reserve Chairman at the time, made duplicate keys that allowed the plague to be grown artificially, outside of the box, for use in the free market.  He embraced the new concepts and passed the plague to financial institutions and Wall Street.  William Seidman warned Alan Greenspan that these derivatives should be regulated, but his words fell on deaf ears.  It is now documented that the CDO’s created from other CDO’s were also responsible for the 2000 credit crisis and dot-com bubble.  These concepts unregulated would become the engine that would drive the world economies into turmoil.   In comments made in USA Today on May 8, 2003 by Alan Greenspan defended derivatives in response to Warren Buffet’s warnings:


Greenspan Defends Derivatives  


 On November 10, 2008, Bill Seidman was a speaker at the Securities Industry and Financial Markets Association's Summit on the Troubled Asset Relief Program he said and I quote:

"These things do go by," he said, "but that's not to take away from the fact that this is the worst financial crisis since the Great Depression. In one sense it's worse than the Great Depression, since it's far more complicated for governments to handle."


Seidman then went on to list the main reasons (in no particular order) for the economic crisis and financial meltdown:

Read complete Seidman Article

Creating CDOs from other CDOs creates enormous problems for accounting transparency since it allowed large financial institutions to move debt off their books by pooling their debt with other financial institutions and then bringing these debts back on to their books calling it a Synthetic CDO asset.  This has not only allowed financial institutions to hide their losses, but has allowed them to inflate their earnings.  This has the unfortunate effect of doubling potential losses book-wise.


A better analysis of CDO’s is provided by the following two articles:


1.   Standing Armies in Modern Finance  
 

2.   Trading Credit Derivatives


In effect, the CDO’s were acting as the financial engine that was driving a ton of very dangerous cylinders that were being fueled by toxic Predatory sub-prime mortgages.  The warning bells that were rung by Seidman and Buffet through 2003 were muffled by Allan Greenspan and the Bush Administration.

If I was to tell you that the whole event had been solved by the efforts of Eliot Spitzer back in 2003, would you believe me?   That is a loaded question and the simple truth was published by Eliot Spitzer on February 14, 2008 in the Washington Post.   In addition, if I told you that shortly after the article ran in the newspaper, Eliot Spitzer resigned from his post as Governor of New York, would you believe me?   Is it possible that there is a link between the two events?  Here is the story by Eliot Spitzer that appeared in the Washington Post.



Predatory Lenders' Partner in Crime by Eliot Spitzer


On September 26, 2003 the Bush Administration and the OCC retaliated against the 50 state attorney generals’ and the state banking superintendents.  In an article published by the USFN in the Summer of 2003 they stated the spin that would be used by the attorney’s representing the Mortgage Industry to begin the proceedings that would reverse the work that was done and spearheaded by Eliot Spitzer. 

http://www.favoritethings.com/ State_Based_Legislation


In addition the OCC put the final touches on legislation and published a 73 page document, Docket No.03-16; Notice of Proposed Rulemaking, 68 Fed. Reg. 46119 (2003).  This hogwash set the Federal Regulatory stage for the reversal of Predatory Lending legislation that was already in place across the United States. Interesting reading, but lengthy: 


Final OCC Ruling, Overturning of State Laws on Predatory Lending

Appendix on OCC Ruling that Overturned State Laws on Predatory Lending

In response to the OCC in 2004, Eliot Spitzer started his own legal proceedings to try and stop the OCC from reversing the legislation done by the states on Predatory Lending.  The article is from the Dyersberg State Gazette with input from the Wall Street Journal.


New York lawsuit may revise national bank rules; affect lending practices


In addition to Eliot Spitzer’s efforts, on August 26, 2003 a conference was convened by the State Bank Supervisors (CSBS).  Their premise at the conference stated that, “Federal law does not preempt state authority to license and regulate mortgage lenders for purposes of consumer protection.” 


Supported by 35 attorney generals and 43 state bank commissioners they filed an amicus brief in support of Connecticut Banking Commissioner John P. Burke in Wachovia Bank N.A. and Wachovia Mortgage Corporation v. John P. Burke, Civil Action No. 303 CV 070738 (JCH). The suit was started in the U.S. District Court for the District of Connecticut.

The Conference of State Bank Supervisors is the professional association of state officials responsible for chartering, supervising, and regulating the nation's 6,000-plus state-chartered commercial and savings banks, and more than 400 state-licensed foreign banking offices nationwide.   The news release by CSBS in 2003 reads as follows:


35 States File Amicus Brief in Wachovia Vs. Burke Case

Over the next 1 ½ years Eliot Spitzer tried to reverse the OCC regulatory meddling.  In an article at Consumeraffairs.com published on June 17, 2005, he tried to publicize the important facts to the public.


http://www.favoritethings.com/Spitzer Charges Feds Conspiring on State Consumer Laws


In a blog during this two year period posted at http://www.uslaw.com/library/Banking_Law/Eliot_Spitzer_Idiot.php?item=50310 and I quote:

Someone needs to hit Eliot Spitzer with a Thorazine dart, slap a straight jacket on him, and strap him to a gurney before his Bush Derangement Syndrome causes his head to explode. Not that if that happened, any bystanders would be splattered with gray matter, but when a vacuum is breached, the concussive effects of the implode can be devastating. Ask anyone who saw Britney Spears on Rodeo Drive last Saturday sporting an English accent.

Spitz's latest meltdown is a doozy. His opinion piece in todays edition of The Washington Post tips over into the abyss of downright falsehood.


After laying out the contention that he and "49 other" state attorneys general several years ago saw an increase in predatory lending practices so vast that those practices "threatened our financial markets,"  he alleges that the Bush administration not only looked the other way, it actively campaigned to protect predatory lenders by thwarting Eliot Mess and the rest of the Unmentionables in their pursuit of the bad guys.


Eliot Spitzer, State attorneys’ from around the country, State bank commissioners and supervisors could not stop the Bush Administration, The U.S. Treasury, or the Feds Allen Greenspan from continuing to fuel the toxic CDO’s that Bill Seidman had warned about after the Saving Loan Debacle.   Financial firms on Wall Street and AIG continued to participate in the greed and hysteria that encircled the derivative marketplace by insuring  each toxic vehicle.  Unregulated, the banks, arm in arm with the investment firms continued to drive the limo that was heading at 140 mph toward the precipice. 


It should be noted that the Bush Administration changed the mandates for the OCC, not only using the Patriot Act in 2003, but it also used an obscure 1863 National Bank Act.  This allowed the OCC to issue the formal reversal that stopped the states from doing their own regulating and discouraging predatory lending practices.   Look at the expanded role that the Bush Administration gave to this regulatory agency.


Office of the Comptroller of the Currency

It should be noted that OCC also served as a director of the Neighborhood Reinvestment Corporation.   Very weird to say the least, a government agency having direct ties to the Neighborhoods of America.  I wonder if this had something to do with the sub-prime mortgage debacle?


Eliot Spitzer rose to prominence and became Governor of the State of New York by going after Wall Street, Predatory Lending, and the Bush Administration.  As a champion of the public’s interests you would think that Spitzer would have been given a special commendation for his service to our country.  Unbelievably, look how the Bush Administration decided to meritoriously award Eliot Spitzer.


On March 10, 2008, the same newspaper that published the “Predatory Lenders' Partner in Crime” reported that Spitzer patronized a high-priced prostitution service called Emperors Club VIP.   The report by the New York Times said, that he met for over two hours with a $1,000-an-hour call girl, singer going by the name Ashley Rae Maika DiPietro (born Ashley Youmans).  This information was originally obtained by authorities from an illegal federal wiretap.  The damning story also said that Spitzer had at least seven or eight liaisons with women from the agency over six months, and paid more than $15,000.  According to other published reports, investigators believe Spitzer paid up to $80,000 for prostitutes over a period of several years while he was Attorney General, and later as Governor.  Spitzer first drew the attention of federal investigators when his bank reported suspicious money transfers, which initially led investigators to believe that Spitzer may have been hiding bribe proceeds. The investigation of the governor led to the discovery of the prostitution ring.


On March 12, 2009 Governor Eliot Spitzer announced that he would step down as Governor of New York effective on noon, March 17, 2009.  Would you call that swift retribution?  Did you ever hear about the article he published in the NY Times?  Are you seeing how ex-President George Bush used the Patriot Act and the extended FISA?


It isn’t unusual to note, that the same OCC that stopped the states from regulating and discouraging predatory was also involved in authorizing Eliot Spitzer’s bank to spy on his banking activities.   They said, this would be done because the activity could have something to do with illegal pay-offs.   So Bush’s Patriot Act called the Uniting and Strengthening America by “Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act” of 2001 was actually the act that brought down a citizen of the United States and then Governor Eliot Spitzer.  Convenient…..


As further background on the Eliot Spitzer case and his resignation as Governor of New York here is an article by Alan Dershowitz that was in the Wall Street Journal on March 13, 2008, “The Entrapment of Eliot Spitzer.”


The Entrapment of Eliot Spitzer

In March of 2009 John McCain, Senator from Arizona asked for a Congressional investigation of what caused the financial
market and sub-prime mortgage melt-down fiasco??   Senator McCain, respectfully, repeal the FCC regulation that allows the news media to hide important news, while hiding behind their corporate mirrors.



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