Help Debunking An Email

[Tony]

I recieved this email:

Be sure to read the "where they are now"!!

Here is a quick look into 3 former Fannie Mae executives who have brought down Wall Street.


Franklin Raines was a Chairman and Chief Executive Officer at Fannie Mae. Raines was forced to retire from his position with Fannie Mae when auditing discovered severe irregulaties in Fannie Mae's accounting activities. At the time of his departure The Wall Street Journal noted, " Raines, who long defended the company's accounting despite mounting evidence that it wasn't proper, issued a statement late Tuesday conceding that "mistakes were made" and saying he would assume responsibility as he had earlier promised. News reports indicate the company was under growing pressure from regulators to shake up its management in the wake of findings that the company's books ran afoul of generally accepted accounting principles for four years." Fannie Mae had to redu ce its surplus by $9 billion. Raines left with a "golden parachute valued at $240 Million in benefits. The Government filed suit against Raines w hen the depth of the accounting scandal became clear. http://housingdoom.com/2006/12/18/fannie-charges/ The Government noted, "The 101 charges reveal how the individuals improperly manipulated earnings to maximize their bonuses, while knowingly neglecting accounting systems and internal controls, misapplying over twenty accounting principles an d misleading the regulator and the public.The Notice explains how they submitted six years of misleading and inaccurate accounting statements and inaccurate capital reports that enabled them to grow Fannie Mae in an unsafe and unsound manner." These charges were made in 2006. The Court ordered Raines to return $50 Million Dollars he received in bonuses based on the miss-stated Fannie Mae profits.


Tim Howard - Was the Chief Financial Officer of Fannie Mae. Howard "was a strong internal proponent of using accounting strategies that would ensure a "stable pattern of earnings" at Fannie. In everyday English - he was cooking the books.The Government Investigation determined that, "Chief Financial Officer, Tim Howard, failed to provide adequate oversight to key control and reporting functions within Fannie Mae," On June 16, 2006, Rep. Richard Baker, R-La., asked the Justice Department to investi gate his allegations that two former Fannie Mae executives lied to Congress in October 2004 when they denied manipulating the mortgage-finance giant's income statement to achieve management pay bonuses. Investigations by federal regulators and the company's board of directors since concluded that management did manipulate 1998 earnings to trigger bonuses. Raines and Howard resigned under pressure in late 2004.

Howard's Golden Parachute was estimated at $20 Million!


Jim Johnson - A former executive at Lehman Brothers and who was later forced from his position as Fannie Mae CEO. A look at the Office of Federal Housing Enterprise Oversight's May 2006 report on mismanagement and corruption inside Fannie Mae, and you'll see some interesting things about Johnson. Investigators found that Fannie Mae had hidden a substantial amount of Johnson's 1998 compensation from the public, reporting t hat it was between $6 million and $7 million when it fact it was $21 million." Johnson is currently under investigation for taking illegal loans from Countrywide while serving as CEO of Fannie Mae.

Johnson's Golden Parachute was estimated at $28 Million.

WHERE ARE THEY NOW?

FRANKLIN RAINES? Raines works for the Obama Campaign as Chief Economic Advisor

TIM HOWARD? Howard is also a Chief Economic Advisor to Obama

JIM JOHNSON? Johnson hired as a Senior Obama Finance Advisor and was selected to run Obama's Vice Presidential Search Committee


IF OBAMA PLANS ON CLEANING UP THE MESS - HIS ADVISORS HAVE THE EXPERTISE - THEY MADE THE MESS IN THE FIRST PLACE. Would you trust the men who tore Wall Street down to build the New Wall Street?


I'm was aware of Obama's advisers connections to Fannie Mae and Freddie Mac. But is it really as dire as this email would have you believe? Doesn't some of McCain's advisers have associations with companies connected to the crisis as well?

[XBoxWarrior]

I recieved this email:




I'm was aware of Obama's advisers connections to Fannie Mae and Freddie Mac. But is it really as dire as this email would have you believe? Doesn't some of McCain's advisers have associations with companies connected to the crisis as well?

Well, dude, you could use the "Google"...I have one that operates fairly well, and I can see the problems with that arguement.

Google.com

It's your friend!

[Amapola]

Hey - have you ever heard of Snopes? It's this really great site - www.snopes.com - and look, they have your email there! False. (http://www.snopes.com/politics/obama/fanniemae.asp) Sorry, like most forwards, this one is complete BS.

You're welcome. :)

[RandFan]

Thanks Tony.

It's amazing the BS and lies people will propagate to win an election.

[TheJim]

Well there is one thing wrong in the first part, the part of the Fannies being responsible or even primary responsible for the mess we are in. Even if you want to place all of the blame on the Fannies for the bad loans, which is of course beyond stupid, the foreclosures are not the cause of the meltdown. No, that honor belongs to mortgage backed credit swaps that no one taking out a subprime mortgage is remotely responsible for.

[Tony]

Thanks Amapola. I tried snopes, but had no luck in finding this email.


It's amazing the BS and lies people will propagate to win an election.

It is amazing. It hasn't escaped my notice that the majority of these anonymous messages proliferating my inbox are from the right. It's telling that the right wing seeks to prey on the ignorance and credulity of people to spread their lies as opposed giving us reasons why we should vote for their guy. It's sad that promoting ignorance has become a conservative principle.

[Amapola]

Thanks Amapola. I tried snopes, but had no luck in finding this email.




It is amazing. It hasn't escaped my notice that the majority of these anonymous messages proliferating my inbox are from the right. It's telling that the right wing seeks to prey on the ignorance and credulity of people to spread their lies as opposed giving us reasons why we should vote for their guy. It's sad that promoting ignorance has become a conservative principle.

Maybe they just barely put it up on the site... I didn't notice that part.

I agree with you. I've always suspected that conservatives have really great arguments on their side, but they never show up as forwards in my inbox. That *is* really sad - I suppose it's an appeal to emotion and fear, and although those tactics might work in the short run, I feel it is a disservice to the people.

[Patsy]

I don't wish to discourage you, because I still fruitlessly try to debunk this kind of email myself, but really, it is probably a waste of time, because the type of person who circulates these kind of unfounded rumors probably doesn't give a snap for the truth.

[XBoxWarrior]

Thanks Amapola. I tried snopes, but had no luck in finding this email.

Even the "Google Snopes" brings it up?

It is amazing. It hasn't escaped my notice that the majority of these anonymous messages proliferating my inbox are from the right. It's telling that the right wing seeks to prey on the ignorance and credulity of people to spread their lies as opposed giving us reasons why we should vote for their guy. It's sad that promoting ignorance has become a conservative principle.

Dude, have you ever considered using the GMail? It filters out 99% of the Spam? (unless that mail is coming from your friends, in which case, you need to change friends) ;)

I have a many of friends that "complain" about the Spam, yet they wont change their address.

Step up.

[Whiplash]

Thanks Amapola. I tried snopes, but had no luck in finding this email.




It is amazing. It hasn't escaped my notice that the majority of these anonymous messages proliferating my inbox are from the right. It's telling that the right wing seeks to prey on the ignorance and credulity of people to spread their lies as opposed giving us reasons why we should vote for their guy. It's sad that promoting ignorance has become a conservative principle.


Never attribute to malice what can be more easily attributed to stupidity or whatever the saying is. I sincerely believe that a majority of these types of things are created by and sent around by people who actually believe it. People are far too quick around here to yell "liar! LIAR!!'. It's insanely cynical and I get sick of seeing it every 5 minutes on this forum. I believe it's becoming nothing more than some kind of "shaming" tactic.

I often think that much of what I read from the left is all lies, and I've equally accused people of spreading lies purposely. But I was wrong to do so in many cases. I can admit that. I've also forwarded thoughts here that turned to be untrue. Not from malice or direct intent to lie and deceive however.

People on both sides are passionate about this stuff, and more likely to accept things that fit into their world view, and create these kinds of emails or send them around becuase they really believe it and hope to do something about it. This idea that they are all cooked up in some back room at the GOP is insulting, cynical, and a wee bit on the CT side.

[RandFan]

Well there is one thing wrong in the first part, the part of the Fannies being responsible or even primary responsible for the mess we are in. Even if you want to place all of the blame on the Fannies for the bad loans, which is of course beyond stupid, the foreclosures are not the cause of the meltdown. No, that honor belongs to mortgage backed credit swaps that no one taking out a subprime mortgage is remotely responsible for. I think you are trying to isolate a problem that can't really be isolated to any single thing. I've been reaserching this for sometime and the more I look into it the more it is becoming apparent that there is a lot of blame to go around. Fannie and Freddie mac deserve a healthy serving of responsibility but it would be wrong to lay this all on them.

[leftysergeant]

Never attribute to malice what can be more easily attributed to stupidity or whatever the saying is. I sincerely believe that a majority of these types of things are created by and sent around by people who actually believe it.

No. They are created by evil maggots like Karl Rove and propogated by the dimbulbs who buy his steaming compost.

[The Central Scrutinizer]

Hey - have you ever heard of Snopes? It's this really great site - www.snopes.com (http://www.snopes.com) - and look, they have your email there! False. (http://www.snopes.com/politics/obama/fanniemae.asp) Sorry, like most forwards, this one is complete BS.

You're welcome. :)

For the past few years, I don't even bother looking them up on Snopes anymore. I just reply-all the words "This is false" or "This is a hoax". Guess what? I've never been wrong.

[TheJim]

I think you are trying to isolate a problem that can't really be isolated to any single thing. I've been reaserching this for sometime and the more I look into it the more it is becoming apparent that there is a lot of blame to go around. Fannie and Freddie mac deserve a healthy serving of responsibility but it would be wrong to lay this all on them.

I was responding to the claim that it was the Fannies that took down wall street and it is just not true. The defaulted mortgages by themselves would have only been responsible for a slow down in the economy and the firms that lent could have easily wrote them off with maybe 1 or 2 banks going under. I do agree there is plenty of blame to go around starting with Alan Greenspan who somehow has got of almost unscratched and the Fannies do deserve some blame along with the lenders, the mortgage brokers, the buyers, the regulators, the law makers, Trump (just have to put this huckster on the list for his get rich quick scams), real estate agents etc.

But, what was the real death nail for the IB and wall street was the piece meal dirvetives and the unbacked quasi insurance policies that where leveraged so often that when they came due there was not enough reserve to cover the debt and the banks have no idea who has how much the other have. This is the main cause of the credit crisis. The sub prime melt down was just the trigger for this but a sudden huge spike downward on commodity prices could have done this also along with several other scenarios.

[NorfolkAtheist]

Never attribute to malice what can be more easily attributed to stupidity or whatever the saying is. I sincerely believe that a majority of these types of things are created by and sent around by people who actually believe it.

Are these things sent around by people who likely believe it? I don't really doubt it.

Are they created by people who believe it? Eh, I'm skeptical. There seems to be too much whole cloth for there not to be a tailor. But, I don't doubt that they feel they're right of side fight. It reminds me of "lying for Jesus".

[RandFan]

...what was the real death nail for the IB and wall street was the piece meal dirvetives... Did you know that those derivatives were largely mortgages (http://www.sec.gov/answers/mortgagesecurities.htm)? And it wasn't simply that they were deriviatives. It was that they were structured in such a way that didn't allow for restructuring with the lender to avoid default.

The derivatives are actually a great thing for the market but only if they are designed properly and the possibility of a down market is sufficently taken into account. These were poorly designed for such a significant swing in housing values and when the value of the deriviatives fell below a certain threshold their bottom fell out and took everything else with it.

[bozothedeathmachine]

I sincerely believe that a majority of these types of things are created by and sent around by people who actually believe it


Are these things sent around by people who likely believe it? I don't really doubt it.

Are they created by people who believe it? Eh, I'm skeptical. There seems to be too much whole cloth for there not to be a tailor. But, I don't doubt that they feel they're right of side fight. It reminds me of "lying for Jesus".

Whip, I have to go with folky on this one. It seems like you are a little liberal on handing out the benefit of doubt. While I can't remark on the "majority of these" mails, this specific one does seem to have a lot of minute detail only to totally get them totally ***** wrong in the end.

I'm also inclined to believe it's the detail that makes the average person believe it's true. If it were just a one liner like "Obama eats babies at his NAMBLA meeting" it would only be forwarded by the hard core kool-aid drinkers. But the details here just make Joe Sixpack think someone already did the research for them; bias confirmed.

So to include all the "facts" about these 3 people then fabricate the last 5 lines isn't sincerity, it's willful maleficence.

[TheJim]

Did you know that those derivatives were largely mortgages (http://www.sec.gov/answers/mortgagesecurities.htm)? And it wasn't simply that they were deriviatives. It was that they were structured in such a way that didn't allow for restructuring with the lender to avoid default.

The derivatives are actually a great thing for the market but only if they are designed properly and the possibility of a down market is sufficently taken into account. These were poorly designed for such a significant swing in housing values and when the value of the deriviatives fell below a certain threshold their bottom fell out and took everything else with it.

Yes I did know that. But, the way the where designed in a way that there is probably less than 10,000 people in the US that actually understands how they are structured and the risks a specific derivative had. The sales staff and the buyers almost to a person did not understand the exact working and risks which made the sale and buying of the swaps even more important. And it was these swaps more than anything else responsible. The banks that underwrote these swaps where not required to have the capital to cover and when the time came to cover they went belly up. Back to the derivatives, there problem was they where under regulated and more important the buyers and sellers had little understanding of the risks and made even worse assumptions that the housing market would only rise. A very simple model on how they work is there is a 90 percent chance they will have a 10 percent annual return but the 10 percent chance of loss will be close to 60 to 80 percent loss. For the sales force this is a no brainier selling them, they will hit there bonus and look good in 9 out of 10 years but than lose their job in the 10th year after banking the bonuses and having a solid resume of success in 9 of the 10 years. The buyers on the other hand either did not understand the downside, or where buying for institutional interests so they too looked good for most years banking bonuses.