things are never black & white in national politics...it is
after all dirty business...this story seems to make sense..

Spitzer Was Silenced
Elliot's Mess And The $200 Million Bailout
By Greg Palast
3-14-8

While New York Governor Eliot Spitzer was paying an 'escort' $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators.

Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bush's man Bernanke was using ours.

This week, Bernanke's Fed, for the first time in its history, loaned a selected coterie of banks one-fifth of a trillion dollars to guarantee these banks' mortgage-backed junk bonds. The deluge of public loot was an eye-popping windfall to the very banking predators who have brought two million families to the brink of foreclosure.

Up until Wednesday, there was one single, lonely politician who stood in the way of this creepy little assignation at the bankers' bordello: Eliot Spitzer.

Who are they kidding? Spitzer's lynching and the bankers' enriching are intimately tied.

HOW? FOLLOW THE MONEY.

The press has swallowed Wall Street's line that millions of US families are about to lose their homes because they bought homes they couldn't afford or took loans too big for their wallets. Ba-LON-ey. That's blaming the victim.

Here's what happened. Since the Bush regime came to power, a new species of loan became the norm, the 'sub-prime' mortgage and it's variants including loans with teeny 'introductory' interest rates. From out of nowhere, a company called 'Countrywide' became America's top mortgage lender, accounting for one in five home loans, a large chuck of these 'sub-prime's.

Here's how it worked: The Grinning Family, with US average household income, gets a $200,000 mortgage at 4% for two years. Their $955 a month payment is 25% of their income. No problem. Their banker promises them a new mortgage, again at the cheap rate, in two years. But in two years, the promise ain't worth a can of spam and the Grinnings are told to scram - because their house is now worth less than the mortgage. Now, the mortgage hits 9% or $1,609 plus fees to recover the 'discount' they had for two years. Suddenly, payments equal 42% to 50% of pre-tax income. Grinnings move into their Toyota.

Now, what kind of American is 'sub-prime'. Guess. No peeking. Here's a hint: 73% of HIGH INCOME Black and Hispanic borrowers were given sub-prime loans versus 17% of similar-income Whites. Dark-skinned borrowers aren't 'stupid', they had no choice. They were 'steered' as it's called in the mortgage sharking business.

"Steering," sub-prime loans with usurious kickers, fake inducements to over-borrow, called 'fraudulent conveyance' or 'predatory lending' under US law, were almost completely forbidden in the olden days (Clinton Administration and earlier) by federal regulators and state laws as nothing more than fancy loan-sharking.

But when the Bush regime took over, Countrywide and its banking brethren were told to party hardy "it was OK now to steer'm, fake'm, charge'm and take'm."

BUT THERE WAS THIS ANNOYING PARTY-POOPER.

The Attorney General of New York, Eliot Spitzer, who sued these guys to a fare-thee-well. Or tried to.

Instead of regulating the banks that had run amok, Bush's regulators went on the warpath against Spitzer and states attempting to stop predatory practices. Making an unprecedented use of the legal power of 'federal pre-emption', Bush-bots ordered the states to NOT enforce their consumer protection laws.

Indeed, the feds actually filed a lawsuit to block Spitzer's investigation of ugly racial mortgage steering. Bush's banking buddies were especially steamed that Spitzer hammered bank practices across the nation using New York State laws.

Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its funder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup's Citibank made mortgage usury their major profit centers. They did this through a bit of financial legerdemain called 'securitization.'

What that means is that they took a bunch of junk mortgages, like the Grinnings, loans about to go down the toilet and re-packaged them into 'tranches' of bonds which were stamped 'AAA' - top grade - by bond rating agencies. These gold-painted turds were sold as sparkling safe investments to US school district pension funds and town governments in Finland (really).

When the housing bubble burst and the paint flaked off, investors were left with the poop and the bankers were left with bonuses. Countrywide's top man, Angelo Mozilo, will 'earn' a $77 million buy-out bonus this year on top of the $656 million - over half a billion dollars he pulled in from 1998 through 2007.

BUT THERE WERE RUMBLINGS THAT THE PARTY WOULD SOON BE OVER.

Angry regulators, burned investors and the weight of millions of homes about to be boarded up were causing the sharks to sink. Countrywide's stock was down 50%, and Citigroup was off 38%, not pleasing to the Gulf sheiks who now control its biggest share blocks.

Then, on Wednesday of this week, the unthinkable happened. Carlyle Capital went bankrupt. Who? That's Carlyle as in Carlyle Group. James Baker, Senior Counsel. Notable partners, former and past: George Bush, the Bin Laden family and more dictators, potentates, pirates and presidents than you can count.

The Fed had to act. Bernanke opened the vault and dumped $200 billion on the poor little suffering bankers. They got the 'public treasure' and got to keep the Grinning's house. There was no 'quid' of a foreclosure moratorium for the 'pro quo' of public bail-out. Not one family was 'saved,' but not one banker was left behind.

Every mortgage sharking operation shot up in value. Mozilo's Countrywide stock rose 17% in one day. The Citi sheiks saw their company's stock rise $10 billion in an afternoon.

And that very same day the bail-out was decided - what a coinkydink! - the man called "The Sheriff of Wall Street" was cuffed.

SPITZER WAS SILENCED.

Do I believe the banks called Justice and said "Take him down today!" Naw, that's not how the system works. But the big players knew that unless Spitzer was taken out, he would create enough ruckus to spoil the party. Headlines in the financial press, one was 'Wall Street Declares War on Spitzer' - made clear to Bush's enforcers at Justice who their number one target should be. And it wasn't Bin Laden.

It was the night of February 13 when Spitzer made the bone-headed choice to order take-out in his Washington Hotel room. He had just finished signing these words for the Washington Post about predatory loans:

'Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which he federal government was turning a blind eye.'

Bush, said Spitzer right in the headline: 'was the 'Predator Lenders' Partner in Crime.' The President, said Spitzer, was a fugitive from justice. And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.

Spitzer wrote: When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably."

FALLEN ON HIS OWN GUN

But now, the Administration can rest assured that this love story - of Bush and his bankers - will not be told by history at all ''now that the Sheriff of Wall Street has fallen on his own gun.''

A note on 'Prosecutorial Indiscretion.'

Back in the day when I was an investigator of racketeers for government, the federal prosecutor I was assisting was deciding whether to launch a case based on his negotiations for airtime with 60 Minutes. I'm not allowed to tell you the prosecutor's name, but I want to mention he was recently seen shouting: "Florida is Rudi country! Florida is Rudi country!"

Not all crimes lead to federal bust or even public exposure. It's up to something called 'prosecutorial discretion.'

Funny thing, this "discretion." For example, Senator David Vitter, Republican of Louisiana, paid Washington DC prostitutes to put him diapers (ewww!), yet the Senator was not exposed by the US prosecutors busting the pimp-ring that pampered him.

Naming and shaming and ruining Spitzer - rarely done in these cases - was made at the 'discretion' of Bush's Justice Department.

Or maybe we should say, 'indiscretion.'

************


www.GregPalast.com
Greg Palast, former investigator of financial fraud, is the author of the New York Times bestsellers Armed Madhouse and The Best Democracy Money Can Buy.

more...a different source

Spitzer Destroyed Over Of
Threat To Bush Cartel?
By Patrick Grimm
3-14-8

Jeff -
Here is more and very credible info on why the plug was pulled on Spitzer. Read his oped piece from the Feb. 14, Post and you can see that he was pointing the finger at the Bush crime syndicate. See the last paragraph. So it seems that Spitzer's true crime was stupidity -- how could he think that he would visit high-priced call girls and also attack the Bushinistas at the same time without being counterattacked? -- Jim
Predatory Lenders' Partner in Crime


How the Bush Administration Stopped the States From Stepping In to Help Consumers


(The following oped by Eliot Spitzer was published barely a month prior to the unfolding scandal and his demise as Governor of the State of New York. Does the scandal bear any relationship to Spitzer's intent to reveal the criminal nature of the subprime mortgage scam and the role of the Bush adminstration. Was the scandal intended to silence Eliot Spitzer?)

By New York Governor Eliot Spitzer
The Washington Post
Feb. 14, 2008
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.


Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.


But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.


Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans. Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers. [emphasis added]

The writer is governor of New York.

And Spitzer could have avoided it all by keeping his pants zipped.

Let us not complicate the conspiracy with common sense!

Oops Sorry, my mistake I forgot that Liberal Socialists are NEVER responsible for anything. No matter what happens it's always someone elses fault and usually the result of a conspiracy I bet it was some evil conservative who paid that girl to drug him, tie him to the bed and do awful things to him all against his will. They probably hired a person to imitate his voice on the phone and videotaped the whole thing so they could blackmail him. I am sure when the dust settles we will find out that it was a sting operation and he was working undercover for the FBI to try to trap the evil conservative who engineered the whole plot

gardenforge......

You are right ... It was an evil conservative who did all those things. Bush hired the evil conservative to bring Spitzer down!

definitely ----------- the evil conservatives did it !

am i the only one that caught that he was found out by

the illegal wire tapes permitted by the patriot act

do you really think the governor of new york

was on a terrorist watch list

or the ring that he used to get the services from

this is the beginning of the rape of the constitution

and no i am not protecting spitzer

but those in power are abusing it

Ah yes the conspriacy plot thickens, see my first post on how he could have avoided the whole mess This man was the Attorney Gerneral of NY at one time he knew the laws, he was aware of the fact there were wire taps used. He was aware that transfers of large sums of money off shore trip a report to the FBI. He was aware of the Mann Act. Unfortunately all these facts were not stored in the head he used to do most of his thinking.

I still don't care that the guy hired a few hookers, has nothing to do with governing a state, not like it was tax payers money;^]

so it does not bother anyone that the reason for legalizing

(unjustly)

wiretapping without a warrant

because of the big bad terrorist

is being used

to fulfill the agenda of a change in the power structure

do not get me wrong i do not care for spitzer

but he was subject to having his rights violated

no ifs and or butts (except those that passed the act butts that is)

if they wire tap anyone they do not want in power eventually they will amost all be out of power

and then they can install whom ever they wish

cause obviously the people do not know how to choose any longer

can anyone say electoral college

i know it just a conspiracy theory

Conspiracy all right - we just don't know which pr.ck was behind it!!

I thought the guy was caught when his bank reported him for shifting his money from account to account. It was my understanding that the bank thought they were on to some type of bribery.

He was Leah but lets not tell the liberals that I would hate to wreck a good conspiracy theory for them.

had to check the Carlyle connection...

turns out it was only Carlyle Capital who went under.
interestingly they just went public 10 months ago - $20/share
now worthless...hmmm? any chance this subsidiary was just
used to dump worthless bonds on the public pre-emptively
as Countrywide and related problems were coming to light?

doesn't appear to affect Carlyle Group much....SURPRISE!!

http://www.reuters.com/article/innovationNews/idUSN1651831320080317