“The Hammer” Strikes Again and Soon Again!!!
Big news: His E-Book Coming
I am very pleased and thankful that David Fiderer, who I dubbed the “Hebrew Hammer”-- for his super researched and tough GSE prose--is letting me publish the précis of his long awaited e-book, which everyone following this financial and political drama will want to read and re-read. (His e-book, shortly will follow, possibly in just days.)
David and I have become friends and political intrigue buddies and, likely, I have sent him more emails in the past two years than I have my entire family in all of their lives. I appreciate that he’s shared with me his many F&F revelations.
Federer’s GSE work—rightly so-- nails a lot of responsibility and blame on former Bush Treasury Secretary Hank Paulson for his tortured HERA charades, but then shows how Paulson’s successor, Obama Treasury Secretary Tim Geithner, rode with the same dubious script to the highly undesirable and legally questionable “Third amendment sweep.”
Fiderer’s e-book supports his allegations with publicly available documents.
Without further ado.
From the desk of David Fiderer.
The conspiracy to destroy Fannie Mae is not a
conspiracy theory, which would be based on a series of suspicious-looking dots that appear to connect. The damning evidence is much more precise and concrete, and quite apparent when you follow the flow of funds, the debits and credits, and the repayment of principal and interest.
It is impossible to compare the public statements with Federal statutes and regulations and numbers and avoid the inference that a lot of high ranking officials at Treasury, the SEC and FHFA (and its progenitor, OFHEO) lied to Congress and to the public. (The most
damning public documents in relate to the disinformation campaign brought
against Fannie Mae beginning in 2002. So, while the legitimacy of Freddie Mac was also targeted by government officials, the focus here is on the
well-documented conspiracy against Fannie.)
The mendacious Third Amendment
scheme did not emerge out of a vacuum. Indeed, the saga may be divided into three interrelated conspiracies, akin to three acts in a Shakespearean drama. They are:
Act I: The conspiracy to fabricate the Fannie Mae "accounting scandal,"
Act II: The conspiracy to fabricate a fraudulent justification for placing the GSEs in conservatorship, and
Act III: The conspiracy to prevent the
GSEs from ever emerging out of conservatorship.
The fraudulent meme--that the
GSEs were on the verge of collapse in September 2008, so that conservatorship was imperative--was devised by the same people who devised the fraudulent meme known as the Fannie Mae accounting scandal, using the same modus operandi, which perverted the meaning of "safety and soundness."
The fraudulent meme—that the government had a mandate to severely downsize the GSE business footprint as an interim step to final abolition--is embedded in Treasury's official policy, which forbids any discussion of the possibility that the GSEs might recapitalize.
This policy, which remains in force, was first set by Timothy Geithner in a report sent to Congress on February 11, 20011.
The report, "Reforming America's Housing Finance Market," offered three different legislative proposals:
1. Abolish time GSEs, so that the vast majority of
mortgages would be financed through private sources; or
2. Abolish the GSEs, so that the vast majority of mortgages would be financed through private sources, except during a severe downturn, when the government would intervene to stabilize the market; or
3. Abolish the GSEs and replace them with a
government-run mortgage insurance company, which relied on private insurers
taking the first loss.
Only Congress had the power to revoke the GSE
charters, which were set by Federal statute. And since GSE abolition is the starting point for any type housing finance reform, legislative action was imperative.
Shawn Tully described Geithner's policy in Fortune:
"Geithner's position enjoyed remarkably wide support from lawmakers, regulators, and economists across the political spectrum. The prevailing --virtually universal -- view was, and still is, that the twin colossi of housing finance that stuck taxpayers with a $189 billion bailout bill after their collapse in 2008, that inflated the real estate bubble with artificially cheap credit and hence helped sink the U.S. economy, should never, ever be allowed to regain their former dominance."
Tully reminds us of H.L. Mencken's immortal
words, "The intelligent, like the unintelligent, are responsive to propaganda."
Nothing about that paragraph survives scrutiny
• Not the $187 billion bailout bill,
• Nor their 2008 collapse,
• Not their contribution to the real estate
• Not their artificially cheap credit,
• Not their role in sinking the Economy.
None of it can withstand a modicum of fact checking.
Tully accurately described the scope and magnitude of The Big Lie Industrial Complex, which is largely financed by Koch Brothers think tanks such as the American Enterprise Institute and the Mercatus Center, and which extends or beyond the Treasury Department to America's elite business schools, the Republican Party, and a multitude of media outlets intent of distracting the public from the magnitude of Wall Street fraud.
What Others are Saying
While several items have appeared while I was out of the office, the one I think most intriguing was this from Trey Garrison’s Housing Wire, in which former Delaware Attorney General, Myron Steele, argues in an amicus filing that Delaware State law—under which F&F operated—invalidates the “Third Amendment sweep.”