Who Indicts Members Of The Federal Government And Congress?

The Feds Are Still Scapegoating Others By Indicting Standard & Poor’s

It is incredible, about five years after the financial crisis, the federal government and state attorneys are suing this company. As their evidence they are citing tweets of 2007 from individuals working for this company when most people knew the housing market was a bubble to pop etc.

Why Are The Feds Indicting An NSRO?

NSRO stands for Nationally Recognized Statistical Rating Organization. Standard & Poor’s was one of only three such designated organizations before and during the financial crisis of 2007. This exclusive, lucrative, and powerful club was created by the federal Securities Exchange Commission in 1975. Thus, the federal government eliminated competition between credit rating agencies and practically forced financial market participants to use the services of the three big agencies.

According to Wikipedia: “The idea is that banks and other financial institutions should not need to keep in reserve the same amount of capital to protect the institution (against, for example, a run on the bank) if the financial institution is heavily invested in highly liquid and very "safe" securities, such as U.S. government bonds or commercial paper from very stable companies.”

Had the federal government continued to require banks to hold more reserves proportional to their risk taking instead of relying on an government created oligopoly to rate such risks for fees, we would have been spared of such a deep financial crisis.

Who Knows About The Secondary Mortgage Market Enhancement Act

According to Wikipedia: “The Secondary Mortgage Market Enhancement Act of 1984 (SMMEA) was an Act of Congress intended to improve the marketability of private label mortgage-backed security passthroughs.

It declared nationally recognized statistical rating organization (NRSRO) AA-rated mortgage-backed securities to be legal investments equivalent to Treasury securities and other federal government bonds for federally chartered banks (such as federal savings banks, federal savings associations, etc.), state-chartered financial institutions (such as depository banks and insurance companies) unless overridden by state law before October 1991 (of which 21 states did so), and Department of Labor-regulated pension funds.”

The sponsor of this Act of economic illiteracy was a Republican and it was signed into law by President Ronald Reagan. 

This notion that mortgages are as save as Treasury securities and by implication that Treasury securities are safe has been a misconception since ancient times. There simply never was any secure government issued money or securities.  Big government ideas/propaganda leading up to the sovereign debt crisis of 2010.

Who Are The Real Culprits Of The Financial Crisis Of 2007?

There is no doubt that the federal government, the Federal Reserve Bank, and key members of the US Congress are the ones who need to be indicted not Standard & Poor’s. People like Chris Dodd, Barney Frank, Bill Clinton, George Bush, Franklin Raines, Alan Greenspan, Ben Bernanke, and others of this ilk should be indicted. There is actually overwhelming evidence that a massive government failure is to blame for the occurrence and severity of this housing bust.

In their relentless pursuit of affordable housing for everyone no matter their financial situation; their utter disregard for reasonable and enforced lending standards; the dominance of government run Fannie Mae and Freddie Mac; and fueled by basically zero interest rates, these government officials and legislators caused the financial crisis. Contributions by private businesses are pale compared to this.

Don’t believe democratic elections are a substitute for indicting the federal government, the Fed, and key members of the US Congress. These three culprits have brought to bear all their means at their disposal to scapegoat others and stirring up emotions against greedy businesses etc.

Kudos To McGraw Hill

Finally, executives of a US company have enough guts to stand up to these federal blackmailers and their state attorney racketeers who according to media reports tried to extort $1 billion from this company in an attempt to force a settlement. State attorneys are always on standby when large amounts of money can be squeezed out of a private business.