Why do I want to talk about this?

I have to admit that sometime I wonder why I even want to talk about something as painful as the financial crisis. Why do I want to put a face on it?
I remember when I was a girl hearing about the Great Depression...but I don't remember anyone ever talking about it. Not in a way that made it real to me. I wondered how did the Great Depression happen? Will it happen again? How can I tell if it will or won't? The whole thing was clouded in some kind of mystery.
Here we are in the greatest financial disaster that I will have ever known personally.
When the housing crisis was going on in 2006-2008 my husband and I used to follow it on housing panic. We tried to predict different things about the leading indicators....not for speculation but for personal career and positioning. We didn't speculate in housing. We rented and for the most part always have. We are one of those cheapskates next door.

So in reading the news and following the housing bubble I became interested in the house of cards that held our economy together. I wanted to high light this crisis that was going to effect my generation and the generation to come.

Another thing that came into play is that before I signed up for this project I had been doing faces. At first I was doing faces of current people that were in the news such as Ben Bernanke, George W. Bush, Ted Kennedy and even Richard Fuld. I wanted to continue to get better at doing hand caved faces. My ultimate goal is to do the homeless and hurting faces of this crisis.


I don't write what the "personal descriptions" of the people that I am carving. I do research and then let others that I link to and quote do the telling of the story. I don't see myself as a writer and my goal is to get better at hand carved faces. I don't want to get bogged down in wordsmith. I try to find main stream sources for my text however and not just people that have a gripe. It is not my place to judge...I just want to put a face and a story to the events that have unfolded in my life time.

Robert E. Rubin

May 1 1998

Robert E. Rubin, secretary of the Treasury, recommended that Congress pass legislation to reform or repeal the Glass-Steagall Act of 1933 to modernize the country's financial system....the proposals would permit affiliations between banks and other financial services companies

, such as securities firms and insurance companies. (1)

October-November 1999

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant.

December 4, 2008

Ponzi Scheme at Citi Bank suit slams Rubin:

Director Rubin and ousted CEO Prince - and their lieutenants over the past five years - are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths. (3)

(1) http://www.allbusiness.com/government/business-regulations/500983-1.html

(2) http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

(3) http://www.nypost.com/p/news/business/item_chbTrWRVKY2yTk8fP5i5vM;jsessionid=38919BF4720766E6ACB3B9A061EFD728#ixzz0uQOKu5Nz

quotes appears here without permission, but in solidarity and support.
http://money.cnn.com/2008/01/31/news/economy/rubin_benner.fortune/

Maxed Out Credit Crisis

I am watching this this weekend and wanted to share it.

Sandy Weill

The Aftermath

With Glass-Steagall out of the way, Sandy Weill had his merger and the American financial industry now had a green light to enlarge on subprime lending. Some followed Weill’s model of consolidating loan and insurance companies as he had done with American Health & Life and Travelers, taking loansharking to a level those who had engaged in it back when it was done in storefronts with peeling paint could have never imagined.

More money than any organized crime syndicate could have dreamed of flowed into the coffers of the subprime lenders. What had been an activity aimed mainly at people of color now became linked to complex financial instruments such as tranches and derivatives, that to an uninitiated mind resembled nothing so much as the old shell game. Where’s the mortgage? Under this fund? No. guess again. Inner city and suburb which had been separated by redlining became linked by acronyms–MBS, CDOs, CMOs. But as we shall see in the next essay, ripping off people of color would continue.

http://thestrangedeathofliberalamerica.com/did-racism-help-cause-the-mortgage-crisis-the-rise-of-sandy-weill-and-citigroup.html

Citigroup’s shareholders — the same people who were arguably defrauded by its failure to disclose its exposure to subprime mortgages in the first place. And that means you and I are liable, too. Taxpayers own 18 percent of the company.

Sandy Weill

F A C I N G S O U T H A progressive Southern news report June 5, 2003 - Issue 51 Published by the Institute for Southern Studies and Southern Exposure magazine _____ SPECIAL REPORT - BANKING ON MISERY: Citigroup, Wall Street, and the Fleecing of the South Citigroup the biggest financial corporation in the world. And under the leadership of CEO Sandy Weill, a surprising share of its fortunes come from suspect deals that target vulnerable consumers with exorbitant interest rates, hidden fees, and practices that fair-lending advocates say “skirt the edge of the law.” In this special issue of Facing South, we present the results of a seven-month investigation by award-winning journalist Michael Hudson of Citigroup's predatory lending empire, which reaps billions in ill-gotten gains targeting the consumers who can least afford it. A longer version of "Banking on Misery" will appear in the summer 2003 issue of Southern Exposure, out later this month. It will also feature reports from Dr. Robert Manning, author of Credit Card Nation, as well as leading journalists reporting on credit card scams, pay-day lenders, and others who prey on the most vulnerable. To pre-order a copy of the summer 2003 issue (just $5) or to sign up for a year's subscription to Southern Exposure (just $21), visit www.southernstudies.org or mail to SE, P.O. Box 531, Durham, NC 27702. * * * BANKING ON MISERY Citigroup, Wall Street, and the Fleecing of the South By Michael Hudson Maria Flores felt trapped. Breaking up with her boyfriend had stuck her with loan payments she couldn’t keep up. She says a manager from a CitiFinancial branch in Atlanta threatened to send someone to her job with an arrest warrant and tell her boss she was a deadbeat. Flores says the manager told her she needed to come in and get a new loan. She thought she had no choice. So she signed—taking out a second mortgage and digging herself into a deeper hole with CitiFinancial and, by extension, with the finance company’s corporate parent, Citigroup, the nation’s largest and most powerful bank company. And her problems didn’t end. As she fell behind again, she says, CitiFinancial forced her to write post-dated checks to try and catch up. When that didn’t help, CitiFinancial had another solution: yet another loan. Flores says branch employees led her to believe she had to buy credit insurance to get the new loan—and folded and flipped the papers so quickly and deftly as she signed that she didn’t realize the insurance would cost her nearly $700 the first year alone. The July 2002 deal carried a 17.99 annual percentage rate, or about triple the market rate for home loans. Nearly all of the $17,398 mortgage represented debt rolled over from her previous loan; it cost her $304 in fees to get $93.45 in new money. She knew it was a lousy deal. But what choice did she have? “I was desperate,” she says. “I thought they were going to take my house.” So, like millions of other CitiFinancial customers, Maria Flores did what she thought she had to do. She signed the papers. SUBPRIME TIME Over the past year, Citigroup and its CEO, Sanford I. Weill, have been buffeted by investigations into the company’s misadventures with Enron, WorldCom, and other ill-fated Wall Street players. But is there an overlooked scandal brewing for Citi in places far from Wall Street? In Southern hometowns such as Selma, Ala., Ashland, Ky., and Knoxville, Tenn., people complain Citigroup has taken advantage of them in an unglamorous part of its financial empire—personal loans and mortgages aimed at borrowers with bad credit, bills piling up or, in many instances, simply a trusting nature. Unhappy customers claim the company manipulated them into paying excessive rates and hidden fees, refinancing at unfavorable terms, signing deals that trapped them into bankruptcy and foreclosure. These borrowers are part of the growing “subprime” market for financial services. They are mostly low-income, blue-collar and minority consumers snubbed by banks and credit card companies. Still others are middle-class consumers who have hit hard times because of layoffs or credit card-fueled overspending. Whatever their circumstances, they pay dearly. Citi’s subprime customers frequently pay double or triple the prices paid by borrowers with Citi credit cards and market-rate mortgages—annual percentage rates (APRs) generally between 19.0 and 40.0 on personal loans and 8.5 and 21.9 on mortgages. And beyond exorbitant APRs, critics and lawsuits claim, Citi has fleeced customers with slippery salesmanship and falsified paperwork. A seven-month investigation by Southern Exposure has uncovered a pattern of predatory practices within Citi’s subprime units. Southern Exposure interviewed more than 150 people—borrowers, attorneys, activists, current and ex-employees—and reviewed thousands of pages of loan contracts, lawsuits, testimony and company reports. The people and the documents provide strong evidence that Citi’s subprime operations are reaping billions in ill-gotten gains by targeting the consumers who can least afford it. “It’s a pretty lowdown company that would take advantage of the working poor like this,” says Tom Methvin, an attorney with Beasley, Allen, an Alabama firm that represents hundreds of borrowers who claim Citi did them wrong. “Behind the curtains, they prey on the most vulnerable people in our society.” Citi, critics say, is a model for America’s financial apartheid: a company that’s slow to offer affordable credit to minority and moderate-income communities (see “Reinventing redlining”), then profits by pushing a costly alternative. Citigroup argues that its prime lenders turn customers away because of legitimate assessments of credit histories, and that its subprime units must in turn charge more because their risks are greater. These assertions are called into question by the fact that Citi’s subprime lenders charge high rates even to borrowers whose credit records would qualify them for competitive-rate loans. A national study by the Community Reinvestment Association of North Carolina (CRA-NC) concluded that large numbers of so-called “A-credit” customers are being charged higher rates only because they had the misfortune of walking into one of Citi’s subprime mortgage units rather than one of its prime-rate lenders. The study estimated this group includes nearly 90,000 predominately African-American customers who took out first mortgages in 2000 from Citi’s panoply of subprime lenders. According to CRA-NC’s calculations, these borrowers paid an average of $327 a month more in interest than their prime-rate counterparts, or an overcharge of $110,000 per borrower by the time the loans are paid off. Over the lifetime of their loans, these borrowers’ excessive payments could total as much as $5.7 billion. The company counters that it “has long maintained very high standards” within its subprime operations. It says it doesn’t discriminate or gouge customers. Spokesman Steve Silverman denied requests for an interview with Weill and said privacy concerns prevent the company from commenting on individual borrowers’ cases. Nevertheless, Silverman says Citi has worked to address complaints about the way the subprime industry does business: “We’ve really taken a leadership position on these issues and tried to raise the bar for the industry and, frankly, for the benefit of consumers.” The company has reined in some of its worst abuses, but it has done so under pressure from activists and government. The changes fall short of eradicating unfair practices—and in many instances seem little more than empty gestures. In his public statements, Weill has rejected the idea his company victimizes anyone. In January, he told investors Citi “has become a leader in lending to people who wouldn’t qualify to get loans from banks, or are embarrassed to go into a bank. We have to be very careful that we quantify predatory lending as really something that is predatory lending, and don’t take the market away from people that really need credit.” Citigroup’s push into the subprime market is a dramatic example of how the merger of high and low finance is playing out on Wall Street and on side streets across the South. It’s also the story of how one man blazed a less-traveled path to Fortune 500 ascendance for himself and for others who would imitate his example. And, finally, it’s a case study in how large corporations can fight off scandal and avert lasting reform through a skilled combination of legal maneuvers, tactical retreats, PR stratagems, and power politics. TO READ THE REST OF "BANKING ON MISERY," INCLUDING RELATED WEB-ONLY EXCLUSIVES, visit: www.southernstudies.org _____ LEND US A HAND – We work hard to make Facing South your Southern progressive news source. If you can, help us out by making a tax-deductible contribution at www.southernstudies.org/support.asp or by mail to: Institute for Southern Studies, P.O. Box 531, Durham, NC 27702. TURN IN YOUR FRIENDS - Know someone who might like FACING SOUTH? Write us at facingsouth@southernstudies.org and we'll add them to the mailing list! _____ Copyright C 2003 Institute for Southern Studies. PO Box 531, Durham, NC 27702. (919) 419-8311. http://www.southernstudies.org/

In fact, as the NYT points out, Weill is still so staunchly in favor of the repeal that he displays a wooden trophy of sorts in his office. (In the banking equivalent of a stuffed lion's head mounted on the wall, the plaque reads "Shatterer Of Glass-Steagall.") And, appearances be damned, Weil apparently was not compelled to take this gloating piece of memorabilia down before being visited by a reporter.

Glass-Steagall -- the legislation that required commercial and investment banking institutions to remain separate -- was the key piece of legislation that helped Citigroup morph into the banking behemoth it has become. By extension, it helped Weill's net worth skyrocket.

Weill said that Citigroup's failure makes him "incredibly sad,"

Bill Clinton

Bill Clinton promised to veto the Gramm-Leach-Bililey Act unless there was put in the bill a provision for minorities, farmers, and others that had little or no access to credit. Provision was made and the Modernization Act of 1999, signed into law by President Bill Clinton which repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies.

PHIL GRAMM

Between 1995 and 2000, Gramm was the chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. During that time he spearheaded efforts to pass banking deregulation laws, including the landmark Gramm-Leach-Biley Act of 1999, which removed Depression-era law as separating banking, insurance and brokerage activities.
The Glass-Stegall Act was part of the Banking Act of 1933 isolated banking from securities. This was designed to (1) maintain the integrity of the banking system; (2) prevent self-dealing and other financial abuses; and (3) limit stock market speculation.

After Gramm passed a law easing regulation of energy-commodity trading, California experienced a sharp run-up in energy costs. The energy-trading company Enron was blamed and soon collapsed.(2)

(2)http://www.msnbc.msn.com/id/24844889/

Worse, in 2000, Gramm slipped a thick, 262-page measure (the Commodity Futures Modernization Act: more on that below) into a $384 billion spending bill. The act, said Gramm, would prevent the SEC — especially the Commodity Futures Trading Commission — from getting into the business of regulating financial products called "swaps." Swaps, of course, were at the heart of the subprime debacle.

"Tens of trillions of dollars of transactions were done in the dark," reports University of San Diego law professor Frank Partnoy, an expert on financial markets and derivatives. "No one had a picture of where the risks were flowing... {subsequently} there was more betting on the riskiest subprime mortgages than there were actual mortgages."
Source: MotherJones.com

Richard Fuld - first print in my book

Well I got my book today...and without further ado, I went ahead and made a print in it. The paper is rather thin. I wasn't sure how well this print would come out on this paper, but it looks good to me.
I am only going to print one side of the page...but even then it will mean 40 hand carved faces which should keep me busy.

This stamp is of Richard Fuld. He was the last CEO at Lehman Brothers.