Sunday, September 28, 2008
Jimmah done it!
JJ made a comment the other day about Barney Frank, which I didn't get at first glance. Here's more on the story -- now it all starts to make sense. Is this what you had in mind, JJ? Youtube moment, and another one.
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I'm not sure if you guys caught it on those youtube clips, but one of the big cheeses involved in this meltdown was Jamie Gorelick, VP of Fannie Mae from 1997 to 2003.
Remember her? As #2 in the Reno Justice Dept, she is the one who drafted the infamous "wall of separation" memo that I think was one of root causes of 9/11 -- forbidding the CIA and the FBI to cooperate in catching the AQ boys, eg: the "Gorelick Wall" barred anti-terror investigators from accessing the computer of Zacarias Moussaoui, the 20th hijacker, already in custody on an immigration violation.
We are in good hands.
Counterpoint: "I know that there's going to be a glut of apartments that are going to be dumped in the multimillion-dollar range. They pay a lot for their mortgages. They've all got their children in . . . private schools. They all have a lifestyle. How are they going to keep this up? It's going to take their breath away, because they're going to have to deal with the reality that all the rest of us do. I think there's going to be a lot of people on the therapist's couch -- a very typical New York thing. People are going to start drinking a lot." The horror. The horror.
More on Jamie Gorelick--the GUT of Planet Pepe.
AI, sorry I was cryptic. I think it is well-known that Barney open the gates (ahem) to the idea of the "right to credit". This is perhaps a caricature of the his real view, but in a way it gets at the point. The feds started pushing banks to give loans to people they knew couldn't pay them off and then some side deal or chicanery put all the bad paper in Fannie and Freddie.
Now that the housing boom is over, that's a lot of bad paper and has triggered a run on the financial institutions that dealt in that paper.
The paper was traded as a commodity and that's maybe how Bear-Stearns and the rest got involved with what should have not been investment banks' business, but just commercial banks' interest.
This is a serious clusterfuck and no goddamned uptick fix is going to do much to fix it. Uncle Sam is going to buy a lot of houses till the real estate bust recovers, but the renter guy I posted a bit back says 12 years.
The right to credit is a right to capsize.
Here was something that made sense.
Jamie Gorelick will definitely win a Nobel Peace Prize
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