A butterfly effect, a small butterfly flutters it’s tiny wings and the small buff grows and develops over time into a huge hurricane.

The Butterfly

  • Community Reinvestment Act revisions of 1995 by Bill Clinton, inventing the ‘sub prime’ loan. A social engineering regulation to force banks to provide mortgage loans to poor risk of repayment buyers. This revision changed “traditional lending requirements such as requiring a down payment or limiting mortgage payments to 28 percent of income.” The Boston branch of the Federal Reserve, said these were “arbitrary” and “outdated”.

  • After relaxing lending standards, President Bill Clinton’s administration’s goal of having 67.5 percent national home ownership by 2000 was exceeded.

  • A redlining investigation by Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, of Fannie Mae entailed the proposal that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.

Economic Storm

  • The S. 900 [106th]: Gramm-Leach-Bliley Act of 1999 which deregulated parts of the Glass Steagall Act. Passed the Senate on Nov. 4 1999, The total votes were 90 Ayes (Joe Biden among them; 36 Democrats, 44 Republicans), 8 Nays, 1 Present/Not Voting (John McCain). The Act passed the House on Nov. 4 1999. The total votes were 362 Ayes (Nancy Pelosi among them; 152 Democrat, 210 Republican), 57 Nays (Barney Frank among them), 15 Present/Not Voting. No amendments regarding changes to CRA certification of banks where allowed as the Clinton Administration stressed that it “would veto any legislation that would scale back minority-lending requirements.”

  • Community Organizing groups like ACORN (Association of Community Organizations for Reform Now)push banks to make CRA compliant loans. ACORN proudly touted “affirmative action” lending and pressured banks to make sub-prime loans. This is where Barack Obama learned his Executive skills. He funneled money to ACORN from the the Foundations he chaired or headed which funded ACORN’s push for sub prime lending. He trained ACORN activists in how to pressure banks into giving CRA loans.

Category 1 Economic Hurricane

  • Easy Credit after 9/11. Interest rates where kept deliberately low after the Terrorist attack to bolster economic growth and consumer confidence.

  • Congressman Barney Franks vouches in 2003 for the “soundness” of Fannie Mae and Freddie Mac, and said “I do not see” any “possibility of serious financial losses to the treasury.” He declared that the federal government has “probably done too little rather than too much to push them to meet the goals of affordable housing.”

  • Rep. Maxine Waters, D-Ca, said in a Sept. 25, 2003 hearing of the House Committee on Financial Services, “We do not have a crisis at Fannie Mae and in particular Freddie Mac under the outstanding leadership of Frank Raines.”

Category 2 Economic Hurricane

  • Commodity prices, among them oil, begin a climb to highs that are multiples of 2000 prices.

  • In a 2004 hearing, Rep. William Lacy Clay, D-Mi, tried to inflame and misdirect an investigation that found illegal activity at Fannie Mae by calling it a “lynching,” . Both Clay and Fannie Mae CEO Franklin Raines are African American.

– Lobby money from Fannie Mae/Freddie Mac is paid out to supporters. Obama managed to become the third biggest all-time recipient of Fannie Mae/Freddie Mac PAC and Lobby money after only three years in the Senate, $105,849.With a 30 year head start, Democratic Sen. Chris Dodd, was number one in receiving loot from Fannie Mae/Freddie Mac, $133,900.

– Any attempt to create any regulatory legislature was derailed by lobby pressure from Fannie Mae and Freddie Mac. Efforts started in 2004/2005 to put them under the supervision of a world class regulator at a new agency within the Department of the Treasury among them. John McCain signed onto this as a co sponsor in 2006. The changes where blocked in committee or by other means for the reasons stated by Representative Frank, Barney H D-MA, who received $40,100 from Fannie Mae/Freddie Mac, He said “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” Representative Mel Watt(D-NC) added “I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing.”

Category 3 Economic Hurricane

  • FASB 157 goes into effect Nov. 15, 2007. An accounting change that changed asset values to Mark – to – market means devaluing assets to their current market value and not the maturity book value. Devaluing assets in a soft market even if there are no plans to sell the asset in a soft market.

  • Housing Bubble bursts. Joe Biden endorsed bill to revise the bankruptcy laws passes. In 2005, Senior Senator Joe Biden helps develop democratic support for the Bankruptcy Abuse Prevention and Consumer Protection Act. Notice the misleading name Consumer Protection Act, I love how congress always names laws that will harm someone as a law that will protect them. This law prevents saving a primary house by renegotiating the mortgage loan when you file for bankruptcy if you own the house less than 730 days. Now people who bought houses they couldn’t afford in the first place and now can’t pay their bills, will lose their house and any money they put into it. Many houses enter the market with no one able to buy them. Prices of homes begin to plummet.

  • Government passes a $150 billion in a stimulus package for the nation.

  • Government bailout of $29 billion for the bad assets of Bear Stearns to entice J.P. Morgan to buy the investment bank .

  • Government bailout of $85 billion for 80 percent of AIG.

  • Government bailout of $300 billion for Fannie Mae and Freddie Mac.

Category 4 Economic Hurricane

  • $700 Billion rescue plan enacted in America to purchase the assets containing the sub prime mortgages banks where forced to make because of the Community Reinvestment Act.

  • On Sept. 25. 2008, in an appearance by Bill Clinton on ABC’s “Good Morning America” . There was reference to his party’s reluctance to place more restrictions on Fannie and Freddie. Bill Clinton said, “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress, or by me when I was president, to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”

Category 5 Economic Hurricane

World wide depression of capitalist based democracies. Rise of Islamofascists in the middle east in countries rich from oil revenue. Rise of Socialist bastions in South America similarly enriched from oil revenues. A scenario similar to the 1930’s and the rise of Nazi Germany and Imperial Japan.

Other Social engineering butterflies upsetting the economy.

Regulations for Biofuel Subsidy is already causing;

  • Higher Food costs

  • Famine in Haiti

Regulations against Nuclear Power Plants.

Regulations against American territory oil drilling.

What will their category 5 status look like?