Spitzer/Paterson drama linked to predator banks?

This Spitzer/Paterson drama reveals more evil every day.

My brother/friend Albert Davis sent this article. It's written by a great journalist, Greg Palast, about the behind the scenes drama to get a new governor for the state of New York. This journalist is cool at the level of Chauncey Bailey, Edward R. Murrow, Hunter Thompson, and Gary Webb.

The $200 billion bail-out for predator banks and Spitzer charges are intimately linked

By Greg Palast
Reporting for Air America Radio's Clout

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 its 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."

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."

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.'

************
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.

The Assassination of New York Governor Eliot Spitzer

My beloved New York is now ruled by people who stood silent in the face of AIDS, crack and environmental racism found in Harlem, the land of the disempowerment zone.
New York is now controlled by men who are still silent on 80 election districts with ZERO votes for Obama, some of those districts in Harlem.
We are being legislated to death. It's up to us to save ourselves because the poverty pimps have been given the keys to the safe.
Bend over or stand up and fight. Wisdom says, stand up and fight.

I'm Shocked - Governor Spitzer is Corrupt!!!

Lori Price From Citizens For Legitimate Government http://www.legitgov.org/ wrote:

"Breaking: Spitzer's Sex Life Is Weapon of Mass Distraction for Bunch of Bad News for Bush 10 Mar 2008 By Lori Price On Monday, we learned: The Iraq war will top 3 trillion dollars; a former Pentagon official has written a book attacking the CIA and other US officials over the US-led Iraq war; 5 US soldiers were killed in a Baghdad blast; an Iraqi tribal leader - the head of an 'Awakening Council' - and three others were killed in a Diyala province suicide bombing; CIA torture will continue, per Bush; the House Judiciary Committee has filed suit to force two White House officials to provide information about the firing of U.S. attorneys; oil has soared to $108 per barrel; gas prices have reached a new record; a lawsuit has been filed claiming that the Fish and Wildlife Service is now in breach of its own mandate; an AP investigation has revealed that a vast array of pharmaceuticals are in the US water supply. But, here is the mainstream media's headline: Spitzer Is Linked to Prostitution Ring."

Lori, http://www.legitgov.org/ thanks for your great insight. Good catch. As I watch the news of the New York governor, I'm seeing scenes from Casablanca 'I'm shocked, there's gambling going on here...Here's your winnings sir...Thanks.'

Weapon of mass distraction is an understatement. Only fools are shocked that the governor of New York is corrupt. How else could there be 80 precincts, some in Harlem, with zero votes for Obama in this year's primary election and nobody in government says anything.

"Unofficial Tallies in City Understated Obama Vote -http://www.nytimes.com/2008/02/16/nyregion/16vote.html

Black voters are heavily represented in the 94th Election District in Harlem’s 70th Assembly District. Yet according to the unofficial results from the New York Democratic primary last week, not a single vote in the district was cast for Senator Barack Obama.

Counting the Results

That anomaly was not unique. In fact, a review by The New York Times of the unofficial results reported on primary night found about 80 election districts among the city’s 6,106 where Mr. Obama supposedly did not receive even one vote, including cases where he ran a respectable race in a nearby district."

The only real headline is

NY GETS IT'S FIRST BLACK GOVERNOR

but it will take a bit for folks to realize that.

Text From a 1989 New York Times Letter To The Editor Article
http://query.nytimes.com/gst/fullpage.html?res=950DE3DC173FF930A35754C0A96F948260

Still Waiting for That First Black Governor

Published: July 3, 1989LEAD: To the Editor:

To the Editor:

The article describing the opposition to the Bush Administration's nomination of William Lucas to head the Justice Department's Civil Rights Division errs in one respect (news story, May 10): You reported that ''Mr. Lucas, a Republican . . . would have become the nation's first black governor since Reconstruction had he won his 1986 campaign in Michigan.''

During Reconstruction, the decade between 1867 and 1877, the Federal Government, as a result of the passage of the 13th, 14th and 15th Amendments to the Constitution and other civil rights legislation, took steps to enfranchise former slaves for their participation in the nation's electoral process.

Blacks sought elective offices in local, county, state and Federal Governments. Blacks were elected to important positions and served as lieutenant governor, secretary of state, state auditor, speaker of the house, justice of the state supreme court, state superintendent of education and state senators and representatives by the hundreds. Between 1870, when Joseph H. Rainey was elected to the 41st Congress from South Carolina, and 1901, when George H. White, a North Carolina attorney, ended his second term in the 50th House, 22 black men served in the Congress.

But no black has ever been elected to a state governership in the en-tire history of the United States.

During Reconstruction, one black man came close. P. B. S. Pinchback was elected lieutenant governor of Louisiana in 1872 and served as acting governor when Gov. Henry Warmouth was debarred from his office during impeachment proceedings. Pinchback aspired to the governorship and had a chance at the nomination as the Republican Party split into two conventions. But instead the Legislature elected Pinchback to the United States Senate. However, his election was disputed and he was never seated. STANLEY TURKEL New York,

June 12, 1989

VIVA OBAMA 2008

There is one race. Human.

Don't believe the fuckry of a divide between Latinos and Blacks and Asians and Whites. That's just some Agricultural/Industrial Age divide and conquer drama.

Viva Obama 2008!!!
Viva the unity of the human race.

I Support Barack Obama As The Sixth Black President of the USA

See latest stories on Yahoo! News

We've already had 5 Black United States presidents which would make Barack Obama the sixth Black president of the United States according to Dr. Leroy Vaughn in his groundbreaking book BLACK PEOPLE AND THEIR PLACE IN WORLD HISTORY.

I support Barack Obama because he has clearly demonstrated the ability to bridge America into the best nation she can be. Networking all races, economic groups and religious styles is a powerful way to create constructive change.

We, the human race, are overcoming now. We have the answers to our problems, we just need the courage, the balls to implement what we know we must do in this, the information age when we are limited only by our imaginations, which are awesome.

Vote Obama '08. I am.