You can’t swing a cat at Obama HQ without hitting a subprime, junk mortgage failed bank executive or owner. Obama’s economic adviser Franklin Raines, was fired as CEO of FNMA after scandalously faking results to hike management bonuses. Jim Johnson, leading Obama’s VP selection committee, was also a graduate of the dismally failed FNMA CEO office. You may not have been introduced yet to another subprime failed banker haunting the Obama campaign HQ. Meet Obama’s Finance Chair and former owner of failed Superior Bank of Chicago Penny Pritzker. Her bank closed amidst harsh criticism of the promotion of subprime mortgages by Pritzker. Massive fines were levied.
Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.” In other words, if you traced today’s sub-prime crisis back to its origins, you would come upon the role of the Pritzkers and Superior Bank of Chicago.
Barack Obama has slammed the banking industry for its predatory use of sub-prime mortgages, which are pushing millions of American homeowners toward foreclosure.
But his campaign’s Finance Chair, Penny Pritzker, owned a failed Chicago thrift that helped pioneer sub-prime financial instruments and faced accusations of abuse.
Superior Bank of Chicago went belly up in 2001 with over $1 billion in insured and uninsured deposits. This collapse came amid harsh criticism of how Superior’s owners promoted sub-prime home mortgages. As part of a settlement, the owners paid $100 million and agreed to pay another $335 million over 15 years at no interest…
But this seven-year-old bank failure has relevance in another way today, since the chair of Superior’s board for five years was Penny Pritzker, a member of one of America’s richest families and the current Finance Chair for the presidential campaign of Barack Obama, the same candidate who has lashed out against predatory lending.
Though Superior Bank collapsed years before the current sub-prime turmoil that is rocking the world’s financial markets – and pushing those millions of homeowners toward foreclosure – some banking experts say the Pritzkers and Superior hold a special place in the history of the sub-prime fiasco.
“The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages,” Timothy J. Anderson, a whistleblower on financial and bank fraud, told me in an interview.
“The sub-prime mortgages,” Anderson said, “were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits. Superior’s owners were to sub-prime lending, what Michael Milken was to junk bonds.”
In other words, if you traced today’s sub-prime crisis back to its origins, you would come upon the role of the Pritzkers and Superior Bank of Chicago.
Raines, Johnson, Jamie Gorelick, Pritzker, Bill Clinton, Chris Dodd, Barney Frank, Obama’s colleagues, AND Obama – the number 2 recipient of political donations from the failed FNMA scam, are big reasons why mortgages written or bundled by FNMA, FMAC, Superior, and other banks do not perform; and why you are about to buy them for $1 trillion! These depth charge mortgages, enthusiastically encouraged by the Obamasite gang, are the reason for the present banking crisis, which Obama blames on McCain failing to regulate the banks.
Nothing could be further from the truth. Chris Dodd, the largest cash recipient of FNMA, squelched Bush’s attempt of 2003 to impose regulation on FNMA, as chairman of the Senate Finance Committee. Barney Frank blocked similar legislation from his banking post in the House, at about the same time. McCain himself called for housecleaning at Freddie and Fannie as recently as 2006.
The efforts of Obama and colleagues, bankers and politicians, encouraged the junk mortgages as a means to encourage minority homeownership.
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Hot Air has the story Whose policies led to the credit crisis?
H/T: Canada Free Press Obama’s Role in the Economic Crisis
Michael Barone, Rasmussen Reports: The Old Economic Rule Doesn’t Work
From Washington Prowler Fanny, Freddie, and Obama
H/T: Over-the-Hill Oracles The Obama-Fannie-Freddie Connection
“How can Obama go out with a straight face and saw it was Republicans who made this mess, when it is his key advisers who ran the agencies that made the big mess what it is?” says a Democrat House member who supported Sen. Hillary Rodham Clinton. “It’s his people who are responsible for what may well be the single largest government bailout in history. And every single one of them made millions off the collapse that are lining Obama’s campaign coffers. If the McCain campaign lets this one go, they deserve to lose.”
It isn’t just Fannie Mae where Obama has a problem. Another close political adviser, in fact the one man responsible for rallying support for Obama early on among Congressional Democrats, is Rep. Rahm Emanuel, who served on the Board of Directors for Freddie Mac after leaving the Clinton White House. According to Freddie Mac insiders, Emanuel during his time on the board opposed every reform proposed by the Bush Administration that would have impacted Freddie and Fannie Mae.
Emanuel claimed to be neutral in the primary race between the wife of his old boss and his longtime Chicago acquaintance, Obama. But the chairman of the House Democratic Caucus, who would be first in line for the vacated Senate seat of Obama should he win the presidency, quickly dumped Clinton when it was clear Obama had a head of steam for the nomination.
“We ought to be able to — rightly — hang the Fannie and Freddie scandal around the neck of Obama, if they can get out in front,” says a House Republican. “Middle-class folks’ mortgages are probably safe, but the American taxpayer will also be paying for this scandal for years to come.”
Don’t miss yet another Fannie Mae failed CEO, Daniel Mudd, calling Obama and the Dems “Family;” video below.