NO QUARTER » Real Estate

Economic/Market Highlights 11/10

LD — Tue, 11 Nov 2008 19:30:14 +0000

I will admit that, given the current dynamics at work in the economy and the markets, I have become somewhat numbed as to the magnitude of some of the developments. Many of the highlights that I will offer from yesterday’s news would be enormous stories in and of themselves. Taken collectively, they do become overwhelming if we let them.

The markets are down 5-6% on the month. Given the stream of negative news, one might think that the market could be even lower. The fact that markets aren’t even lower is testament to the trillions of dollars that have been put to work by governments around the world.

Let’s review the major stories of November 10, 2008:

1. China implemented a $563bln economic stimulus plan primarily to further develop infrastructure in the country. That figure represents 1/5th of their total GDP. I was surprised to hear that, but it also indicates to me how much growth potential that country possesses. This package had an immediate impact on our equity markets this morning when our markets were up 3%. This package also supported commodities, especially copper which bounced about 5% on the day. Aside from infrastructure, China directed this stimulus package to an area that was badly damaged in a recent earthquake. Last but not least, China offered “tax deductions” on the purchase of certain hard assets. (Are you listening, Barack??)

This stimulus package though indicates to me that it is not likely that many of our domestic companies will likely be receiving capital injections from sovereign wealth funds. With oil at $60, oil producing countries (such as Dubai) may need to support the real estate developers and exporters in their own countries.

2. Fannie Mae reported a loss of $29bln (I’m not going to say earnings when companies lose money) which equates to $12.96 a share vs an expected loss of $1.40 a share. (How can Wall St. analysts maintain credibility when they miss a call by almost 1000%?).

It is amazing how Fannie can rack up losses like this when their own incentive bonuses are not on the line and when collectively Uncle Sam owns them. Aside from this loss, Fannie did announce that they expect losses to continue and to increase into 2009. This to me means they see foreclosures increasing over the next 6 months. More than likely Fannie will have a negative net worth by the end of 2008 requiring an increased capital injection by the U.S. taxpayer. Where does it end!!

Again, this model is broken. The American consumer who is able to get a mortgage is being subsidized at the expense of the taxpayers. Let the private market set the mortgage rates and if the housing market re-prices, so be it. Enough socialized housing finance.

3. AIG has already been covered on a separate thread so we do not need to repeat that pain here. Suffice it to say, though, that if they effectively burned through $100bln dollars, give or take, in the course of 6 months, the price tag for this entity could possibly be upwards of $300-500 bln dollars with pressure on a wide array of assets owned by other entities in the process.

4. How about the auto analyst at Deutsche Bank coming out with a sell rating on GM? The stock is down 90% on the year and now he tells us to sell … in any event, the stock was down 23% on the day to close at 3.25. The Deutsche analyst is bold enough to say the stock is going to “0″ !! Look for heavy political posturing between BO/Dems vs the Bush administration as to added bailout funds, terms, timing for the auto industry.

In today’s WSJ editorial section, they write, “[I]f our politicians can’t avoid throwing taxpayer cash at Detroit, then they should at least do so in a way that really protects taxpayers. That means handing a receiver the power to replace current management, zero out current shareholders, and especially to rewrite labor and other contracts. Anything less is merely a payoff to Michigan politicians and their union allies. ”

High time somebody stands up for capitalism!! … Gentlemen … (one of the great movies ever made…)

5. Recession plays in the form of General Mills, Campbell’s Soup, McDonalds, and Wal-Mart continue to out-perform.

6. Google trades down sharply today on anticipation of slowing in internet advertising.

7. Goldman Sachs (the boy wonders of Wall St.) also trade down sharply (down 8% on the day, 70% on the year and down a full 40% from just 6 weeks ago when Warren Buffett made a 5bln equity investment … a cool $2bln loss for Warren). Concerns about Goldman center on their private equity investments with their own capital.

8. Speaking of Warren Buffett, Berkshire Hathaway announced earnings after Friday’s close and they were down 77%. Berkshire Hathaway is still only down app 23% on the year so as a stock it has handily outperformed the market.

9. The top-rated bank analyst on Wall St. is Meredith Whitney at Oppenheimer. She is beholden to nobody and truly tells it like it is. She was quoted recently as saying that she is particularly pessimistic about the U.S. government’s historic actions to bail out banks with massive capital injections. Such plans have little hope of improving core fundamentals.

Again, in the face of this massive flow of bad news, the market was only down 1-2% on the day. That said, the real economy is going to get worse before it gets better so be cautious about putting money to work in situations that are dependent on borrowed financing.

Heck, even my neighbor who runs a family business (guessing 3-5mm in annual earnings with significant real estate holdings) that has existed for 75 years and is an institution in our town, was turned down for a modest-sized loan by a money center bank to settle an estate.

That, to me, is the definition of a “credit crunch.”

Last but not least, I want to comment on a story that has been making the rounds about the “lack of transparency” in some of the government programs that have been put to work in the markets.

Specifically, the program in question focuses on the Fed backstopping the short-term lending markets. The Fed has provided $2 trillion in money/loans to a wide array of banks and has not provided info on just which banks have participated.

I can understand that the taxpayers want to know, but you have to understand that in the market if other players (dealers, hedge funds, et al) find out which entities are borrowing, then it is very likely that that info will be used against those borrowers. Their stocks and bonds trading in the market will likely get punished.

By not sharing this info, the Fed is actually protecting the banks and the taxpayers at the same time. Think of it from the standpoint of a card game. if you know what somebody else is holding, you can obviously change the way you play your own hand.

10. I almost forgot to post that Circuit City folded for Chapter 11 on Monday. Retail, especially any form of higher end retail, is going to be in for a very tough time. Shopping malls will lose some key tenants as well.

11. I also almost forgot to post that American Express filed to become a bank holding company (just like Morgan Stanley and Goldman Sachs) in order to receive a cheaper source of funding. This indicates that they know their credit card delinquencies and defaults are getting ready to move higher very quickly!! Pay off your credit cards !!

In summary, it is truly amazing when I review these 11 highlighted stories. (Of those, each of the 10 would provide enough ammo for a full-blown front-page article all by itself.)

I hope that people can fully appreciate the gravity of the current situation. This turmoil will not turn around soon. Nothing is served by being alarmist but nothing is served by not treating this fiasco with the respect it deserves.

I wish you all the best.

BREAKING: Obama Land Deal with Rezko and Mutual Bank Subject of New Court Complaint

Truthteller — Sat, 18 Oct 2008 19:24:29 +0000

No Quarter introduced readers to the Mutual Bank in Chicago after a Chicago Sun-Times columnist mentioned how a certain financial institution in Chicago would become the subject of a federal probe to be conducted by Fitzgerald’s prosecutors in relation to the conviction of Antoin “Tony” Rezko. Although I cautioned I did not have conclusive evidence when I argued Mutual Bank is most probably the financial institution in question, it now appears I may have been correct.

For according to a Washington Times exclusive printed today, a Real Estate and Commercial Credit Analyst of Mutual Bank has assumed whistleblower status and filed complaint against his former employer.

The subject of his complaint is the Mutual Bank and its potentially fraudulent reappraisal of the lot on which Obama’s home sits.

Obama, we recall, was only able to purchase the mansion he could not afford in June 2005 as a result of Rita Rezko’s ability to secure a mortgage for the lot on which the home sits from Mutual Bank.

And yes, Obama is involved in this complaint, for his decision to purchase a 10 foot strip of the lot on which his home sits from Rita Rezko in January 2006 was, according to the complaint, the reason why these potentially fraudulent reappraisals of the Rita Rezko lot were drafted.

I quote the Washington Times:

In a complaint filed Thursday in the Circuit Court of Cook County, Kenneth J. Connor said that his reappraisal of Rita Rezko’s property was replaced with a higher one and that he was fired when he questioned the document.

Mr. Connor, a real estate and commercial credit analyst at the Mutual Bank Corp. in Chicago, also noted in the complaint that the bank received a grand jury subpoena in October 2006 requiring it to produce information concerning Mrs. Rezko’s purchase, including the bank’s files on the property.

Mutual Bank, Rita Rezko’s account and the mortgage Rita Rezko received from Mutual for the lot on which Obama’s home sits were the subjects of a grand jury subpoena in 2006. I recommend you read my essay on Rita Rezko, the Obama land deal and Mutual Bank for an explication of why the mortgage she received from Chicago machine banker “Uncle” Amrish Mahajan of Mutual would have raised the eyebrows of federal prosecutors.

The Washington Post continues:

The complaint also said that the grand jury wanted information on Mrs. Rezko’s checking account and loan file and that the Federal Deposit Insurance Corp. (FDIC) had audited the Rezko file - although Mr. Connor’s lower reappraisal had been replaced with a higher amount.

“Connor’s internal whistle-blowing activity at Mutual Bank implicates Mutual Bank and the potentially guilty officers thereof to prosecution under federal and Illinois statutes,” said the complaint, filed by attorney Glenn R. Gaffney.

The complaint said Mutual Bank officials could be guilty of making false statements, willfully overvaluing property, bank fraud, witness retaliation, willful violation of a lawful subpoena, FDIC violations, and state banking regulations…

According to the complaint, Mr. Connor reviewed the appraisal of the Rezko property by another firm, Adams Appraisal, which had set the value at $625,000. Mr. Connor’s complaint said that he told his bosses in a report that the property had been overvalued by at least $125,000 and that a “reasonable and fair evaluation” should have been no greater than $500,000.

Why would Mutual Bank desire to inflate the value of the Rezko property on which the Obama home sits? Why would Mutual Bank risk obstructing justice? A paragraph in the Washington Times exclusive answers these questions. I quote them again:

The complaint said the Rezko loan was approved by Mutual Bank President and CEO Amrish Mahajan and others so that Mrs. Rezko could buy a 9,090-square-foot vacant parcel of real estate. It said that in January 2006, Mrs. Rezko and Mr. Obama, along with his wife Michelle, signed an agreement to sell a 10-foot strip of the property to the Obamas. At that point, according to the complaint, Mr. Connor’s firm asked him to conduct the reappraisal.

Connor, in other words, was fired for noting that the value of the property had been inflated.

For if Mutual adhered to Connor’s appraisal, Rita Rezko would have received less money from Obama for the ten foot strip of land next to his home he purchased from the convicted slum landlord’s wife.

And Mahajan, the CEO of Mutual, had an interest in ensuring Rezko would receive more money from Obama, for Mahajan is deeply imbricated in the Chicago machine that used Obama to funnel government revenue into the privatization of public housing scheme from which Obama’s friends profited.

Now wonder why Mutual removed Connor’s appraisal from the Rita Rezko file.

Mahajan, the Mutual Bank, Rita Rezko and the Obama land deal are now the subjects of a complaint filed with the Circuit Court of Cook County, and Obama’s financial dealings with the Mutual Bank and with Rita and Antoin “Tony” Rezko are the subjects of news articles that explore Chicago corruption and questionable real estate transactions.

I guess the deal really was “boneheaded.”

No Quarter asked readers to focus on the land deal and on Mutual when the Chicago Sun-Times mentioned that a financial institution is the subject of federal prosecutors’ interest, for Obama’s decision to purchase land from Rita Rezko catalyzed all the press on his questionable land deal with convicted slumlord Antoin “Tony” Rezko.

Now we know that transaction was the subject of a federal subpoena in 2006, and now we know a complaint has been filed against Mutual for intimidating employees and attempting to increase the value of the Obama lot most probably in order to ensure Rita Rezko would receive enough money to repay the $500,000 loan she received from Mahajan and the Mutual Bank even though she only earns $35,000 per annum at her government job.

Much more is to be learned about this land deal. But now that it is the subject of a complaint and a federal subpoena filed in 2006, I imagine we will learn that Obama chose Rezko to tour the mansion and purchase the lot on which it sits in order to ensure that he could later repay Rezko for the land he could not afford.

Why else did Mahajan, one of Rezko’s bankers who also sat on the Chicago Plan Commission of Daley with Valerie Jarrett and Allison Davis, manipulate the value on the lot when Obama was ready to repay the Rezkos for the favor?

Must money always be kept within a small network of corrupt Chicago machine cogs?

I imagine we will read more about Obama and his financial dealings with Rita Rezko and Amrish Mahajan’s Mutual Bank before votes are cast in November. It was a “boneheaded” deal indeed, Senator Obama.

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No Quarter dossier on Obama and Rezko:

RezkoWatch contains even more information on Obama’s deep and problematic ties to convicted slumlord and notorious political fixer Antoin “Tony” Rezko.

Also listen to our NQR Radio Show entitled “READING REZKO with Truthteller and SusanUnPC”

About the Financial Institution Mentioned in the Sun-Times: Obama, Tony Rezko, Amrish Mahajan, the Kenwood Mansion & Rita Rezko

Truthteller — Sun, 12 Oct 2008 08:09:52 +0000

**********Truthteller asks bloggers and reporters to direct their attention to Amrish Mahajan and the Mutual Bank of Harvey.**********

Mike Robinson’s AP article entitled “Obama Fundraiser, Convicted of Fraud, Spills Beans,” corroborates what we at No Quarter have been writing for weeks: Antoin “Tony” Rezko is cooperating with federal prosecutors interested in Barack Obama. While the national media’s attention to this topic is long overdue, I am not prepared to state that it is too little, too late. I am, however, disappointed.

Also disappointing but somewhat predictable is the blogosphere’s bungled reception of Mike Robinson’s article. Of course those who have embraced Obama will dismiss the story as so much yellow journalism. One blogger claims that prosecutors are interested in Blagojevich and not Obama. But looming in the blind spot of that blogger’s necessarily tendentious gaze is Rezko’s 9 JUN 2008 letter to Judge Amy St. Eve and the reference to Obama as “Individual D” in the superseding indictment and the proffer of evidence filed by Fitzgerald and his prosecutors during the Rezko trial. Obama’s name can be printed again and again on the surface of the legal documents filed during the proceedings of the Rezko trial, but these writers with all their “naked” insight will clothe the verifiable record with their blindness. Knowledge production, it seems, has been lifted from its evidentiary supports when Democrats write about Barack Obama and Antoin “Tony” Rezko.

And yes, those Democrats include some ostensible Hillary Clinton Democrats. Seizing upon the following quotation in a Chicago Sun-Times column, one blogger believes the AP story heralds the end of the political careers of Alexi Giannoulias and Barack Obama:

Sneed hears rumbles political fund-raiser/fixer Tony Rezko, who is now singing sweetly to the feds from his cell at the Metropolitan Correctional Center, has been talking about his “dealings” with a Chicago bank, which has political connections.

Stay tuned.

While Rezko was a customer of Alexi Giannoulias’s Broadway Bank, where he amassed a debt of $450,000 after writing bad checks at Las Vegas casinos, and while Giannoulias did write loans for Rezko, I do not believe one can aver with the confidence of the blogger I cite above that federal prosecutors are now focusing on Giannoulias, even if Giannoulias was tied to Rezko by his opponent during his 2006 bid for the office of Illinois state Treasurer. Allow me to be clear: Obama bundler, mobster banker and Obama protégé Giannoulias is, to be sure, embroiled in the Rezko scandal and in other aspects of Chicago politics any political observer would find unsavory, but he is not in my opinion the topic of the conservation occurring between Rezko, Rezko’s attorney and Fitzgerald’s team of prosecutors. I do admit he is grist for the mill of impetuous bloggers who desire web traffic and a controversial headline or two, however. Because I tend to rely on evidence and not on hearsay, I believe we should focus our attention on Amrish Mahajan and the Mutual Bank of Harvey, not on Giannoulias and the Broadway Bank, if we are to assign names to the financial institution about which Sneed of the Chicago Sun-Times has heard “rumblings.” Although Mahajan is not known to readers of No Quarter and to the national media, I imagine they will desire more information on the unscrupulous banker once they read the information I unpack below the fold. And yes, Obama is involved, deeply involved.

My interest in Amrish Mahajan and the Mutual Bank of Harvey was picqued by this list of contributors in Rezko’s bundling network provided by the Chicago Sun-Times last March. View the second page of the document, and notice the following entry:

Last name	First name	Obama donations	Rezko connection
Mahajan	Amrish	$2,500	Banker whose bank loaned money to Rezko companies. The bank also loaned Rezko’s wife money to buy a vacant lot next to Obama’s home.

The data available in the Sun-Times spreadsheet is corroborated by the following data, which is democratically available at the Federal Election Commission’s website:

MAHAJAN, AMRISH
CHICAGO, IL 60607
MUTUAL BANK

OBAMA, BARACK
VIA OBAMA FOR ILLINOIS INC
12/20/2003 500.00 24020030170
04/14/2004 1000.00 24020461757

Not only was Mahajan a member of Rezko’s bundling network; his bank, the Mutual Bank of Harvey, granted Rita Rezko the $500,000 mortgage she needed in order to purchase the lot on which the Obama mansion in Chicago sits. As many of you may recall, the Obamas could not have purchased the mansion they could not afford unless transactions for the mansion and the lot closed on the same day. Obama needed to locate someone who would buy the lot, and he approached Rezko, the convicted slumlord with whom Obama toured the property before they mutually agreed to the following arrangement:

The home and lot sales closed on June 15, 2005. A land trust controlled by the Obamas bought the house for $1.65 million, and the Obamas secured a $1.32 million mortgage from Northern Trust to complete that purchase. That same day, Rezko’s wife, Rita Rezko, bought the side lot for $625,000. A $37,000- a-year Cook County employee, she secured a $500,000 mortgage from Mutual Bank of Harvey.

The structure of this transaction begs the following question: What bank would lend a government employee who earns $37,000 per annum a $500,000 mortgage? What bank would assume such a risk?

The Mutual Bank of Harvey, of course, for the Mutual Bank of Harvey’s President is a man who is deeply connected to the Chicago machine that backed Barack Obama. Indeed, Amrish Mahajan was one of Mayor Daley’s first political appointments in 1989, when he was named to a seat on Chicago’s Plan Commission, where he would be joined by Obama’s former boss and Rezko’s business partner Allison Davis and by Valerie Jarrett, Daley’s Chief of Staff who chaired the Commission from 1991-1995. Mahajan, in other words, worked with those who devised and profited from Daley’s failed public housing experiment in Chicago, a public housing policy Obama helped fund as state Senator and US Senator.

Rezko, according to the Boston Globe, was one of the major beneficiaries of Obama’s legislative advocacy for funding of Daley’s public housing experiment. Other major beneficiaries are Jarrett and Allison Davis. Mahajan was also a beneficiary, for his bank had made $3.4 million dollars in loans to Tony Rezko’s slum landlord business since 2002. A banker for one of the slumlords who benefitted from the Daley housing program Obama helped bankroll, Mahajan was returning a favor when he wrote a $500,000 mortgage in 2005 for the wife of one of his clients. Although Tony’s financial problems were mounting in 2005, and although Rita earned only $35,000 per annum, Mahajan underwrote the mortgage. Favors must be reciprocated, I guess, especially when one can satisfy two parties at once: the person with whom one has a complicated relationship in real estate and the politician who helped finance that complicated relationship as state Senator and US Senator.

I doubt federal investigators are interested in the Mahajans solely for their involvement in the property deal involving Obama, Mahajan and the Rezkos. The Mahajans, I believe, are the foci of their probe for many reasons.

Anita Mahajan, the wife of Amrish, has been involved with questionable real estate deals that are the subject of federal probes with Governor Blagojevich’s wife, Patricia
Anita Mahajan exploited lucrative no bid contracts with the Department of Children and Family Services to steal $2.1 million from Illinois taxpayers; she was charged and released on a $250,000 bond in March 2007
“Uncle Amrish” has raised more than a half million for Blagojevich and approximately $50,000 for Mayor Daley, whose father helped launch Mahajan’s banking career
“Uncle Amrish” also helped Obama purchase a house he could not afford

The real estate transaction involving Rita Rezko, the Obamas and Mutual Bank of Harvey is just the tip of the iceberg. Indeed, the Mutual Bank of Harvey seems to be at the center of all the corruption in Chicago. To quote former Donald Perillo, Chicago insurance mogul and son of the lawyer for Al Capone, in the Chicago Tribune article I cite above:

Donald Parrillo said he isn’t surprised to see Mahajan mix it up with politics and business. “He got that attitude from the Parrillo family,” the former alderman said. “He wanted to get in the game.”

And Mahajan certainly is in the game. The banker of the Chicago machine, he is also the man who wrote the mortgage for Rita Rezko that facilitated Obama’s purchase the mansion he could not afford. This is why I believe prosecutors are interested in Harvey Mutual Bank. Not only did Rezko receive loans from this institution; this bank is heavily involved in problematic real estate dealings involving Blagojevich and Obama. And if I may quote Rezko in the 9 JUN letter he wrote to Judge Amy St. Eve:

Your Honor, the prosecutors have been overzealous in pursuing a crime that never happened. They are pressuring me to tell them the “wrong” things that I supposedly know about Governor Blagojevich and Senator Obama. I have never been party to any wrongdoing that involved the Governor or the Senator. I will never fabricate lies about anyone else for selfish purposes. I will take what comes my way, but I will never hurt innocent people. I am not Levine, Loren, Mahru , or Winter.”

Rezko is now talking, and prosecutors are presently interested in a politically connected financial institution. I bet Obama now regrets paying Rita Rezko $104,500 for the strip of the land in the lot on which his house sits in January 2006. Acquired with the assistance of a questionable $500,000 mortgage from Amrish Mahajan’s Mutual Bank of Harvey, this lot and Obama’s desire to expand his yard by bit was the catalyst for all the investigative reports into Obama’s deep ties to Rezko. By the way, Rita’s lot is only accessible through the front gate of Obama’s home; it is not a separate property, and it was never intended to be a separate property.

“It was a mistake to have been engaged with him at all in this or any other personal business dealing that would allow him, or anyone else, to believe that he had done me a favor,” Obama says of the real estate transactions with Rezko. I wonder if now he also believes it was a mistake for him to serve as the legislator who represented and bankrolled Richard Daley, Amrish Mahajan, Valerie Jarrett, Allison Davis and the Chicago Plan Commission. But at least he and Michelle have a house, a house the Mutual Bank of Harvey, the politically connected bank that wrote loans for Rezko, helped them procure in 2005. Too bad that house will be the end of Barack Obama.

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No Quarter dossier on Obama and Rezko:

RezkoWatch contains even more information on Obama’s deep and problematic ties to convicted slumlord and notorious political fixer Antoin “Tony” Rezko.

Also listen to our NQR Radio Show entitled “READING REZKO with Truthteller and SusanUnPC”

it isn’t coincidence…there is a pattern

American Girl in Italy — Wed, 08 Oct 2008 23:30:32 +0000

But sadly, too many people choose to ignore it, or accept it, or just call you a racist for noticing it. But the pattern is there. It begins like this:

Obama has a friend or associate that is questionable.

Video or articles surface of Obama thanking them, supporting them, writing a blurb for their book, organizing events for them, campaigning for them, campaigning with them, playing poker with them, serving on boards with them, buying homes with them, dining with them, praising them, using them to prove his christian faith, or hiring them.

Obama then denies their tight relationship - brushes the association off as *a guy in the ‘hood*, claims they are someone who doesn’t advise him, minimizes the actual number of times he attended church, says he can’t vet his vetters, or flat out lies.

Obama THEN completely denies any knowledge of who they really are, denies ever knowing who they were, what they said, what they did, how corrupt they were, any fraud they were up to, and what they were preaching.

People - this isn’t a coincidence. One or two nefarious associations can be examined and written off. But there is a looooooooong list of people that Obama is close to - whether they be family members, business partners, friends or co-workers who are either radicals, criminals, racist, or anti-American.

This list, compiled by The Daily Antikos, is great, but forgot a few people/organizations (that I added at the end):

Jeremiah Wright - Obama’s Pastor for 20 years. Obama did not distance himself until it was political.

Father Pflager - Speaks at Obama’s former Church (only after embarrassment) and Obama gave him money & here they are in 2000.

Bill Ayers - Terrorist. Member of the Weather Underground. Killed Americans. Launched Obama’s Political Career.

Tony Rezko - bought land and sold it to Obama at a discount. Oh yeah, and he is a convicted felon.

Raila Odinga - Defeated in his bid for the Kenyan Presidency. Led Supporters in a Violent Uprising. Obama Campaigned for him in 2006. (at tax payer expense)

Khalid Abdullah Tariq Al-Mansour - I can’t even get started. This is Obama’s Political Grand-father, and his intentions do not seem to be too honorable.

Franklin Raines - Cooked the Books at Fannie Mae. Obama hired him as an advisor on Housing and Urban Affairs.

Frank Marshall David - Communist Obama Mentor.

Emil Jones, Jr. - Ugh… Just Read It.

Rev James Meeks - Spiritual Mentor

Rashid Khalidi - PLO Terrorist.

Here are a few more:

Larry Walsh is the Will County (IL) County Executive, good buddy, political confidante, and frequent poker player with Barack Obama. He is currently being investigated by the FBI.

Kwame Kilpatrick, former mayor of Detroit, convicted felon, has been charged with 10 felonies including perjury, obstruction of justice and assaulting a public safety officer. He will be sentenced October 28th. In June, Kwame Kilpatrick gave Barack Obama his endorsement as a Democratic Party Superdelegate.

Gov. Blagojevich, who is under investigation.

Marilyn Katz, a former member of the ’60’s anti-war group SDS, led protestors against the police outside the Democratic Convention in 1968. Protestors threw nails in the street to impede the police and clashed with police on this occasion and others. Katz has said of her activities that she wanted the U.S. to become a socialist paradise. She is a close friend of Barack Obama. Katz is a member of Obama’s national finance committee.

James Johnson, Former Fannie Mae executive who was vetting candidates for Obama for his VP but had to resign. Johnson is drawing fire over his jumbo home loans from Countrywide Financial, a major actor in the subprime mortgage mess, that may have been below market rates.

Louis Farrakhan, leader of the NOI. Obama helped to organize his Million Man March in ‘95, and he is tight with Reverend Wright and Phleger.

Fannie Mae and Freddi Mac - Obama has recieved the most donations, second only to Dodd, from these companies, and also was thanked, in part with the Congressional Black Caucus, for *being like family* with Fannie and Freddi.

ACORN - Obama is the former Director of Illinois Project Vote, and they have been raided and charged for fraudulent voter registration practices. They are also linked to some of the above associations of Obama’s.

Michelle Obama. *First time in my adult life, I am proud of my country.* Nuff said.

How does someone hang out with that many people, who are, as I said, criminals, radicals, racists or just plain anti-American, and not share some of those characteristics?

And the best excuse Obama can ever come up with is *they aren’t the person I thought I knew* or *I never heard them say those things* or *I did not know they were a domestic terrorist when I was having my first fundraiser in their living room*.

Are we to believe that he truly didn’t know, that he is that uninformed, that naive, that, dare I say, stupid? Or is he just lying?

Why would someone who associates with all those people WANT to be President? And more importantly, why would anyone WANT him to be President?

I just don’t get it.

Rezko Speaks, Prosecutors Interested in Obama Listen

Truthteller — Mon, 29 Sep 2008 22:55:37 +0000

No Quarter reproduced Rezko’s letter to Judge Amy St. Eve dated 9 JUN 2008 in an essay I published on 12 JUN 2008. I quote Antoin “Tony” Rezko:

Your Honor, the prosecutors have been overzealous in pursuing a crime that never happened. They are pressuring me to tell them the “wrong” things that I supposedly know about Governor Blagojevich and Senator Obama. I have never been party to any wrongdoing that involved the Governor or the Senator. I will never fabricate lies about anyone else for selfish purposes. I will take what comes my way, but I will never hurt innocent people. I am not Levine, Loren, Mahru , or Winter.”

Either Rezko is “Levine, Loren, Mahru, [sic] or Winter,” or Rezko decided he will no longer relate “the ‘wrong’ things” but the right things he knows about Governor Blagojevich and Senator Obama. For according to a Chicago Tribune article published today, Rezko has met with prosecutors and is considering cooperating with their investigation. I quote the Tribune:

Antoin “Tony” Rezko, a convicted influence peddler who was once one of Gov. Rod Blagojevich’s most trusted confidants, has met with federal prosecutors and is considering cooperating in the corruption probe of the governor’s administration, sources told the Tribune.

Rezko’s possible change of heart—after years of steadfast refusal—has sent ripples through a tight circle of prominent defense attorneys who represent dozens of potential witnesses and targets in the wide-ranging probe.

His cooperation would give prosecutors investigating the governor and his wife access to someone they have described as an ultimate political insider at the center of a pervasive pay-to-play scheme.

Rezko’s trial this year laid bare a culture of scams, bribes and backroom deals stretching from City Hall to the Statehouse. It even became fodder in the presidential campaign of Democratic nominee Barack Obama, whose fundraising and personal ties to Rezko go back more than a decade.

Key phrases in this excerpt are “ripples through a tight circle of prominent defense attorneys who represent dozens of potential witnesses and targets,” “political insider at the center of a pervasive pay-to-play scheme” and “culture of scams, bribes and backroom deals stretching from City Hall to the Statehouse.” Obama, we recall, is the “unnamed political candidate” mentioned in the superseding indictment and in the proffer of evidence filed by Fitzgerald and his prosecutors. I quote the Chicago Sun-Times:

Obama is not named in the Dec. 21 court document. But a source familiar with the case confirmed that Obama is the unnamed “political candidate” referred to in a section of the document that accuses Rezko of orchestrating a scheme in which a firm hired to handle state teacher pension investments first had to pay $250,000 in “sham” finder’s fees. From that money, $10,000 was donated to Obama’s successful run for the Senate in the name of a Rezko business associate, according to the court filing and the source.

Rezko, who was part of Obama’s senatorial finance committee, also is accused of directing “at least one other individual” to donate money to Obama and then reimbursing that individual — in possible violation of federal election law.

This is only a scratch on the surface, however. For as I describe in one of my many essays on the subject of Obama and Rezko, Obama’s relationship with the convicted slum landlord is extensive and elaborate. I quote myself on the years 2003-2005:

2005 is the year Rezko helped Obama purchase the mansion in the Kenwood neighborhood in inner city Chicago. And 2003 is the year Rezko held a fundraiser for US Senate candidate Barack Obama at his posh home in Wilmette, Illinois. Another event of significance in 2003 is Illinois Governor Blagojevich’s appointment of Rezko to the Board that oversees the $30 billlion dollar teachers’ pension fund. This is the same year during which Barack Obama was appointed to the Illinois state Senate Committee on Pensions and Investments by his friend and mentor state Senator Emil Jones. According to the Superseding Indictment filed by Fitzgerald in December 2006, Obama’s appointment to this state Senate committee coincided with Rezko’s attempts to leverage his influence with “high-ranking State of Illinois officials” to oppose a pension consolidation plan that would complicate the efforts of Rezko and Levine to defraud investment firms and the pensions funds of Illinois. Notice also how Obama sat on the state Senate Pensions and Investments Board when Rezko funneled money he defrauded from an investment firm that sought access to the Illinois pensions fund to Obama through Joseph Aramanda, whose son worked as an intern in Obama’s US Senate office in 2005, the year Rezko advised and assisted the Obamas when they purchased the Kenwood mansion they could not afford.

That is only a brief summary of Obama’s involvement with Rezko during the years that are the focus of Fitzgerald’s probe. For more on Obama’s relationship with Rezko since at least 1991, I recommend consulting the diaries whose titles are listed below.

Obama’s ties to Rezko are deep and controversial. Moreover, recently unsealed documents from the court proceedings reveal Judge Amy St. Eve permitted prosecutors to summon witnesses who could provide testimony on Obama’s ties to Rezko. Prosecutors, in other words, were interested in Obama’s role in Rezko’s elaborate web of influence peddling and corruption.

The alarm expressed by defense attorneys who represent witnesses and potential targets in the wake of the revelation that Rezko is cooperating with prosecutors should be of interest to readers of No Quarter. For not only is Obama deeply embroiled in Rezko’s legal woes; Obama was also one of the prosecutors’ many targets. And although Obama’s campaign will claim that “prosecutors during Rezko’s trial never made any suggestions that Obama was involved in anything improper,” they neglect to understand that anything Rezko may relate now that he is cooperating with prosecutors will be used against Barack Obama. Besides, Rezko mentions Obama in his letter to Judge St. Eve dated 9 June 2008. If prosecutors were not pressing Rezko to reveal details about his relation to Obama, why would Rezko bother to mention Obama’s name?

Because Rezko is cooperating with prosecutors who demonstrated an interest in Rezko’s relation to Barack Obama during the trial, I imagine Obama’s campaign and defense attorneys are not pleased with this latest revelation in the Chicago Tribune. And yes, we at No Quarter will keep everyone posted. Rezko, after all, is one of the many reasons we insist on probing Barack Obama’s record.

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No Quarter dossier on Obama and Rezko:

RezkoWatch contains even more information on Obama’s deep and problematic ties to convicted slumlord and notorious political fixer Antoin “Tony” Rezko.

Also listen to our NQR Radio Show entitled “READING REZKO with Truthteller and SusanUnPC”

Why the Left Should Back Paulson….

Steve Diamond — Thu, 25 Sep 2008 16:00:31 +0000

SusanUnPC’s note: We all know Steve Diamond for his investigative work on Obama’s ties to Bill Ayers. Steve is a lawyer, political scientist and law professor. His blog is Global Labor and Politics.
…………………………………………………………………..

The Paulson Plan is not well understood. It is not a bail-out of failing Wall Street companies. Those companies are being destroyed as we speak. Lehman, Bear Stearns, Merrill Lynch - all are gone now. The problem is that the housing debt they created lives on after them and hangs over the heads of ordinary Americans.

Without establishing a new market for those loans growing default rates could threaten, in fact have already threatened, the real economy. The Paulson Plan enables the federal government to step in and “make a market” for real estate where the broken private sector will not dare tread.

Very few Americans seem to understand what is at stake. If the market for mortgage and other asset backed securities is not stabilized by a very large financially sound player, the risk is that it will cause financial markets that ordinarily are very safe to totter. For example, a key market is the commercial paper market. This is a market for short term loans to very sound large businesses like GE, IBM and GM. They borrow billions through their finance arms to fund their working capital. They sell commercial paper to money market funds.

If those funds sell off their CP or refuse to buy newly issued CP then those large industrial companies lose their working capital. Last week, this was happening to a small group of money market funds. As a result, in one example, IBM’s cost of borrowing tripled in a matter of days. To make this even more clear, one of the large players in commercial paper markets are power plants that use CP to finance their purchases of fuel for power plants.

It is conceivable if the CP market fails that power plants could run out of fuel and the lights would start going out.

Fortunately, we have solved this kind of problem before - in the New Deal that rescued the country from the Great Depression. A key institution was the Reconstruction Finance Corporation that pumped money into a moribund mortgage market to lead the way for private capital, in pension funds and elsewhere, to step back in. By renegotiating mortgage payments, by being willing to stand behind the ability of ordinary Americans to pay their mortgages countless homes and businesses were saved by public intervention where the free market had failed the country.

What Paulson and Bernanke propose is very similar to the efforts of the New Dealers.

Here is a description of how that effort worked from someone who was there, Jesse H. Jones:

Lessons from the New Deal

Reviving the Real Estate Mortgage Market

From Fifty Billion Dollars – My Thirteen Years with the RFC by Jesse H. Jones

What is the largest single type of investment in which the American people put their money? It isn’t the railroads or highways or insurance policies or savings accounts or corporate stocks and bonds. It is the mortgage on real estate. From the ten-acre farm to the tallest skyscraper, almost every piece of property in the country has carried a mortgage at one time or another. Mortgages have financed the construction of nearly every home, factory, store, or office building in this country

During the depression the almost measureless market for mortgages went into total eclipse. The RFC [Reconstruction Finance Corporation] helped to bring it back into the light of day – and also into the light of reason.

That accomplishment required a good many years of hard work. Even after the banking structure had been made sound and agriculture was again moderately prospering, and most of the water had been wrung out of railroad finances, the real estate mortgage market remained immobile, congealed with fear. The part taken by the RFC in its recuperation was accomplished without cost to the taxpayer, although we used millions to put life into it. We got the money back and made a small profit for the government. Better still, we helped restore faith and confidence in the orderly financing of real estate.

When the RFC went directly into the mortgage business in 1934 countless mortgage loans were in default throughout the country. Thousands of costly, useful buildings, such as apartment houses, hotels, offices, stores, warehouses, and factories put up by corporations and covered by mortgage bonds, had gone into receivership. At that time real estate mortgages on urban loans alone – all farm and rural properties being out of consideration – aggregated more than thirty five billion dollars.

Of that sum about nine billion dollars in mortgages was held by commercial banks and trust companies and mutual savings banks, seven billions by building and loan associations, and six billions by life insurance companies. Five more billion dollars was in real estate mortgage bonds held by the public. The remainder was held by trustees, educational and charitable institutions, fire and casualty companies, and individuals.

Many of the properties then in default could have been safely reorganized both in the interest of the bondholders and equity owners and without loss to the new money. But there was no new money available in the real estate field – none for retirement of maturing mortgages, none for new construction except, in spots, from one of the more prosperous life insurance companies….

In the booming 1920’s many of our larger cities had been overbuilt or at least expanded in advance of requirements by optimistic promoters.

The mortgage bond houses which financed these promotions not only charged excessive interest rates but, to make matters worse, required amortization payments much beyond the earning power of the properties even in prosperous times.

But this was not a valid reason for forever condemning real estate or real estate securities….the whole real estate market couldn’t remain in collapse….Having convinced ourselves that there was no mortgage money available to save the situation, we asked Congress in 1934 for authority to buy preferred stocks in mortgage companies, much as we had been doing in banks…But we were never able to get anyone to start a mortgage company. Times were so pessimistic that no one would put up money for common stock in such an enterprise….

So, in the spring of 1935, we started the RFC Mortgage Company with a capital of $10,000,000 which later was raised to $25,000,000. The company did a lot of good, and it made some money for the government.

We bought and sold…mortgages to make a market and encourage financial institutions to buy them. We wanted to prove that the mortgages were good and then withdraw from the field….

We immediately offered to buy…mortgage[s]…at 99 per cent of the face value of the mortgage and to sell it at par. We soon had insurance companies and other big investors interested. Then we raised our price, paying par for the mortgages and selling them at a slight premium. They finally became a popular investment with fiduciaries and trust companies.

[Over time this effort resulted in] profitable enterprises for the government as well as a great help to the public….

Bloggers Who Think Dig Into Obama Mortgage Loan Story

NoQuarter — Wed, 02 Jul 2008 23:02:54 +0000

Amid the chorus of “nothing to see here, move along” flock of bloggers writing ho-hum responses to today’s Washington Post story, there are a few who are thinking deeper:

Our TexasDarlin pointed out the favorable treatment the Obamas received compared to the “neglected slums” of their impoverished neighbors in unimaginably horrific “public” housing that Obama helped privatize so that his rich longtime buddies — like Tony Rezko and Allison Davis — could scoop up tens of millions of dollars of taxpayers’ money while the properties were left in such disrepair that many became uninhabitable.
LisaB addressed the mysterious payments of property taxes for the Obamas.
Now, Flopping Aces resurrects the mystery of Iraqi billionaire Nadhmi Auchi who helped an in-debt Tony Rezko (in exchange for what?) around the time Rezko somehow managed to help the Obamas buy their mansion:

While there is no evidence that the bank in question had a program like Countrywide did, it sure does smell like political favoritism. Not as big of a deal as Johnson’s, Dodd’s, and Conrad’s, but you combine that with Tony Rezko’s involvement in the house deal when Rezko did not have the money to buy the property (at which point Iraqi financier Auchi comes in) and you get a fishy smell.

Ah. Nadhmi Auchi. Flopping Aces, a few months ago, reported:

Who is Auchi? He is an associate of Saddam’s who gave Rezko some big bucks and soon after receiving those big bucks Rezko helped Obama purchase a new home by buying the empty lot next to it at the same time. Auchi was convicted of fraud in France and was banned from entering the US in 2005. …

How in debt is Tony Rezko? During his federal trial, in March 2008, it was reported he is $50 million in debt. In fact, ABC News used this headline, which I cited in my story, “ABC News: Rezko $50 million in debt [Updated x3]“:

Rezko In Debt $50 Million; How Did He Afford Obama Lot?
Court Transcript Says Rezko Depends on Family Handouts of $7,500 a Month

In the same story, I wrote:

[F]rom the ABC News summary: Rezko “told the judge he had no current source of income, saying his last business deal involving a proposed power plant in Iraq had been cancelled.” That venture involved convicted Iraqi billionaire Nadhmi Auchi. See Larry Johnson’s story, “Will Rezko Blow Up Obama?“

Of course, the Rezko scandal hasn’t derailed Obama, so protected by the media. If the Clintons were similarly indebted to an indicted (and now convicted) slumlord who bilked taxpayers out of hundreds of millions of dollars, you’d hear the story ad nauseum.

Here’s more from my March story that owed much to ABC investigative reporter Brian Ross’s digging — including the laughable purchase of the adjacent lot by Mrs. Rezko, who had no financial means and obviously couldn’t rely on her heavily in-debt husband — which begs the QUESTION: Who supplied the money that enabled the Rezkos to make possible the purchase of the Obamas’ $1.6 million mansion?

Rezko’s bleak financial picture raises the question of how the Rezkos were able to buy a vacant lot adjoining the home of Sen. Barack Obama in 2005, at a time Rezko says he was already in deep debt.

Rezko also reveals in the testimony, before Judge Amy St. Eve on Jan. 16, 2007, that he already knew he was under federal investigation at the time of the land purchase and had hired a criminal defense attorney to deal with the “feds.”

Obama says he sought Rezko’s help because the house he wanted to buy in Chicago’s Hyde Park came with an adjoining lot the seller wanted to sell at the same time.

Unable to afford it himself, Obama says Mrs. Rezko bought it for $625,000, and then later sold a strip of the lot back to Obama so he would have a larger yard. Obama says he paid Mrs. Rezko a fair market price. …

Here’s a bit more from the ABC News story:

… Mrs. Rezko makes $37,500 a year.

[...]

According to the transcript, Mrs. Rezko sold the vacant lot a few weeks before the hearing, with all proceeds going to pay previous debts.

Asked how he was able to pay his lawyer, Joseph Duffy, Rezko said family and some unnamed “friends” were paying his legal bills.

Duffy told the judge, “Mr. Rezko has not provided us any money since his indictment.”

Rezko told the judge he had no current source of income, saying his last business deal involving a proposed power plant in Iraq had been cancelled.

He said he had an ongoing relationship with Nadhmi Auchi, a London-based Iraqi billionaire convicted on French fraud charges, who Rezko described as a close friend and business associate. …

Okay, you “professional” journalists — like Politico’s Ben Smith who calls the Washington Post story “padded” and is done with it:

– Tell me how the Rezkos got the money to enable the Obamas to buy the mansion they couldn’t afford.

– Tell me that Nadhmi Auchi’s money didn’t give the Rezkos the funds they needed to buy the vacant lot required for the Obamas to close the sale on the mansion.

– Tell me what Nadhmi Auchi got out of helping Tony Rezko. Billionaires don’t get that rich by helping desperate businessmen who are under federal indictment and facing long prison sentences.

– Tell me that major Obama campaign contributor Susan Crown, on the Board of Directors of Northern Trust mortgage company since 1997, didn’t make a phone call or two to make sure the Obamas got a favorable mortgage loan.

– Tell me why Barack Obama promised Maytag workers he’d fight for their jobs and took their hard-earned money for his campaign, then turned around and got a big donation from Maytag board member Lester Crown (as well as his family and friends), but never said a word to Crown about saving those workers’ jobs?

And, while we’re at it:

– Tell me why state senator puppetmaster Emil Jones put Barack Obama on the state senate pensions committee for three months, during which time that committee defeated an effort to consolidate state pensions? At the same time that Tony Rezko was fighting the consolidation because it would have defeated his schemes for dipping into individual minority-owned pension management companies.

Dear readers, if you want to know more about Nadhmi Auchi and Tony Rezko, click here. We’ve been on these stories since last year.

Again: If Nadhmi Auchi were involved with Hillary Clinton, every American would know his name and his sordid dealings with Saddam Hussein, his conviction in France, and his billionaire status.

But it’s rare that a journalist gets to write about stories like these, let alone get any prominent coverage of his or her story.