November 4, 2008, marked the day when Americans went to the voting booths in droves to say no to eight years of George Bush and the Republican Party policies by voting in a man that promised to usher in change.

But if one focuses more on the politics and ignores the policies, one could easily mistake the smell of victory for the smell of a drenched rat. 

Before Obama’s first month was over he had already taken back many of his campaign promises, expanded the war in Afghanistan, continued a covert war Pakistan, and taken stance in favor of Clinton and Bush’s CIA sponsored kidnappings.

Obama has been silent on a bill that would allow Americans to be placed in detention centers, and he's been silent on the Defense Department when it established a civilian workforce for voluntary and involuntary deployment overseas.

Is this the change that Obama promised?

Mainstream media has painted Obama as the "new hope" for America. They attempt to demonstrate how he will be different from old Washington politics by reporting his victories against Wall Street.

It was Abraham Lincoln that said, “Nearly all men can stand adversity, but if you want to test a man's character, give him power.”

Ironically, the very financiers that put Obama in this position of power are the same group of men that Obama, at least on the surface is suppose to be against.  Which raises the question—why would members of the establishment support someone who is seen as a direct threat to them.

“ROC” & STOCK

 In his run for president, Barack Obama raised $745 million, 50 percent more than his rival John McCain, and the most out of any candidate running. $14 million came from the Securities and investment industry where the first signs of an economic meltdown originated. Over $650,000 came from Citigroup, a company once headed by Robert Rubin.

Robert Rubin is the 5^th Chairman of the Council on Foreign Relations and served as Secretary of the Treasury under both Clinton terms. It is during his time as Secretary of the Treasury that Rubin went on to earn a spot on Market Watch’s “Top Ten List” as one the most unethical people in business for his stance on pushing for deregulation. From there he went on to become Director and Senior Counselor of Citigroup, a company that benefited as direct result of deregulation.

In 1999, the Gramm-Leach-Bliley Act was ratified by the US Senate and approved by former president Bill Clinton. The act allowed the mergers of investment banks with commercial banks paving the way Citibank, the largest Wall Street bank, and Travelers Group Inc., the owners Solomon Smith Barney a major brokerage firm to merge.

Now free from government oversight, banks were able to fully participate in selling mortgage-backed securities, which comprised of sub-prime loans, as actual investment vehicles.

Eager to turn a profit, the banking institutions were ravenous in their pursuit to originate these sub-prime loans. Their quest was further facilitated with the help of President Clinton.

During the Clinton administration, Fannie Mae Corporation was under immense pressure to promote home ownership amongst minorities and low-income consumers. In an effort to produce more growth and profit, Fannie Mae lowered its credit requirements on loans that it purchases from banks and began buying loans extend to borrowers with poor or non-existent credit history that later defaulted.

A typical prime loan consist of borrowers with high credit scores, 20 percent down payments and with full required supporting documents such as proof of employment and cash reserves in a savings account.

Sub-prime loans, however, allows a borrower to state their annual income without requiring them to submit any documentation. One lender came up with catchy term for his program: NINJA loans for No Income No Job No Assets required.

African-Americans and Hispanics found prime loans, which generally went to white borrowers, difficult to secure but when the sub-prime loans became more prevalent they found themselves disproportionately represented amongst the sub-prime refinance market.

The large equity position in many of these homes set off a wave of predatory lending were banks targeted these borrowers and talk them into refinancing their current loan into a new loan with a higher interest rate. Once the borrower defaulted the banks took the home and the equity.  

United for a Fair Economy estimated total loss of wealth for people of color to be between $164 billion and $213 billion for sub-prime loans taken during the past eight years. When this is looked at carefully, it means losses of between $71 billion and $92 billion for Black/African-American borrowers, and between $75 billion and $98 billion for Latino borrowers for the same period.

Mark Zachary, a 12-year veteran in the mortgage business before joining Countrywide in August 2006 told NBC News that, “You see some of the things that were going on and you just know that it's not right. It was, what do we do to get one more deal done. [sic] It doesn't matter how you get there, just how do you get one more deal done.”

NBC News report describe an “anything goes” culture motivated by increased income for every loan generated.

Citifinancial, a consumer finance division of Citigroup, found itself in an investigation before the Federal Trade Commission.

Former employee Gail Kubiniec stated that her colleagues would receive quarterly incentives called “Rocopoly Money” based on how many present borrowers they refinance. If the goal was met the borrowers would receive Rocopoly Money and the branch managers would receive bonuses known as “ROC,” return on cash.

To entice the borrowers into going along with the refinance scheme, Citifinancial employees would run credit reports, sometimes without the individuals consent, and look for ways to eliminate debt.

Using their software called Maestro Citifinancial employees were able to see if the borrower had open tradelines, and if there was available equity in their home, the employee would offer debt consolidation and would commonly try to sell the largest loan.

During a “blitz night” employees would solicit over the phone and present new loans to borrowers disclosing only the monthly payment and not the escrow amount for property taxes and homeowner’s insurance.   Information such as interest rates, financed points, fees, closing costs, and “add-ons” like credit insurance were disclosed only when the borrowers demanded.

And if the borrowers objected to the coverages, the branch manager would sometimes come to closing and “re-pitch” them. If that failed the borrower would be told that the loan could be done again without coverages but that it would take longer. Rather than wait additional time, borrowers grudgingly accepted the loan’s terms.

Citifinacial targeted borrowers by zip codes and used a direct mail campaign to inform borrowers about their “Debt Relief Plan.” In her testimony to the Federal Trade Commission, Ms. Kubiniec describe these mailers as “deceptive” because most qualified for a higher interest rate and not the one quoted in the mailer.

Ms. Kubiniec said in Citifinancial’s formal training employees were advised to quote monthly charges with and without coverages. But she said that it was common practice at the time of closing to not disclose specific charges to the borrowers.

In fact, Citifinancial did “closed folder” closings. This is when the Citifincial employees discuss the loan with the borrower orally and only open the folder when the borrower has shown signs that they would actually sign it. 

Ms. Kubiniec said that, “[she] and other employees would often determine how much insurance could be sold to a borrower based on the borrower’s occupation, race, age and education level.” In fact she said that, “if someone . . . was a minority . . . I would try to include all the coverages Citifinancial offered. The more gullible the consumer appeared, the more coverages I would try to include in the loan . . . . It was encourage that [employees] . . . try to sell the coverage with the highest premiums.”

“ORGY OF EXCESS”

After 9/11 former President Bush encourage Americans to spend more money. According to political researcher and analysis Tanya Hsu the Nation “borrowed at unprecedented levels so as to not only pay for its war on terror in the Middle East (calculated to cost $4 trillion) but also [to] pay for tax cuts. ... ” Bush then went on to lower the reserve requirements for Fannie Mae and Freddie Mac, from 10 percent to 2.5 percent.

This meant, for example, if Fannie Mae or Freddie Mac had $100 they would only be required to keep $2.00 on reserve to back up $98.

This further exacerbated predatory lending to the point that former New York Governor and attorney general Eliot Spitzer was prompted to team up with attorneys general in 49 states to bring litigation to sub-prime lenders engaging in predatory lending. In Eliot Spitzer’s state, laws were passed to eliminate the practice. 

According to Mr. Spitzer, in 2003, the height of the predatory lending crisis the Office of the Comptroller of the Currency, a federal agency started nearly 140 years ago to supervise national banks, invoked a clause preempting all state predatory lending laws, thereby rendering them inoperative. 

When 50 states opposed the new ruling, the OCC filed a federal lawsuit blocking the investigation.

Spitzer’s campaign took on Countrywide and their owner Bank of America, Goldman Sachs, Merrill Lynch and Citigroup’s Citibank.

But before his expulsion of corruption could fully gather steam, Spitzer found himself under investigation by the Internal Revenue Service and the Federal Bureau of Investigation for suspicious wire transfers.

The agents initially believe Spitzer was hiding brides but later found out the money was going to Emperor’s Club, a prostitution service.

On March 12, 2008, Spitzer announced that he would resign after threats of impeachment by state lawmakers.  March 17, 2008, Spitzer effectively resigned.

No further actions were taken in relation to his investigation into predatory lenders.

A REAL CLASS ACT ?

Citizens desiring retribution for being wrong by predatory lenders now face a new obstacle.

Federal courts.

On Feb. 18, former President Bush in his second term scored a major win with the signing of the Class Action Fairness Act of 2005. The bill was design to restrict class-action lawsuits. The bill allowed nationwide class actions cases to move from state jurisdiction to federal jurisdiction.

 The same federal government that, under the OCC, invoked a clause permitting state consumer laws to be violated in the first place was now in charge of setting things back right.

While state courts historically ruled in favor of the plaintiffs, federal courts are tougher when it comes to granting plaintiffs the right to unite and bring a single suit against the defendant.

Salon.com reported that, even if cases are heard there is a long waiting list at the federal level because the system is already backlogged. They went on to say that federal courts typically refuse to hear class action lawsuits requested by petitioners in multiple states.

"No one wants to file a class-action suit at a federal level because they often get dismissed if they include plaintiffs from a patchwork of different states, all of which have different laws," explained Jude McCartin, an aide to Sen. Jeff Bingaman, D-N.M. "There isn't one state law that is applicable, and there is no guidance for federal judges as to where they can apply just one state's laws."

 Justin Forlenza of Fordham University School of Law wrote:

“. . . the statute will force federal courts to create and develop substantive federal common law. . .  it is unconstitutional for federal courts sitting in diversity to create substantive common law. . . neither Congress nor the federal courts have the power to declare substantive rules of common law applicable in a [s]tate.”

The legislation was opposed by many Democrats who believed the “the legislation is a payoff to big business, at the expense of consumers, for supporting Bush's reelection.”

The passage of the bill was part of a five-year campaign by 475 lobbyists representing business groups who argued that class-action lawsuits enriched trial lawyers who sought sympathetic judges and juries and then filed in those jurisdictions.

The Senate, despite the pleas from 40 civil rights and labor organizations, including NAACP and American Civil Liberties Union, voted 72-26 in favor of the bill.

The bill even won support from newly elected to US Senate Barack Obama.

“Every American deserves their day in court. This bill, while not perfect, gives people that day while still providing the reasonable reforms necessary to safeguard against the most blatant abuses of the system. I also hope that the federal judiciary takes seriously their expanded role in class action litigation, and upholds their responsibility to fairly certify class actions so that they may protect our civil and consumer rights... ”        

 -  Barack Obama, Feb. 14, 2004

THE RECOVERY TEAM

Obama, the self-proclaimed reformer declared he would clean up Washington once elected; however, he tapped a group of unsavory characters to help him take on the task.

Although highly critical of predatory lenders Obama, nonetheless, brought in Penny Pritzker as head of his national campaign-finance chair.  Penny Pritzker is said to be creator of the mortgage-back.

When Superior Bank, co-owned by her family, failed there were charges of fraud and mismanagement in pursuing business in the sub-prime market.

In agreement with Federal Deposit Insurance Corp., Pritzker’s agreed to pay $460 million over 15 years to cover losses in exchange for the FDIC not pursuing any charges against the owners.

Mrs. Pritzker turned down the position as Obama’s Secretary of Commerce because of her “inability to [free] herself from a series of complex business ties.”

In a statement released when she learned Obama had reached a decision to make her his first choice she said, “Speculation has grown that I am a candidate for Secretary of Commerce. I am not. I think I can best serve our nation in my current capacity: building businesses, creating jobs and working to strengthen our economy.”

While declaring that the lack of government regulations was the one of the causes for the financial collapse, Obama appointed Timothy Geithner as Secretary of Treasury and Lawrence Summers as Director of the White House's National Economic Council, all who are followers of Robert Rubin’s free trade and deregulation policies.

Lawrence Summers while Chief Economist for the World Bank in 1991 became the focal point of resentment when an internal memo leaked of Summers saying, "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that . . . I've always thought that under-populated countries in Africa are vastly under-polluted."

Summers also teamed up with Enron’s Ken Lay to tell former Governor Gray Davis that the problem with California’s energy crisis was that it was over-regulated and that Davis should relax environmental controls. 

Geithner, according the Washington Post, was the primary architect of the Bush administration's response to the financial crisis, which included the $700 billion bailout bill that went to some of Obama’s contributors on Wall Street.

Geithner was also head of the Federal Reserve Bank of New York when Bloomberg filed a Freedom of Information Act lawsuit on Nov. 7, 2008, requesting to know what the Fed had done with $2 trillion of taxpayers’ money.

The Freedom of Information Act allows the full or partial disclosure of documents controlled by the United States Government. The Fed, being a private bank and above congressional over-site, has yet to comply.

Obama’s appointees’ raises many questions as to whose interest will come first. Those of the average American or the financial elite.

Best selling author Michel Chossudovsky is a Professor of Economics at the University of Ottawa and Director of the Centre for Research on Globalization.

In one of his columns at www.globalresearch.ca he declares the Obama administration will use the crisis to set up new international financial regulator agency.

Mr. Chossudovsky asked:

“Where are Obama's "Main Street appointees"? Namely individuals who respond to the interests of people across America.  There are no labor or community leaders on Obama's list for key positions.

Meaningful financial reform cannot be adopted by officials appointed by Wall Street and who act on behalf of Wall Street. 

Those who set the financial system ablaze in 1999, have been called back to turn out the fire 

The banking conglomerates call the shots. They decide on the composition of the Obama Cabinet. 

The Wall Street blueprint has already been discussed behind closed doors: the hidden agenda is to establish a unipolar international monetary system, dominated by US financial power, which in turn would be protected and secured by US military superiority.”