Elizabeth Warren on the Foreclosure Crisis
Elizabeth Warren is the only person I’ve seen in Washington D.C. that is both aware of what consumers are facing today, and I believe truly cares about homeowners in this country. She gets it in ways that no one else in government does, and she appeared just a few days ago on PBS to talk about the new agency and the foreclosure crisis. And I found it breathtaking to watch, and hear what she she had to say.
“It’s about respect. I believe that the American people ought to be part of the conversation about what’s happening in our economy, and what’s happening in Washington D.C. and what’s happening on Wall Street. I truly believe that if the insiders get together and rewrite all the rules, those will be rules that will benefit the insiders and the rest of America will just be left out of it.”
She was asked whether she believes that Tim Geithner is right about the way he’s handling the commercial real estate meltdown that’s around the corner. She responded by saying:
“We have not seen a strong response from Treasury. I hope he’s right, but I would feel better if I saw more action, if we saw some plans in place. It is our job in oversight not to say ‘Oh good, let’s relax!’ Our job in oversight is push and say these are problems, and show us what you’re doing here, and we do this on behalf of the American people.”
She described it as a downward spiral. (Sound familiar?) She knows what’s ahead and she knows it doesn’t look good. People… she is our one true real hope. We need her now, and if we can’t make her the President of the United States, we must make sure she is allowed to establish and lead the consumer protection agency of which she conceived. It is only because of her that the agency will exist, and to pretend that there is anyone else to lead it, would be a travesty and a tragedy on an historic scale.
I pray… literally pray… that all of you reading me take the time to write to the White House and to your elected representative telling both that her appointment is the single most important thing to you… and to all of us.
At the end of her interview, and I hope you’ll watch every single second of it as it appears below… she admits that she doesn’t know whether it’s possible to push back against Wall Street’s power, and she admits that many have told her that it is not. But, I’ve never felt more in-sync with anyone as when she utters her last words, saying: “I don’t know. I just refuse to give up.”
I was told by someone inside the beltway, as they say, that Treasury Secretary Tim Geithner is still working hard to oppose her appointment to lead the new consumer protection agency. I’ve also been told that Larry Summers will also oppose her appointment.
These are the two guys who have bailed out the banks at every turn, and don’t want to see anyone question those banks, or limit what they’re allowed to do to us, in order to become solvent again.
The banks, however, are no more solvent today than they were a year ago. The toxic assets… remember the “toxic assets”… are right where they were in October of 2008. Geithner has not dealt with that problem. It is abundantly clear that his plan is to allow the banks to continue crippling our economy until they can make enough money to return to solvency.
But, and please listen when I say this, and go check it out for yourself if you don’t believe what I’m about to say… Japan took that approach and it took their banks over a DECADE. It could take our banks even longer.
My daughter is 14. How old are those that you love? We are literally staring down the barrel of a DECADE LONG GUN RIGHT NOW. Geithner cannot be allowed to continue doing what he’s doing to this country.
Last year, we spent more than $4 trillion propping up the banks, and we are no better off today than we were then. In fact, as everyone will know in a matter of months, if they don’t know it already, we are much worse off than we were a year ago.
It’s not just about the TARP for $700 billion, by the way. The TARP was just the beginning. The rest is not covered by the media, but you can look it up for yourself. Try Googling the following, because these are all programs Geithner and Summers and the Obama Administration have established and approved… quietly.
TLGP (Temporary Liquidity Guarantee Program) This was set up by Geithner and Bair. It guarantees certain types of debt issued by financial institutions, and deposits in certain accounts. Thousands of banks are participating in this program. ALLOCATED: $1.5 TRILLION
GSEP (Government Sponsored Entity Purchases) This was set up by Tim Geithner and Ben Bernanke. It allows the Federal Reserve to being purchasing the toxic debt issued by Fannie and Freddie. ALLOCATED: $1.4 TRILLION
CPFF (Commercial Paper Funding Facility) This program was established by Geithner to fund the commercial paper market after Lehman’s demise. Commercial paper can be thought of as short term loans that many large companies use to cover payrolls. It was funded by the Federal Reserve Bank of New York… Geithner was the President of the Federal reserve Bank of New York before becoming Treasury Secretary, by the way. They say this program is closed, but how do we really know? ALLOCATED: $1.4 TRILLION
TALF (Term Asset Backed Securities Loan Facility) Geithner and Bernanke set this up last year to loan money to banks that offer bundled loans to small businesses and consumers. The hope was that it would make it easier for people to get car loans, student loans, and other forms of credit. Did it work? Maybe a little, but it sure didn’t fix anything. ALLOCATED: $200 BILLION
TAF (Term Auction Facility) A program whereby the Federal Reserve auctioned funds to depository institutions. Bids are submitted by phone through local Federal Reserve banks, and all advances must be collateralized, but how do we know what’s passing for collateral these days. ALLOCATED: $600 BILLION
AMLF (Asset Backed Commercial Paper Mutual Fund Liquidity Facility) This program provides loans to banks so they can buy certain types of commercial paper from money market mutual funds. The goal of this program was to make it easier for the funds to pay the investors that wanted to cash out. ALLOCATED: $1.6 TRILLION
FEDS (Foreign Exchange Dollar Swaps) This is a program whereby the Federal Reserve goes around the world offering dollars to the European Central Bank, the Swiss National Bank, the Bank of England and other central banks. These banks can print Euros, Francs, Pounds, etc. but not dollars. The european banks give the Fed their own currencies to hold, and then lend the dollars to other banks in an attempt to ease the strain in those banks. ALLOCATED: UNREPORTED AMOUNT SPENT AS OF A YEAR AGO: $420.26 BILLION
PDCF (Primary Dealer Credit Facility) This is an overnight loan facility that provides funding to primary dealers in exchange for any tri-party-eligible collateral. The purpose is to keep the markets functioning. Loans are taken out for one day, but new loans can be taken out each day. ALLOCATED: UNREPORTED SPENT: UNREPORTED
Still think it’s all about the TARP funds?
People have called me and said… “But the banks paid back the TARP funds, doesn’t that mean they’re doing better?” And I’ve replied: No, I’m afraid not. It just means they wanted to have the restrictions on executive pay lifted, and only the TARP funds place such restrictions on the banks. The rest of the programs above don’t place any restrictions on anyone.
Tim Geithner and Larry Summers are directly responsible for the situation we are in today. It’s worsening and worsening faster than ever. Don’t wait until you actually feel the pain to take action, because by then it will be too late, if it isn’t already.
Oh, and stop listening to the double dip nonsense. It’s not true. We won’t have a double dip, because we never had a recovery. We’re in the same downward spiral we went into in 2007. Elizabeth Warren knows this, but she also knows that government cannot continue to abandon the American people as it pumps trillions into the banks who caused and are continuing to cause such monumental and intense pain. We need her now… we need balance, as much as we can get.
And just like I’ve said many times over the last two years… she won’t give up. Write to the White House, and to your elected representative today. Demand that Elizabeth Warren head up the new consumer protection agency… please.
Here’s she is being interviewed just three days ago on PBS. Please watch the whole thing. Thank you… Mandelman