Free Republic

Subprime Scandal: We've long suspected the Financial Crisis Inquiry Commission wasn't honest in examining events before the meltdown. But an ex-commissioner says the probe was actually a full-blown political cover-up. In a just-released book, former FCIC member Peter Wallison says that a Democratic Congress worked with the commission's Democratic chairman to whitewash the government's central role in the mortgage debacle. The conspiracy helped protect some of the Democrats' biggest stars from scrutiny and accountability while helping justify the biggest government takeover of the financial sector since the New Deal. Wallison's sobering, trenchantly written "Hidden in Plain Sight: What Really Caused...

Noted academics seem to view the Occupy Wall Street demonstrations as a means of recapturing the 1960s, particularly if they missed the latter decade on the first go-round. For one thing, the American Association of University Professors (AAUP) has endorsed them. “The AAUP’s Council and Collective Bargaining Congress endorsed the Occupy movement last week–a move that, judging from the volume and intensity of e-mail responses, evoked strong feelings among our membership,” Gwendolyn Bradley writes on the Academe Blog. “For many reasons–including the fact that student access to higher education is increasingly threatened by mounting costs and loans and the fact...

Perry sounds off on immigration, war By: Molly Ball August 20, 2011 04:14 PM EDT ROCK HILL, S.C. — Taking questions from reporters for the first time since Monday as he wrapped up a campaign swing here, Texas Gov. Rick Perry defended and expanded on his record on immigration policy — a record with positions that some of the Republican base rejects. As governor, Perry’s supported allowing illegal immigrants to get in-state tuition rates at Texas universities and opposed Arizona’s strict state immigration law — despite signing a law in Texas that critics call similarly repressive. “Here’s what you need...

In January 2009, I wrote that the housing crisis was mostly a consequence of the private sector. Why? US Agencies appeared to be responsible for only 20% of all subprime, Alt A and other mortgage exotica. However, over the last 2 years, analysts have dissected the housing crisis in greater detail. What emerges from new research is something quite different: government agencies now look to have guaranteed, originated or underwritten 60% of all “non-traditional” mortgages, which totaled $4.6 trillion in June 2008. What’s more, this research asserts that housing policies instituted in the early 1990s were explicitly designed to require...

Faisal Shahzad, Subprime Terrorist?Well, one way of falling behind with your house payments is to take half a year off to go to Pakistan and train in a terrorist camp.  The story of the Times Square bomber reads like some Urdu dinner-theater production of Mel Brooks’s The Producers that got lost in translation between here and Peshawar: A man sets out to produce the biggest bomb on Broadway since Dance a Little Closer closed on its opening night in 1983. Everything goes right: He gets a parking space right next to Viacom, owners of the hated Comedy Central! But then...

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission on Friday charged Goldman Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product related to subprime mortgages. The SEC alleged in a lawsuit that Goldman structured and marketed a collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities. However, it failed to disclose the role that a major hedge fund, Paulson & Co., played in the portfolio selection process as well as the fact that the hedge fund had taken a short position against...

In the Medieval era -- when the periodic table of the elements was comprised of only Fire, Earth, Air, and Water -- alchemists posited the existence of a fifth magical substance, Quintessence, which when mixed in combinations of the other four would create every other form of matter. They searched in vain for this ethereal substance in their pursuit of a means of changing base metals into gold. Their quest went unrealized, but this magical quintessence was subsequently discovered five centuries later by the new alchemists: mortgage bankers and investors. They found a way to turn worthless mortgages into hordes...

Barney Frank wants credit for putting out a fire that he helped to start. President Obama has declared an era of responsibility. But to Democrats responsibility means blaming Republicans for everything that goes wrong. Aside from the President himself, perhaps no Democrat is more eager to lay blame at the doorstep of conservatives than Barney Frank, Chairman of the House Financial Services Committee. I bore witness to Frank's song and dance routine during a talk he recently gave at Harvard University's John F. Kennedy School of Government. A video of the forum can be found here. (http://www.hks.harvard.edu/news-events/news/articles/forum-frank-apr09) It is worth...

Just how did Americans come to lose $10 trillion in real estate and stock wealth?....And it was Clinton who initially spread the subprime rot to Wall Street. To help Fannie and Freddie reach their "affirmative action" lending quotas, HUD in 1995 let them get affordable-housing credit for buying subprime securities that included loans to low-income borrowers. Less than two years later, Freddie partnered with Wall Street investment banker Bear Stearns to issue the first securitizations of low-income CRA loans. There's even a press release still available on the Web that memorializes the historic deal, which dumped hundreds of millions of...

In what is apparently the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street rating firms, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country.

If you thought Hillary Clinton's government takeover plan for health care was bad, wait 'til you see what she has in store for the housing sector. As always with the Clintons, the market is the problem and Big Nanny is the solution. Unfortunately for taxpayers, Hillary has bipartisan company in the Bush administration on this issue. Their election season prescription? Rewarding bad behavior. Punishing responsible behavior. Doing more harm than good. In case you've been living in a cave, there's a painful credit crunch underway. The culprit is the subprime mortgage -- a species of risky home loans to buyers...