Posts for the category "Doug's Money Matters"

Peace on Earth!

As the last few days before Christmas speed by with a whirlwind of activity. Sue and I took time to go to Glenn Beck’s “Christmas Sweater”. Last night. What a blessing! For those who are not fans of Glenn Beck, You will love this anyway and may gain some insight into his strange behavior on the Radio. For those who are fans this takes on a whole new dimension. If you were not able to attend one of his stage performances , I strongly recommend his best selling book by the same title.

Sue and I are living the American Dream as we enter the down hill side of this race. Fortunate to have overcome many obstacles including my paralysis, alcoholism, PTSD, bankruptcy, suicide of my brother and father. Sudden loss of my mother and many medical, emotional and financial challenges in our lives together.

Now comes the reward for persevering and overcoming with God’s direction and power. We now have the blessing of freedom, financially, spiritually, emotionally, and with 2 successful adult children and a wonderful Granddaughter to bestow our blessings on we celebrate the ability to give back abundantly.

We have been blessed in countless ways and return those blessings in more creative ways daily. We have shared time and fellowship also with many of you here at Allmilitary.com over the last year and have cherished that time.

We want to sow into each of you some of the blessings we have received over the years and will continue to share this wisdom, gained at a great price.
The most valuable commodity we have to share is this wisdom. Some will ignore it, some will receive it and not use it to move the ball forward, some will pick it up and make it a part of who they are and become prosperous as a result. Hopefully most of you will be in the latter category and share it with others as well.

What ever you choose to do with this gift we bring, be diligent and tenacious in all you do. Live zealously and celebrate both trials, challenges and triumphs equally.

The words of this Christmas song express our love and prayer for each of you this year as you face your own trials, challenges and triumphs.

I heard the bells on Christmas day
Their old familiar carols play,
And wild and sweet the words repeat
Of peace on earth, good will to men.

And thought how, as the day had come,
The belfries of all Christendom
Had rolled along the unbroken song
Of peace on earth, good will to men.

Till ringing, singing on its way
The world revolved from night to day,
A voice, a chime, a chant sublime
Of peace on earth, good will to men.

And in despair I bowed my head
“There is no peace on earth,” I said,
“For hate is strong and mocks the song
Of peace on earth, good will to men.”

Then pealed the bells more loud and deep:
“God is not dead, nor doth He sleep;
The wrong shall fail, the right prevail
With peace on earth, good will to men.”

Written in the darkest days of the Civil War by Henry Wadsworth Longfellow.

Blessings of our Father and Savior to each and all!

Merry Christmas!

THIS IS NOT ANOTHER Y2K!

This is no Y2K.
People better get their heads out of their rear. We have been following this thing since 1993.

This is what we do!!

This is already the worst international financial crisis in history.

Why does everyone want to put their heads in the sand and pretend this isn’t happening.

As a Christian Financial Ministry we serve as “Watchmen on the Wall”. All that you and I have been given stewardship over is OUR responsibility. We must seek God and his wisdom instead of these godless idiots on Wall street and in the Government.

There are things for us to do and things we can do to protect what we are given authority over.

401k’s, savings, investments, debt, homes. We not only can but we must seek the council of those who have Godly wisdom for these days.

God has given Faith-Full Family Life Ministries and it’s sister Forward Financial Group, Biblical wisdom in how to not only preserve but prosper in these dismal days. You don’t need to only pray; you need to put feet to your faith and take action.

Thousands of our people have been able to not only avoid loss but actually make money in all of the last 6 or 7 years by using the wisdom we have gained. 3 trillion dollars of mutual funds, 401k’s 403b’s IRA’s Roth IRA’s SEP’s Deferred Compensation plans, Thrift savings plans,have been rescued from loss. Don’t sit there waiting for God to rain Mana on your head.

DO SOMETHING!

We stand ready to help those who will be helped to take Godly authority over what you have been given stewardship over.

Doug’s Money Matters is a section of the VAJoe Blog to ask for quick financial tips and advice from an expert with more than 20 years experience in counseling families to live without debt and to reach there financial potential. Please leave comments on this Blog. You can learn more about the Money Matters advisor at his website. The posts and comments by JoeMoneyMatters reflect his two decades of financial counseling experience. VAJoe.com does not endorse any financial strategies, but offers this blog as a service to its site members for discussion.

visit http://dkirk.forwardfinancialgroup.com for more information.

How should a Christian react to the election

This was written by a Christian Minister named Dutch Sheets. I think it is worth a look

November 6, 2008

I feel certain that many in my stream of the Church want a statement from me concerning Tuesday’s presidential election. I will be frank in my remarks but I do not, however, intend to vent anger or attack anyone. I have read several statements from friends and colleagues I respect very much.
Their thoughts are well stated and, for the most part, insightful. None of them, however, seem to want to say some things that I believe need to be said. I do not claim infallibility or to have the final word, but my convictions run deep and I believe I bear a God-given responsibility to share them.

Was This God’s Will?

Was what happened Tuesday God’s will? I am quite confident it was not. America was offered a very clear choice between moving further toward protecting the unborn or further away; between a Supreme Court that would move toward honoring God, life and morality or away from it. The stakes couldn’t have been higher nor the cost greater. As a nation we put on blinders concerning Barak Obama’s background, associations, beliefs and practices, and set these causes back years, possibly decades.
And in doing so we took another step away from God and His plans for America, and another step toward judgment.

Judgment Will Increase

This is not a fire and brimstone warning from an angry, legalistic preacher. In fact, I feel more sadness and grief than anything else.
Perhaps I feel what Jesus felt as He wept for Jerusalem while announcing its judgment. I am not hoping for judgment; I am saying it is inevitable. I don’t know where the unbiblical belief comes from that says a nation can live any way it pleases, can reject God and His ways-even mock Him-and not receive His judgments. Nor do I know when the belief came that it is always mean-spirited or judgmental to warn of these things. To the contrary, I believe it is our responsibility.

In warning of judgment, I am not suggesting that God is going to intentially and directly hurt people. Much judgment is simply the absence of God’s protection and provision, caused by a rejection of His laws and ways. We have been experiencing some forms of judgment in America for years, but God in His incredible patience and mercy has kept us from the level we’ve deserved. I believe this will change to a degree and judgment will now
increase:

* For those in the Church who aligned themselves with pro-abortion forces, I believe judgment will result.

* For leaders in the Body of Christ who refused to take a stand for fear of losing people, money, and tax-exempt status-I believe there will be a degree of judgment.

* For those, both within the Church and without, who voted money over morality-a potential raise or better health insurance over the life of a baby-there will be judgment. (The irony is that this decision to base one’s vote on the hopes of a better economy won’t produce the hoped for result anyway. The scriptures teach that it is righteousness which exalts a nation and that the nation is blessed whose God is the Lord.)

I have heard the argument that God cares as much about social justice issues (such as poverty and racism) as He does abortion, making a vote for Obama OK. I certainly believe God puts a very high priority on caring for the poor and I, too, have wanted to see equality demonstrated through a “minority” president. But to equate having a better income or the desire for a first black president, regardless of his positions on abortion and morality, to the issue of killing 50 million babies is not justice-it is a gross distortion of justice and great deception. I fear that we have been desensitized to this issue of abortion. I believe it kills babies and takes innocent life. I also believe it is blood sacrifice that empowers demons. Let’s not forget this in our noble attempts to be kind and conciliatory.
For African Americans I can easily see how it could bring healing to have a first black president, just as it would be for Native Americans to achieve this or for women if a woman were elected president. Again, I have wanted to see justice in this way. I am only saddened that the price for this healing ended up being Barak Obama, a man that will set the cause of life and, most-likely, our God-given destiny as a nation back so drastically. (I also realize there are some who interpret any criticism of Obama as racism. Racism is so NOT what I am about nor what I live, that I will not even dignify any such accusations with a response.)

What Can We Expect?

What are some of the judgments we can expect on our nation from this election?

* More economic woes
* More violence in an already violent nation
* Disease and death (satan, who is responsible for these things will have greater inroads to our nation.)
* Natural disasters (weather-tornadoes, hurricanes, floods, drought; fires; earthquakes; etc.)
* Terrorism (they will fear us much less now)
* War, perhaps on our own soil
* Judgments relating to the Court. The stacking of the Supreme Court against the sanctity of life and God’s influence on America will occur, which will in turn cause the shedding of more innocent blood, more rejection of God’s laws and the stealing from us of our godly heritage-all of which will perpetuate a cycle of even more judgment.

How Did This Happen?

I’ve been asked if this could have been averted had there been more prayer. I’m not sure. I believe there was a remnant of Christians fervently praying over these elections-I don’t think there was anything more they could have done. Others, obviously, should have done more. The complacency and lack of discernment concerning our real condition in America-especially by the Church-is both appalling and horrifying. America is in serious trouble and it seems no one wants to say it. Fewer still are willing to do anything to change it.

Though I understand our reasons, we must be careful in our attempts to placate our feelings and calm our fears through religious phrases like “God is still on the throne” or “God has a plan”. He was on His throne 35 years and 50 million babies ago. And He had a plan back then. The problem is, it was us. I understand our reasons for waving high the banner of God’s sovereignty at times like these-it gives us hope. I will wave it, as well.
But please be careful with this. Too much emphasis on God’s sovereignty and we’re worthless; too little and we’re hopeless. Maybe we should say, “we lost a critical battle but God will give us strategy to win the war.” Then find the strategy.

But still yet, since God is usually willing to work through a remnant, I thought we had enough prayer. Obviously, God decided otherwise. There comes a time when He will not forgive or bless the majority based on the prayers or actions of only a few. America rejected God and asked for a king; I believe we now have our Saul (see 1 Samuel 8:5-7)-a man who does not have God’s heart for America but his own. Like Israel in scripture, our nation believes it can turn from God and still be blessed. In His mercy and justice He will show us otherwise.

Like many, believing I had many promises and confirmations that God would “grace” us with a pro-life president in this election, I failed to consider strongly enough that all promises-even scripture-are conditional 99.9% of the time. Though I never prophesied or made guarantees that McCain-Palin would win, failing to factor this principle in strongly enough no doubt caused me to share my optimism with others inappropriately. If this caused any harm or confusion, I apologize.

Has the fact that my prayers weren’t answered shaken my faith? No. I’m a little confused and discouraged. I’m also somewhat angry at the nation in general and much of the Church. Mostly I’m grieving over the nation and what this will cost us. I am not, however, angry with God and do not question His justice. And it is not true that we wasted our time, energy and money in our efforts anymore than it is a waste when we share the gospel with people who don’t get saved. We must keep in the forefront of our thinking the fact that ultimately we are doing this for Him and that He will reward us for our faithfulness. And who knows, perhaps He will store up all those prayers for the next battle (Revelation 5:8, 8:3-5).

A friend and fellow warrior said it well,

“We did ‘give it our all.’ I know the Lord was pleased with that. A coach wants to know one thing at the end of a heartbreaking sports loss: ‘Did you leave it all on the field?’ (your passion, your commitment, your strength, your courage, etc.) I know that we ‘left it all on the field.’ We didn’t hold anything back until the game ended. Tragically, it ended in defeat. We will rise for another day because Jesus is worthy.”

Where Do We Go from Here?

Does this election outcome shake my faith that we can see a great awakening and ultimately reformation in America? Absolutely not (and it strengthens my resolve). We will simply get there through greater pain and loss. Even my passion to see the Supreme Court shift is not from a presupposition that there can be no spiritual awakening without it. It is simply due to my deep conviction that their decisions bring so much death, destruction, curses and judgment to America; and because our full destiny as a nation is unquestionably linked to their decisions. So, yes, we will get an awakening and reformation; but the reality is that this reformation of the nation will reform the Supreme Court (and government, in general), not vice-versa. My faith has never been in people or a political party; my faith is in the God who works through them.

I’ve been asked if my feelings about Sarah Palin have changed. They have not. I believe she is an Esther, a Deborah, with a huge mantle from God for reformation. God has a great destiny for her related to this nation if she chooses to continue down this path.

So, in conclusion, we must re-group as an apostolic, praying church and advance. We must maintain an immovable faith in God, His plans for America and His mercy. And we must move beyond simply asking God for a spiritual awakening and ask Him for strategy to produce reformation, as well. I, for one, am just getting started!

For God and this great nation,
Dutch Sheets

The Mortgage Industry Meltdown, Who Done It!

by
D. James Croft1
There’s a lot of finger pointing now concerning who’s responsible for the current financial meltdown. The culprits named today include: greedy Wall Street executives, the Bush administration, the Clinton administrations, Congress, the Securities and Exchange Commission, the Federal Reserve Board, banking regulators, perpetrators of fraud, and many more.
So really, “who done it?” The answer to that question is the following: To one extent or another, all of the above.
What we have been experiencing is a “perfect storm” in the world of finance. And it’s a category five. The amount of damage being visited on financial institutions in the United States and abroad is so great and so extensive that no single factor or perpetrator can be identified as the primary cause. Many factors and human mistakes, most of which are interrelated, have come together in an unfortunate convergence that has brought about these financial problems.
Below, I have laid out, in a somewhat simplified form, my view of what has transpired in the recent past. I have emphasized the happenings in the mortgage industry since they are at the heart of the problem and because that is the industry I know. I will focus on the failures of Fannie Mae and Freddie Mac and touch only lightly on securities dealers like Merrill Lynch and Lehman Brothers, since I have less familiarity with them.
The factors and players discussed below are a “dirty dozen” listed in their rough order of impact.
• Changed Structure of the Mortgage Industry
• Privatization of Fannie Mae and Freddie Mac
• Mortgage Industry and Wall Street Innovations
• The Rating Agencies
• Hubris (“We can price for risk” and other generally arrogant assumptions)
• Congress and Weak Regulation
• Inexperience and Naiveté of Mortgage Industry Managers
• Changes in Accounting
• The Press and News Media
• The Housing Bubble
• Borrowers
• Fraud and Misrepresentation
Each of these factors/participants is discussed briefly below. While a “brief” discussion may be helpful to a layman’s understand, it may somewhat oversimplify each of the issues.
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Changed Structure of the Mortgage Industry
Forty years ago, the mortgage industry was dominated by savings and loans like the one depicted in the movie “It’s a Wonderful Life.” An S&L took depositors’ money and then loaned it to people buying homes. These home mortgages were put into the S&L’s portfolio, and the borrowers made monthly payments for 20 or 25 years, or until they sold their home.
It was simple. The S&L industry was called the 3-6-3 industry. They paid depositors 3% for their funds; they made mortgages to home owners at 6%; and they were on the golf course by 3 in the afternoon.
Moreover, the S&L performed every function in the lending process: the salaried loan officer was an employee; so was the appraiser; and so too were the people who collected the monthly payments in a function known as “loan servicing.”
Today most of the functions in the mortgage industry are performed by different companies, each of which has a different expertise and set of motivations. The entire mortgage process is now compartmentalized.
This brings some advantages. Each function is now much more efficient. A big savings and loan used to service mortgages totaling $100 million. And all the accounting that took place was done by hand. Today, specialized companies service mortgages valued at billions of dollars, and computers handle most of the work.
But there are some disadvantages to this efficient and compartmentalized approach. The primary disadvantage is that no single compartment ends up with the full responsibility for the quality of the mortgages originated. No one associated with the origination process ends up “owning” the mortgages, so there is little incentive to make sure they are quality loans.
In fact, everyone gets paid on the basis of the volume of loans originated. It’s always been the case that the real estate agent doesn’t get paid unless the loan is approved. But under the new lending structure, the mortgage broker doesn’t get paid until the loan closes. And now the appraiser, who is often a self-employed entrepreneur, depends for his or her income on referrals made by the real estate agent and/or the mortgage broker. If the appraiser doesn’t “cooperate,” he/she doesn’t get any new business. This Gang of Three end up scratching one another’s back, and at times put loans through the system that are much weaker than they appear on paper. So:
The changed structure of the mortgage industry meant that no one on the loan origination team had an incentive to make good loans—just lots of loans.
The sad refrain you hear among quality control people in the mortgage industry is, “Production (loan volume) is king.” And those who have pushed for better loan quality have been the industry’s Rodney Dangerfields.
3
Privatization of Fannie Mae and Freddie Mac
When they were set up, Fannie Mae (1938) and Freddie Mac (1970) were government agencies charged with buying and guarantying “investment quality” (aka “prime”) mortgages from lenders in order to replenish the lenders’ funds and enable them to make more loans. Initially, the loans they could buy were capped at relatively small amounts to encourage lending to low and moderate income families. That cap, however, has grown over the years and now exceeds $400,000.
The lender is a little like the owner of an orange grove. He/she can sell oranges to individual consumers directly or can sell them to a wholesaler who buys in bulk, using standards that guaranty the oranges’ freshness and sells them to grocery stores, which sell them to consumers. Mortgage lenders (the orange grove owners) sell mortgages to Fannie and Freddie (the wholesalers) who then guaranty the repayment of the loans and sell securities backed by those mortgages to Wall Street Investment Bankers (the grocery stores). They, in turn, sell pieces of these securities to consumers’ mutual funds, pension funds or personal portfolios.
When Fannie and Freddie were government agencies, they didn’t worry much about generating huge profits.
But for several reasons that were legitimate at the time, both became private companies2, or more formally, Government Sponsored Enterprises (GSEs), and their stock was traded on the New York Stock Exchange (NYSE). As with all private companies, making profits, growing earnings and pleasing Wall Street analysts became very important to them. Their executive compensation and bonus plans were tied to their earnings.
Since both Fannie and Freddie made money on each of the loans they purchased and guaranteed:
Both came under pressure to buy lots of loans.
Hopefully, “investment quality” loans, of course, but lots of them. Again, “Production is king.”
And produce they did! When hundreds of savings and loans failed in the early 1980s due to holding fixed rate mortgage loans in their portfolios3, all lenders started looking for ways to sell off their mortgages. Fannie and Freddie were the major buyers. They grew and grew, and so did their profits. Wall Street loved them, and investors loved them. They were growth stocks.
By the late 1990s and the early part of this decade, Fannie and Freddie were buying roughly 60% of all mortgages made. That was about the limit of their ability to purchase loans due, among other things, to the fact they were restricted by law to buying “investment quality” prime loans. They were beginning to run out of ways to grow revenues and profits. That is to say, their very success at doing what they were set up to do threatened their growth in both revenues and profits. To maintain growth, satisfy Wall Street, keep stockholders happy, and generate more profit-based compensation and bonuses, these firms needed to buy even more loans.
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Fannie and Freddie were both in danger of slower growth due to their
having saturated the market with their purchases of prime loans.
Mortgage Industry and Wall Street Innovations
About this time, members of Congress, consumer advocacy groups and the White House (under both Clinton and Bush) encouraged the mortgage industry to make more loans to first-time home buyers, minorities and potential homeowners with less-then-perfect credit. The mortgage industry and Fannie and Freddie responded enthusiastically. This meant they could make less-than-investment-quality loans (aka “subprime”) and increase their volume. Remember, “Production is king.”4
The designers of mortgage loans came to the rescue. The traditional fixed rate 30-year mortgage wasn’t well-suited for borrowers who couldn’t meet the underwriting requirements for prime loans. So many mortgage lenders, with the help of Wall Street, invented new types of loans:
• “Teaser rate” loans: the initial interest charged is below the market rate and increases over time to the point where borrowers pay at the market rate or slightly above (hopefully after borrowers’ incomes increase)
• Negative amortization loans: borrowers make low payments that don’t pay down the principal of the loan at first; the loan balance grows; and larger payments later in the life of the loan eventually pay down the balance (hopefully after borrowers’ incomes increase)
• “Option” loans: borrowers just pay what they can afford each month; if it’s not enough to cover principal and interest, the shortfall is added to the loan balance; the borrowers later “catch up’ by making large payments (hopefully after borrowers’ incomes increase).
• Stated income loans: borrowers with good credit scores don’t have to document their incomes; they just “state” an alleged income figure on the application form, and there is no effort to verify the figure with W-2 forms or tax returns. There mortgage industry assumed that even if borrowers inflated their incomes a little bit, they would “grow” into the stated figures (hopefully after borrowers’ incomes increase)5
One of the reasons the loans listed above were “subprime” is that their eventual repayment depended to a large extent on the assumption that over time there would be increases in borrower income. While that might seem like a weak assumption, it was believed that because the houses themselves were assets behind the loans, they would adequately serve as collateral for the debt. That is to say, if any borrower defaulted, the house could be sold to liquidate the mortgage debt. And home prices were rising so fast that few doubted the ability of the collateral to cover the debt (see the “Housing Bubble” section below).
5
So subprime loans didn’t’ seem too risky if one was assuming growth in borrowers’ incomes and/or continued housing price appreciation. Only the most negative Cassandras of the financial world had the temerity to doubt those two assumptions.
Fannie Mae and Freddie Mac began to buy these types of subprime loans in the mid-1990s. And Wall Street’s financial gurus found ways to take packages of loans purchased by Fannie and Freddie and restructure them into complex securities that were then sold to banks, investment banks, insurance companies, mutual and pension funds and foreign investors.
The “spreads,” or profits, Wall Street could make on repackaging these loans were greater than what they could make on many of their other activities. The push for extraordinary profits, which some would call “greed,” and the herd mentality of Wall Street6 combined to blind many of the players (who should have known better) to the risks of these investments.
Wall Street and lenders invented many new loan products that had never been used before and packaged them into securities whose attributes were both untested and poorly understood.
The Rating Agencies
These complex securities were, in turn, divided into still more complex securities called “tranches.” By this level in the “restructure, package and sell mortgages” game, these mortgage backed securities were so complex that most investment managers at mutual and pension funds didn’t really understand their risks. Rather than hiring their own expert financial analysts to determine these risks, they relied on the securities rating agencies like Standard and Poors (S&P) to tell them how safe the securities were.
Unfortunately, S&P didn’t understand them very well either. Many tranches of these securities were rated as having relatively low risk, based on incorrect assumptions in overly optimistic mathematical models. Even some sophisticated investors who suspected higher risks were present simply ignored their instincts and purchased the securities without sufficient analysis.
Purchasers of mortgage backed securities relied too heavily on flawed credit
ratings issued by rating agencies that underestimated their risks.
Hubris (“We can price for risk” and other generally arrogant assumptions)
If negative amortization, option, teaser rate and stated income loans sound risky to you, you’re right. They all have a greater risk of default than the typical 30-year fixed rate prime loan.
But the economists and financial gurus at Fannie and Freddie, on Wall Street and at the Credit Rating Agencies said, “Yes, these loans and the complex securities they back are more risky, but they can be structured and priced for this increased risk.”
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However, risks can be estimated and priced best when there is a history of performance behind the loans. These were new loans and securities that had never existed before. There was no real-world history. So the gurus built mathematical models and estimated the risks.
Wall Street is known for its bright people. But “bright” doesn’t necessarily equate to “wise.” Wisdom is a scarce commodity, but it is often based on long years of experience that build strong instincts and intuition. The mathematical model makers at Fannie, Freddie, the Wall Street investment houses and the credit rating agencies were often bright without being wise. They grossly underestimated the risks. The new mortgages and the securities they backed turned out to be far more risky than the mathematical models predicted.
When members of the industry or those outside the country’s financial centers raised questions and/or objections, they were told, “You don’t understand,” or “Things are different now.”
The hubris of the mortgage gurus did them in.
Congress and Weak Regulation
It’s hard to know which came first, the chicken or the egg—Congressional inaction or weak regulation. But since regulators can only use their congressionally granted authority, Congress gets first billing.
In the face of the mortgage industry ‘s changed structure, Fannie and Freddie’s privatization and the massive product innovations dreamed up by the industry and Wall Street, the regulatory structure for the mortgage industry remained pretty much the same as it had existed (or failed to exist) in the early 1980s.
The one agency assigned to oversee Fannie Mae and Freddie Mac, the Office of Federal Housing Enterprise Oversight (OFHEO), was underfunded and largely ignored by the two major companies it regulated.7
There were some in the industry who wanted more regulation of Fannie Mae, Freddie Mac and the institutions that make mortgage loans.8 Some participants in both the Clinton and Bush II administrations warned that Fannie and Freddie should be reigned in. Federal Reserve Board Chairman Alan Greenspan testified before Congress that Fannie and Freddie posed “systemic risks” to the economy.
But such arguments seemed academic and arcane. Besides, Fannie and Freddie were massively profitable and seemed very healthy. And they were, after all, helping people live the American dream of home ownership.
There were some in Congress who proposed increased oversight of the two financial giants. But Fannie (especially) was a lobbying powerhouse without equal. Freddie largely rode Fannie’s coattails. Whenever Congress was asked to consider legislation adverse to these two, Fannie
7
would bring in an army of lobbyists who flooded the halls of Congress to fight any proposal that would rein in the GSEs. Their mantra was, “This legislation will hurt homeowners in your constituency.” They won virtually every battle.
It is difficult to know the extent to which members of Congress failed to trim Fannie and Freddie’s sails due to the campaign contributions they received, but both GSEs were active supporters of their friends on the Hill.
In addition, it should be noted that all mortgage lenders that are not federally insured commercial banks or thrifts are regulated by state agencies. Many states treated their mortgage lender licensing functions as revenue generators. They had few requirements to qualify applicants for a mortgage lending license. While a few states have put some teeth into their licensing laws in the past few years, the foundations of the mortgage meltdown were laid in a period when state mortgage regulators were ineffective, underfunded and overwhelmed by the lobbying efforts of mortgage trade groups and Fannie and Freddie.
Blaming the financial crisis on weak regulation is easy, and it’s partly true. But European banks and financial institutions have significantly stronger regulatory oversight than their counterparts in the United States. Yet they too were major purchasers of securities backed by subprime loans, and many of them have needed rescuing. This causes one to ask whether stronger regulation would have been a major deterrent in this crisis.
Regulators were not completely asleep at the switch—they were just dozing. Congress, however, was snoring in a sleep induced by pills it received from the GSEs’ lobbyists.
Inexperience and Naiveté of Mortgage Industry Managers
Weak oversight in the brave new world of mortgage lending might not have created quite so many problems were the managers of the lending institutions wise and wizened. But the front lines and middle management of the mortgage origination industry have always been manned by young people. The mortgage origination process is pressure-packed and a young person’s game.
Unfortunately, many of the industry’s decision makers at the origination level were young and naïve. Few had ever been through an economic downturn. Many acted as though downturns were a thing of the past. When under the pressures for producing a lot of loans (did ever I say “Production is king?”) too many of these “lightly experienced” managers at lending institutions cut corners and ignored time-tested mortgage underwriting principles.
Many people on the front lines of mortgage lending in the past decade
had never seen (or thought about) a housing downturn.
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Changes in Accounting
It is clear that the accountants for Fannie Mae and Freddie Mac “caught” neither the former’s $10 billion overstatement of profits nor the latter’s $5 billion of understated profits. These accounting failures contributed to a loss in confidence about the financial soundness of these two entities. They also put a serious dent in the lobbying power of the two GSEs on Capital Hill, but many in Congress still stood behind them.
A more important problem in the field of accounting for mortgage-related assets is the accounting requirement of “marking assets to market.”
In the past, most assets owned by a company were carried on the company’s books at the historical cost the company paid. If the company bought a machine, it recorded the value of that machine at what the company paid for it and then depreciated it (wrote down its value) over the useful life of the machine. If the machine cost $80,000 and was expected to last for ten years, the company could write down its value by $8,000 each year.
[The analogy that follows is overly simplified, but it explains the concept somewhat concretely.] So what happens if a new invention comes along in the fifth year of the machine’s life, making the machine totally obsolete? If it were sold in the used-machine market, it might bring only $1,000 for its scrap metal value. But on the books of the company it would be listed at $48,000 (the beginning value of $80,000 less four years of depreciation, which is $32,000).
The question can be asked, “What is the real value of that machine, $48,000 or $1,000?” Those who follow “historical accounting principles” would say that the best value is $48,000. Those who advocate “mark-to-market” accounting principles would say $1,000 is correct.
Over the last couple of decades, accounting rules have evolved to the point where financial institutions that hold securities like those that are bundled mortgages have been required to mark them to market.9 Since there is currently a loss of confidence in anything to do with mortgages, there is almost no market for them. So the financial institutions that own any security tied to them have seen the market value plummet and have had to write down these securities and take losses.
The problem with this scenario, however, is that the current loss of confidence is as much a psychological panic as it is an economic reality. Average investors are frightened about owning mortgage-related securities, and managers at mutual and pension funds don’t want to be caught with these supposedly “toxic” securities in their portfolios. So everyone is selling, and few are buying. Therefore, the prices of these items are falling below their true economic value, i.e. the value to which they will return in the long run, after the panic has passed.10
But in the meantime, the financial institutions are required to mark the securities down to panic-sale levels and take losses on their books even though the assets have not been sold. It’s a ludicrous situation.
9
One of the legislative proposals under consideration involves having the SEC “suspend” the mark-to-market accounting requirement for three or four years. Another proposal has the U.S. Treasury buying up these assets that have been marked down below their true economic value and then holding them until the panic passes. They could then be sold in an orderly fashion and might even generate a profit for the taxpayers after a few years. Finally, the Financial Account-ing Standards Board (FASB) is studying ways to let companies estimate the real economic value of any investments for which there is no active market. The selling of securities involving subprime mortgages is virtually dead right now, so that market certainly qualifies as “not active.”
Mark to market accounting has clarified financial institutions’ current economic condition, assuming they have to sell their assets today (at fire sale prices). However, this clarity masks the longer term values these institutions will likely realize.
The Press and News Media
Since panic selling is driving mortgage related securities to values below their true economic value, it’s legitimate to ask, “Why is there such a panic over owning them?”
Part of the problem is the unknown. These securities are designed in such esoteric ways and are so new to the financial markets that no one is sure how they will really behave.
However, a large part of the problem is that the 24/7 media inundates the pages of newspapers/magazines and television shows with a frenzy of stories about how badly these mortgages are performing. It’s true that we are seeing historic highs in mortgage defaults. However, the average person doesn’t understand the true economic values of these securities, and he/she panics. Investment managers at mutual and pension funds panic at the thought of their stockholders or beneficiaries finding them with such “tainted” investment in their portfolios.
So everyone sells, driving prices of the securities lower and fulfilling the dire prophecies of the TV networks’ most inflammatory talking heads. Due to this “crisis of confidence,” it will take a significant amount of time for the true economic value of mortgage backed securities to be reflected in their market prices.
The press has been an echo chamber where contagious panic
has been reverberating louder than the sound at its origin.
The Housing Bubble
Those of us who have been around a long time have seen the investment pendulum swing back and forth between various types of assets. Some of the biggest swings have been between investments in the stock market and investments in real estate. We have been through a number
10
of investment cycles where one type of investment does well and then falters, only to be followed by shifting investor preference for the other type of investment.
In the last half of the 1990s, stocks were hot—especially if they even hinted that they were involved with the Internet. When that bubble burst, real estate became hot (again). The prices of single family homes were rising so fast that some buyers didn’t even bother to move into the homes they purchased. They just rented or held them for six to eight months and then resold (“flipped”) them for a higher price.11 Investor speculation drove prices higher.
People who owned homes felt wealthy. People who didn’t own homes felt panic. With housing prices going through the roof, they feared if they didn’t purchase a home right away, they would never be able to buy one. They grew willing to stretch beyond their means just to get that little house with the white picket fence. Their panic also drove prices higher.
And mortgage lenders accommodated them. This was one of the reasons lenders and Wall Street developed the teaser rate, negative amortization and option loans discussed earlier. A major rationale for these untested mortgages (that flew in the face of time-honored underwriting standards) was that new types of loans were tickets to get homebuyers onto the real estate gravy train.
One of the factors contributing to the inaccuracy of the financial gurus’ pricing models was an assumption that mortgages were among the least risky investments in the world. After all, a family would, it was assumed, cut back on food, entertainment, auto expenses, etc. just to make sure the mortgage was paid. The last thing the average family wanted to do was to default on their mortgage and lose a home.
Housing prices rose much faster than consumers’ personal income. That condition can’t go on forever. Sooner or later, real estate values would have to flatten out, or even drop. Everyone in the mortgage industry knew this. But they were driven (and paid) for generating lots of mortgages. And besides, the compartmentalization of the mortgage industry meant they retained very little of the credit risk associated with the soon-to-be-overpriced homes.
But two things changed that long-held assumption. The first was that many new mortgage loan products required little or no borrower down payment. A default on such a mortgage didn’t cause the borrowers to lose as much as if they had to save for the traditional down payment their parents paid. The second was the fact that many homes purchased to be “flipped” became speculative investments where a defaulting borrower didn’t have to move out—only turn the keys over to the lender.
The housing bubble turned shelter into investment. Many homeowners– with the help of Wall Street, lenders and mortgage securities purchasers–became real estate speculators.
11
Borrowers
The panic and greed of mortgage borrowers contributed to the financial crisis.
Borrower ineptitude and naiveté are responsible for some of the bad mortgages. Asking only a few simple questions would have informed many borrowers about the implications of the loans they were taking out.
One can argue that most borrowers don’t understanding the lending process well enough to know that they are getting into loans they won’t be able to afford. There is some truth in that. Borrowers correctly rely on mortgage professionals to guide them through the process. How-ever, when the mortgage professionals are getting paid to produce high lending volume and bear little credit risk, they aren’t prone to warn borrowers that they might be getting into loans over their heads. The mortgage professions simply said, “If Fannie or Freddie will buy this loan, then they think the borrower is financially qualified. Who am I to question the judgment of the big dogs in the industry?”
Greed, false hopes and financial ineptitude of borrowers contributed to the crisis.
Fraud and Misrepresentation
Of course, some borrowers didn’t really qualify for the loans that Fannie and Freddie would buy. Since most mortgage originators were paid on the basis of their loan production, some fudged numbers and information on borrowers’ application forms. Some of this fudging consisted of:
• Incorrect, overinflated income figures on “stated income” loans.12
• Phony documents in loan files produced using “Desktop Publisher” and other software that can produceW-2s, bank statements, financial statements and tax returns that are very difficult to distinguish from real documents.
• Inflated appraisals written by dishonest or pressured appraisers, some of whom received kickbacks for their “cooperation” and others of whom feared low appraisal values would cause their referrals to dry up.
Some borrowers got into mortgages they couldn’t afford due to the fact that the industry leaders who set the underwriting standards (Fannie Mae, Freddie Mac and the large mortgage insurance companies) lowered their underwriting standards too far. But others got into these loans because commissioned loan officers “adjusted” their mortgage application packages to make them seem qualified—even when they didn’t qualify under the very relaxed standard under which the industry was operating at the time.
These fraudulent loans were often the first to default—sometimes even before the first payment was made. They were the vanguard of the default cascade that began with the bursting of the housing bubble.
12
Most mortgage originators were honest. But some, driven by the
quest for volume (production is king), engaged in fraud and misrepresentation to
make weak borrowers look like qualified borrowers.
Summary
The bottom line is that there were at least a dozen factors that lead to the mortgage meltdown. No single factor could have caused the crisis by itself. They came together in a “perfect storm,” a perfect financial storm of Category 5 proportions.
The rough sequence in which these factors came into play and lead us to the current situation was as follows:
• The structure of the mortgage industry changed to the point where those involved in the origination of mortgage loans bore little risk if a bad loan was made. The fact that they were all paid on the basis of the number of mortgages originated encouraged quantity of loans over quality of loans.
• Fannie Mae and Freddie Mac were converted from government agencies to private companies. This led them to pursue profits, which were largely tied to the volume of the loans they purchased from those who originated the mortgages. They grew dramatically to fill the void created when S&Ls decided (for good reason) they couldn’t hold mortgages in their portfolios.
• The mortgage industry and Wall Street worked feverishly to develop new types of mortgages that would serve those who might not qualify for the traditional 30-year fixed rate mortgage. In the process, they were able to generate many new loans (production is king) that were of questionable quality (“subprime”) and had untested credit performance characteristics.
• Wall Street bought packages of mortgage backed securities from Fannie and Freddie and put them into more complex securities that many in the financial community didn’t understand. Credit rating agencies assigned credit ratings to these complex securities, often using assumptions (guesses) that turned out to be incorrect.
• The complex securities were analyzed by financial gurus who used mathematical models to estimate default rates. The models turned out to be seriously flawed.
• The models and analyses performed by Fannie, Freddie, Wall Street and the rating agencies were based in the assumption that increased credit risk can be priced. However, their assumptions about the level of risk in mortgage backed securities turned out to be incorrect.
• Congress could have reigned in Fannie and Freddie, but lobbying overwhelmed efforts to make the companies change the way they did business. The regulators that oversaw Fannie and Freddie were weak and underfunded due to congressional negligence.
13
• While the “free market” often acts as a deterrent to risky behavior, even in lightly regulated industries, many people in the mortgage origination business were young and had never experienced a real estate bust.
• Mark to market accounting rules have exacerbated financial losses and masked the longer term value of mortgage related securities.
• The frenzied reporting of the country’s 24/7 media has contributed to the “taint” of mortgage related investment. Many money managers, fearing the ire of stockholders and customers if their portfolios contain such investments, have sold them at very low values although, in the longer term, they are likely to prove more valuable than the fire sale prices at which they are currently trading.
• The seemingly inexorable rise in the price of housing appeared to justify risky lending. It was assumed that when mortgages defaulted, the homes could be sold for more than the mortgage balance, and that low or no losses would occur.
• Someone had to sign the papers for all the bad mortgage loans. Those borrowers that were real estate speculators and those that were simply uninformed and naïve contributed to the problem.
• Unfortunately, some of the Big Three in the origination process (real estate agents, loan officers and appraisers) pursued loan volume through “adjustments” of borrowers’ loan applications and other documentation. Some of these loans were the first to go into default and foreclosure. They became the first clouds portending the perfect financial storm that lay just beyond the horizon.
Again, no single factor or player caused this crisis. All the factors cited in this discussion, and perhaps others, contributed. We can argue about the relative importance of each, but all had their part. We can point fingers at people, institutions, administrations, politicians and regulators. We can cite greed and dishonesty. But all the factors worked together, swirling into a destructive vortex that has inflicted widespread damage on the U.S. and world economies.
But storms always pass, and the sun comes out. We need to remember two things:
1) We may have to be patient in waiting for the sun, and
2) We will repair the damage.
1 The author is the founder and was CEO of the Mortgage Asset Research Institute. He retired at the end of 2007. In addition, he served (1988-1990) as the Chief Credit Officer at Freddie Mac. Prior to that (1981-1983) he was the Chief National S&L Examiner at the Federal Home Loan Bank Board (FHLBB). He has a PhD and an MBA from Northwestern University’s Graduate School of Management and a BS in mathematics from Stanford. He currently serves on the board of directors for a complex of 14 mutual funds.
2 Fannie in 1968 and Freddie in 1989.
14
3 In 1980 Congress passed the Depository Institutions Deregulation Act. The act mandated that a committee consisting of the chairs of regulatory agencies that supervised banks, thrifts (S&Ls) and credit unions lift the ceilings on interest rates these institutions paid for deposits. Government dictated deposit rates were to be phased out within six years. Prior to that time all such deposit interest rates were set at artificial levels determine by the government (under a rule known at “Regulation Q”). This committee was so aggressive that it completely deregulated deposit rates in less than three years. Residential mortgages, long considered some of the safest investments in the world, turned out to be very risky—not due to credit defaults but due to “interest rate risk.” The average S&L was paying eight or ten percent for funds and was receiving only five to six percent on the mortgage loans they owned. This created huge losses and caused S&Ls to look for places to sell their mortgage loans.
4 Some commentators have alleged that government pressure to lend to minorities and disadvantaged borrowers had lenders afraid to turn down poor credit risks. These commentators cite the Community Reinvestment Act (CRA) which encourages banks and thrifts to make loans to such borrowers as the main culprit. The problem with this argument, however, is that CRA only applies to federally insured institutions. But 70% to 75% of subprime lending was done by mortgage companies to which CRA does not apply. These lenders were simply anxious to produce more volume, and they didn’t bear the risk of poor quality loans. In addition, Fannie and Freddie were happy to participate since buying subprime loans gave them a whole new market to fuel Wall Street’s growth expectations.
5 The Mortgage Asset Research Institute had a client that saw many of its stated income loans go into early default. This client went back and verified the incomes of the defaulting borrowers with the IRS. It found that almost 60% of these borrowers exaggerated their incomes by half or more.
6 If you doubt that there is a “herd mentality” on Wall Street, just recall how foolishly virtually every investment banking house behaved during the dot.com era. Wall Street players touted companies that had yet to produce a penny of revenue, just because they planned to do business on the Internet.
7 When the agency told Fannie Mae it had to change its accounting practices and restate its financials, Fannie’s CEO Frank Raines publicly criticized the regulator and said he would ignore its direction. He said he would only comply with directives from the Securities and Exchange Commission. The SEC eventually backed the regulator, and Raines resigned from Fannie Mae.
8 A number of lenders formed a group called “FM Watch.” Their function was to keep tabs on Fannie Mae and Freddie Mac loan programs and warn Congress when these companies were overstepping their charters, developing inappropriate products or using their size and position of exert undue influence on the mortgage market. FM Watch had about as much impact as a fly on the hide of an elephant.
9 Some financial institutions like commercial banks classify their assets as either “hold-to-maturity” investment or “trading” investments. They only mark to market those in the trading category. Securities held by investment bankers (Wall Street firms) are all pretty much assumed to be for trading and get marked to market. This helps explain why the recent drop in prices of mortgage backed securities has caused huge losses for these firms.
10 Some economists have estimated that, at worst, the economic values of securities backed by subprime mortgages have dropped by 30%. But the market values for many of these securities have dropped by as much as 60%.
11 At one point in 2005, nearly 25% of all home sales in California involved investors that planned to flip the property.
12 The incomes listed on these loans were so notoriously inaccurate that industry insiders called them “liars’ loans.”

Thanks to new VAJoe member American Mom for sharing this blog with me so I could share it with you.

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Barack Obama:By Elias Crim and Matthew Vadum

Summary: The remarkable ascent of Democratic
presidential candidate Barack Obama
begins with his career as a “community
organizer” for far-left causes in Chicago,
an experience that served as a launching
pad for his political career. Along with way,
Obama acquired some unsavory friends
including sleazy political fundraiser Tony
Rezko and unrepentant Pentagon bomber
William Ayers. Obama promises to carry his
activist spirit into national politics, but does
he also carry the smell of Chicago politics
into the national arena?
CONTENTS
June 2008
Barack Obama
Page 1
Philanthropy Notes
Page 12
“What Obama is proposing goes far beyond
the boundaries of traditional community
service volunteers. Obama wants to bring
the spirit and tactics of community organizing
into the political system, and there is no
road map out there for how to do it.” —John
K. Wilson, Barack Obama, The Improbable
Quest (2008)
The Chicago winter of 1996-1997 was
a bad one, especially for residents of
the Englewood apartment building at
7000-10 South Sangamon. The 31-unit building
had been rehabilitated with a $653,500
loan from the city of Chicago’s low-income
housing fund, another $654,000 in bank fi -
nancing, and $1.9 million in tax credits. The
general partner on the project was Rezmar
Corporation, run by Antoin (“Tony”) Rezko
and Daniel Mahru. But the tenants shivered
for over fi ve weeks without heat because
Rezko and Mahru claimed they lacked the
cash to turn the heat back on again.
Rezko was a successful real estate investor
who owned fast-food restaurants in
Chicago’s inner-city neighborhoods. But he
branched out into politics in the early 1980s
when he met Jabir Herbert Muhammad,
the former manager of retired heavyweight
champion Muhammad Ali and son of Nation
of Islam founder Elijah Muhammad.
Jabir Muhammad asked Rezko to donate to
mayoral candidate Harold Washington, an
African-American challenging Chicago’s
white establishment. After Washington was
elected mayor, Rezko, an Arab Christian who
emigrated from Syria to Chicago in 1971, became
increasingly involved in causes linking
his business interests to the political clout of
Chicago’s black community. For several years
he was even chairman of the Muhammad A
Foundation, an Islamic charity founded in
1975 that in 1985 changed its name from
the Elijah Muhammad Foundation when
the champ lent it his name. Rezko was also
the actual owner of fast-food franchises that
Jabir Mohammed told city offi cials were his.
According to the Chicago Tribune (March
16, 2005), in the late 1990s Jabir Mohammed
was the front man who allowed Rezko
to secure city contracts using Chicago’s
minority set-aside program.
Harold Washington died in 1987 and in
1989, the year Richard M. Daley was elected
to the fi rst of six (so far) terms as mayor of
Chicago, Rezko and Mahru formed Rezmar
Corp., promising to build more low-income
housing in Chicago. Rezmar became the
Daley administration’s favored low-income
housing developer. Rezko’s timing was good:
During these years many neighborhoods on
the South Side were undergoing gentrifi cation,
and the prospect of rising real estate
values attracted a fl ock of developers with
wallets open to make whatever campaign
contributions might be necessary in order
to get business done.
The South Sangamon building was one of
30 low-income projects—containing a total
of 1,025 apartments—that Rezko took on
between 1989 and 1998. In all, Rezmar Corp.
collected more than $100 million by arranging
“public-private partnerships” with the
city, the state and federal governments, and
in bank loans to rehab South Side buildings
intended as low-income housing. Neither
Rezko nor his partner had any construction
experience when they created Rezmar, but
they became experts at working Chicago’s
political system to acquire taxpayer subsidies
for their redevelopment schemes.
Rezko and Mahru also managed the
buildings. Not surprisingly, every one of the
projects ran into fi nancial diffi culties within
six years, according to a Chicago Sun-Times
investigation, and more than half went into
foreclosure. Chicago sued Rezmar on at least
a dozen occasions. “Their buildings were
falling apart,” a former city offi cial told the
Sun-Times. “They just didn’t pay attention
to the condition of these buildings.”
To arrange project fi nancing Rezko frequently
relied on a small Chicago law fi rm,
Davis Miner Branhill & Galland, whose top
partner, Allison S. Davis, was a Rezko associate
and Daley administration insider.
Davis’s name recently surfaced in
Rezko’s trial for money-laundering, fraud,
bribery, and extortion. Witnesses say he was
the go-between in one of the alleged crimes:
an attempted pay-to-play shakedown of
Chicago businessman Tom Rosenberg whose
fi rm managed $1 billion for the Illinois Teachers
Retirement Association, a $40 billion
pension fund. In early 2004 Davis allegedly
approached Rezko about how to secure an
additional $220 million pension allocation
for Rosenberg’s asset management fi rm and
was told that Rosenberg needed to pay Rezko
a $2 million kick-back or raise $1.5 million
for the re-election campaign of Illinois Governor
Rod Blagojevich, a Democrat. At press
time, the trial, which ended on May 5, had
gone to the jury for deliberation. Rezko did
not testify and made no defense, his lawyers
arguing that the prosecution failed to meet
its burden of proof.
Ensnared in Chicago Politics
The sleazy tale of Tony Rezko —corrupt
businessman and political fundraiser— is
hardly unique in Chicago. What makes the
story noteworthy is that it touches Democratic
presidential candidate Barack Obama
who has promised to move America away
from politics as usual. Obama now admits
that becoming involved with Rezko when
he purchased a new home in January 2005
following his election to the U.S. Senate the
previous November was a “bone-headed
mistake.” The terms of that involvement
have received widespread publicity: Senatorelect
Obama and Rezko toured the property
together when it was already known that
Rezko was under criminal investigation.
Obama and his wife Michelle subsequently
paid the seller $1.65 million for their new
home, $300,000 below the asking price. On
the same day Mrs. Rita Rezko paid the same
seller the asking price of $625,000 for the
adjoining 9,000-square-foot lot. In January
2006, Mrs. Rezko sold a 10 foot-by-150 foot
strip of the lot to the Obamas for $104,500,
and in December she sold the remainder of
the property to her husband’s lawyer for
$575,000.
Obama’s previous connections with
Rezko have received less attention, but they
will invite further scrutiny during the election
season and as Rezko’s legal troubles
play out. During that bad
winter 11 years ago when
Rezmar couldn’t afford
to turn on its tenants’
heat, Obama was a thirdyear
associate at Allison
Davis’s law fi rm, which
represented Rezmar. A
standard Rezmar practice
was to team up with
nonprofi t groups that were
clients of the Davis fi rm
to secure government and
private funding for lowincome
housing projects.
The groups included the
Chicago Urban League,
the Woodlawn Preservation
and Investment Corp.
(WPIC), and the Fund for
Community Redevelopment
and Revitalization.
According to the fi rm
and the Obama campaign,
Obama had little association

with Rezmar, generating
only fi ve billable
hours of work related to
Rezko’s business. (The Sun-
Times says none of the billing
records have been supplied to the media.)
However, Obama’s acquaintance with
Rezko goes back even further. He has said that
in the early 1990s, while he was a top student
at Harvard Law School, Rezko offered him a
job—that he did not accept. He admits that
the two men stayed in touch following his
work for Davis, that the Obamas and Rezkos
have had dinners together, and that Rezko
hosted a big 2003 fundraiser at his home when
Obama ran for the Democratic nomination for
the U.S. Senate seat of retiring Republican
Senator Peter Fitzgerald. According to the
Sun-Times (June 18, 2007), Rezko and his
associates have donated at least $168,000 to
Obama’s campaigns, three times more than
what Obama has acknowledged.
Sun-Times research also found that 11
Rezko buildings were located in Obama’s
district during the years when he was an Illinois
state senator (1997-2004). Would the
residents of these apartment buildings have
voted to elect the idealistic young Obama to
the state senate had they known of his ties

to their negligent landlord?
As a young activist in the mid-1980s,
Obama worked with community and church
groups to clean up public housing on Chicago’s
South Side. Protests and demonstrations
could accomplish only so much, so he
switched careers from community organizing
to elective politics. Obama explained his
vision of the agitator-politician to a reporter
this way:
“What if a politician were to see
his job as that of an organizer, as
part teacher and part advocate, one
who does not sell voters short but
who educates them about the real
choices before them? As an elected
public offi cial, for instance, I could
bring church and community leaders
together easier than I could as a
community organizer or lawyer…
We must form grass-roots structures
that would hold me and other elected
offi cials more accountable for their
actions.”
Those words must
ring hollow to the
Rezko tenants.
Obama’s staff says
he was unaware of
Rezmar Corp.’s failings,
which they say
would more appropriately
be handled
by a local alderman.
The irony here is that
Obama understood
that grassroots organizers
could not
succeed unless they
had political allies
in power. And it’s
apparently why he
sought the fundraising
help of a
man identifi ed as a
“slumlord” by his
rival for the Democratic
presidential
nomination, Senator
Hillary Clinton.
The South Sangamon
building finally
had its heat turned on
in February 1997 after the city of Chicago
sued, eventually collecting a $100 fi ne from
Rezmar. At about the same time—January
14, 1997, according to public records—state
senator-elect Obama received a $1,000 campaign
donation from Rezmar.
Community Organizing: From Saul Alinsky
to Martin Luther King
Between his graduation from Columbia
University in 1983 and his admission to
Harvard Law School in 1988, Obama moved
to Chicago where he became a community
organizer. He returned to Chicago with his
law degree in 1991 and resumed advocacy
work as a civil rights lawyer and constitutional
law teacher. A look at those few short
years prior to his election to the Illinois state
senate in 1997 and to the U.S. Senate in 2004
reveals the seeds of his thinking on grassroots
activism and political advocacy.
In 1985 veteran Chicago organizer Jerry
Kellman hired Obama to run the Developing
Communities Project. He paid his earnest
new pupil a salary of $13,000 and assigned
him to the Roseland and West Pullman areas
on the South Side. Here’s how a reporter
from U.S. News & World Report—with
unconscious irony, it seems—described
Kellman’s idea of “self-help”:
“Obama’s assignment was to teach
the poor to rely on themselves in a
very aggressive way—to get what
they wanted from city hall, their
landlords and others in power by
clarifying their needs and banding
together to take action. It’s the kind
of self-help that he preaches today as
a presidential candidate.”
The better term is probably “agitation,”
which in the community organizer’s sense
means making someone angry enough about
the condition of his life that he agrees to take
action to change it.
Mike Kruglik, formerly one of Obama’s
fellow organizers, hailed Obama for his
persuasive powers:
“He was a natural, the undisputed
master of agitation, who could engage
a room full of recruiting targets in a
rapid-fi re Socratic dialogue, nudging
them to admit that they were not
living up to their own standards…
With probing, sometimes personal
questions, he would pinpoint the
source of pain in their lives, tearing
down their egos just enough before
dangling a carrot of hope that they
could make things better.” (New
Republic, March 19, 2007).
Agitation is what Chicago-born Saul Alinsky
(1909-1972), the father of community
organizing, called “rubbing raw the sores
of discontent.” In his classic book Rules for
Radicals, Alinsky prescribed the tactics and
defi ned the goals of community organizing.
Among his “rules”: “Keep the pressure on.
Never let up” and “Pick the target, freeze it,
personalize it, and polarize it.”
“I attended one of Saul Alinsky’s
schools,” Kellman told Foundation Watch
recently, “and most of his principles are still
being used in those schools today.”
Obama’s Radical Roots
But for someone who urges Americans
to transcend their ideological, racial, and
cultural differences, Obama certainly carries
a lot of baggage. National Journal concluded
in 2007 that Obama was the most liberal
member of the U.S. Senate with a voting
record to the left of Hillary Clinton, John
Kerry, Barbara Boxer, and self-described
socialist Bernie Sanders of Vermont. For
many years, Obama has surrounded himself
with extreme, polarizing fi gures. Obama’s
is “as openly radical a background as any
signifi cant American political fi gure has
ever emerged from, as much Malcolm X as
Martin Luther King Jr.,” Ben Wallace-Wells
wrote in a Rolling Stone magazine profi le of
Obama last year.
Left-wing funders are drawn to the
campaign. Philanthropist George Soros is
praying for an Obama victory in November
“I think Obama has the charisma and the
vision to radically reorient America in the
world…I think that he has shown himself
to be a really unusual person,” Soros said.
(New York Review of Books, May 15, 2008)
The political action committee of the abortion
rights group NARAL endorsed Obama
over his female opponent in the race for the
Democratic presidential nomination, and
is sure to spend several million dollars on
his behalf.
Jodie Evans, a co-founder of Code Pink,
a far-left anti-war women’s group, is a socalled
bundler who has collected at least
$50,000 for the Obama campaign. (Human
Events, April 14, 2008) Evans has visited
Venezuela and met with Hugo Chavez to
show her support for his socialist regime.
Code Pink has been in the news for harassing
wounded U.S. soldiers at Walter Reed Army
Medical Center and military recruiters as
part of what it calls its “counter-recruitment”
program. (For more on Evans’s group, see
“Code Pink: The Women’s Anti-War Movement,”
by John J. Tierney, Organization
Trends, December 2006.)
Obama’s most prominent emissary to
the public, his wife Michelle, is refreshingly
honest about the couple’s political beliefs.
On the campaign trail, Mrs. Obama spoke of
the virtues of the coercive redistribution of
wealth: “The truth is, in order to get things
like universal health care and [a] revamped
education system then someone is going
to have to give up a piece of their pie so
someone else can have more.” (Charlotte
Observer, April 8, 2008)
Mrs. Obama made headlines in February
when during a speech in Wisconsin she put
her ambivalence about America on public
display, noting that as an adult she has never
been proud of her country: “For the fi rst time
in my adult lifetime I’m really proud of my
country and not just because Barack has done
well but because I think people are hungry
for change and I have been desperate to see
our country moving in that direction and
just not feeling so alone in my frustration
and disappointment.” (ABC News, February
18, 2008)
At times on the trail, Mrs. Obama’s anger
towards her own country has come through as
she’s lectured Americans on how they don’t
live up to her standards. She implied that if
voters ultimately reject her husband’s bid for
the White House, there must be something
wrong with them: “What Barack and I talked
about when we decided [that he should run
for the presidency] was that we were going
to do this authentically and that this was as
much a test for us about the country and the
[political] process as it was the other way
around.” (“All Things Considered,” NPR,
July 9, 2007)
Here are a few other examples of Mrs.
Obama’s attitude toward the United States:
*America is “just downright mean”
and “guided by fear.” (The New
Yorker, March 10, 2008)
*“Sometimes it’s easier to hold on to
your own stereotypes and misconceptions,
it makes you feel justifi ed in
your ignorance. That’s America. So
the challenge for us is, are we ready
for change?” (speech at University
of South Carolina, January 2008,
available at http://www.breitbart.
tv/?p=68384&comments=1)
*“I don’t think there is a person of
color in this country that doesn’t
struggle with what it means to be
a part of your race versus what the
majority thinks is right.” (CNN,
February 1, 2008)
*“We are living in a time when we
are suffering from a deep empathy
defi cit.” (speech to National Congress
of Black Women, September
30, 2007)
*“Before we can work on the problems,
we have to fi x our souls. Our
souls are broken in this nation.” (New
York Times, February 25, 2008
National Journal identifi ed prominent
radicals on the Obama presidential campaign’s
black advisory council. (“Obama’s
Inner Circle,” March 31, 2008).
One is Cornel West, an African-American
studies professor at Princeton University
who denounces his native land as racist and
patriarchal. He has described himself as a
“progressive socialist,” and has written that
“Marxist thought is an indispensable tradition
for freedom fi ghters.” He visited Venezuela
in 2006 and praised the government of leftist
strongman Hugo Chavez. “We in the United
States have so many lies about President
Hugo Chavez and the Bolivarian Revolution.”
West said he visited in 2006 “to see the
democratic awakening taking place.” Chavez
has allowed terrorist groups Hezbollah and
Hamas to open offi ces in Caracas, and recent
evidence suggests he has also been backing
communist rebels trying to overthrow
the democratically elected government of
Colombia. (See “The American Friends of
Hugo Chavez: Dial 1-800-4-TYRANT,”
by Ana Maria Ortiz and Matthew Vadum,
Organization Trends, March 2008.)
Another campaign advisor is Charles
Ogletree, a Harvard Law School professor
who taught Obama and his wife when they
were law students. Ogletree argues the U.S.
government should pay reparations to the
living descendants of slaves.
Obama’s presidential campaign was
embarrassed recently when a foreign policy
advisor, Robert Malley, had to resign after it
was revealed that he had been meeting with
the terrorist group Hamas, which has called
for attacks on the United States. The resignation
came after Hamas political adviser
Ahmed Yousef said in April that his group
supports Obama’s foreign policy ideas and
hopes he wins the presidency. Obama’s position
on Hamas mirrors U.S. policy. He has
said that Hamas is a terrorist group and that
the U.S. should not enter into talks with it
unless it renounces violence and recognizes
Israel’s right to exist.
Another advisor is Cass Sunstein, a
professor at University of Chicago Law
School who will join the faculty of Harvard
Law School this fall. In his 2004 book The
Second Bill of Rights: FDR’s Unfi nished
Revolution and Why We Need It More than
Ever, Sunstein argues that rights are discretionary
grants from the government to the
citizen. Not quite as far to the left is Harvard
Law School professor Laurence Tribe, who
also serves as a campaign policy and legal
advisor. The liberal constitutional law expert
argued before the U.S. Supreme Court in
2000 on behalf of Al Gore in Bush v. Gore,
the Florida vote-counting lawsuit.
Obama’s fondness for radical ideas seems
to begin during his childhood. In Dreams
from My Father: A Story of Race and Inheritance,
he wrote about the admiration
he felt for the ideals of his Kenyan father, a
Harvard-educated economics professor: “My
father’s voice had nevertheless remained
untainted, inspiring, rebuking, granting or
withholding approval. You do not work hard
enough, Barry. You must help in your people’
struggle. Wake up, black man!”
And what were those ideals? Marxist
and anti-Western ideals, according to an
academic paper written by his father. In
the article credited to “Barak H. Obama”
the economist argued for collective land
ownership and confi scation of private land,
along with Mugabe-style nationalization of
“European” and “Asian” owned businesses
in order to be handed over to “indigenous”
blacks. The senior Obama wrote: “The
question is how are we going to remove
the disparities in our country, such as the
concentration of economic power in Asian
and European hands, while not destroying
what has already been achieved and at the
same time assimilating these groups to
build one country.” (“Problems Facing Our
Socialism,” East Africa Journal, July 1965,
is available at http://www.politico.com/
static/PPM41_eastafrica.html) Aides to
Obama refused to comment on the article,
The Politico reported April 15.
Obama also appears to have been infl uenced
by his boyhood mentor, poet-activist
Frank Marshall Davis, an apologist for the
Soviet Union and member of the Communist
Party USA. Obama refers to him simply
as “Frank” in Dreams From My Father. In
Dreams, Obama describes “Frank” as “pushing
eighty” and as a poet of “some mod
notoriety once” who visited his family in
Hawaii and who was “a contemporary of
Richard Wright and Langston Hughes during
his years in Chicago.”
How do we know “Frank” refers to
Frank Marshall Davis? In a 2007 speech at
the dedication of a Communist Party (CP)
archive, fellow traveler and historian Gerald
Horne, a professor at the University of North
Carolina at Chapel Hill, clarifi ed the relationship
between Obama and Davis:
In any case, deploring these convictions
in Hawaii was an African-
American poet and journalist by the
name of Frank Marshall Davis, who
was certainly in the orbit of the CP – if
not a member – and who was born in
Kansas and spent a good deal of his
adult life in Chicago, before decamping
to Honolulu in 1948 at the suggestion
of his good friend Paul Robeson.
Eventually, he befriended another
family – a Euro-American family –
that had migrated to Honolulu from
Kansas and a young woman from
this family eventually had a child
with a young student from Kenya
East Africa who goes by the name
of Barack Obama, who retracing the
steps of Davis eventually decamped
to Chicago. In his best selling memoir
‘Dreams of my Father’, the author
speaks warmly of an older black poet,
he identifi es simply as “Frank” as
being a decisive infl uence in helping
him to fi nd his present identity as an
African-American…
Horne predicted that:
At some point in the future, a teacher
will add to her syllabus Barack’s
memoir and instruct her students to
read it alongside Frank Marshall Davis’
equally affecting memoir, Living
the Blues, and when that day comes,
I’m sure a future student will not only
examine critically the Frankenstein
monsters that US imperialism created
in order to subdue Communist parties
but will also be moved to come to
this historic and wonderful archive
in order to gain insight on what has
befallen this complex and intriguing
planet on which we reside. (Political
Affairs magazine, a Marxist journal,
republished the speech as “Rethinking
the History and Future of the
Communist Party.” It is available
at http://www.politicalaffairs.net/
article/articleview/5047/1/32/.)
Radical Chicago Friends
Obama’s radicalism seems to have
manifested itself in his Chicago connections
as well.
The Los Angeles Times has reported
(April 10, 2008) that Obama has been a
“friend and frequent dinner companion” of
Rashid Khalidi, a Palestinian-American and
former Palestine Liberation Organization
(PLO) spokesman. Khalidi is the Edward
Said Professor of Arab Studies at Columbia
University. Said, who died in 2003, was a
fi erce critic of Israel and a close associate of
the late PLO leader Yasser Arafat. Khalidi
held a fundraiser for Obama’s ill-fated congressional
bid in 2000, and is a co-founder
of the Arab American Action Network, a
group that provides social services to Arab-
Americans in the Chicago area.
At one point Obama served on the board
of the liberal Chicago-based Joyce Foundation,
a charity that makes grants to a variety
of groups, including environmentalists and
gun control advocates. But the funding for
young Obama’s organizing job came from
the Woods Fund of Chicago, a relatively
small (2006 assets: $72 million), little-known
foundation. Its founder, Frank Woods, was
a prominent telecommunications executive
who donated money to civil rights groups
in the 1950s. The charity began moving to
the left politically in the 1990s, and today
focuses on community organizing, arts and
culture, and public policy.
The Woods Fund was thrust into the
national spotlight in April when during a
live televised candidates’ debate moderator
George Stephanopoulos asked Obama
about his association with a current board
member, education professor William Ayers.
Ayers is an unrepentant homegrown terrorist
who used to belong to the Weathermen,
a violent 1960s radical group. Ayers once
summed up the group’s philosophy: “Kill
all the rich people. Break up their cars and
apartments. Bring the revolution home. Kill
your parents.”
Although Obama’s chief strategist, David
Axelrod, told The Politico’s Ben Smith in
February that Obama and Ayers are “certainly
friendly, they know each other,” the
candidate tried to distance himself from Ayers
during the debate. (Axelrod and Obama
met on one of Obama’s voter-registration
drives on Chicago’s South Side.) Obama
said he was just a child when Ayers, a selfdescribed
revolutionary communist, bombed
U.S. landmarks and that he had little contact
with “a guy that lives in my neighborhood…
who I know and who I have not received
some offi cial endorsement from. He’s
somebody I exchange ideas from [sic] on a
regular basis. And the notion that somehow
as a consequence of me knowing somebody
who engaged in detestable acts 40 years
ago when I was eight years old, somehow
refl ects on me and my values, doesn’t make
much sense…”
But evidence suggests Obama’s connection
to Ayers goes back to at least 1995, and
that he must have known what Ayers, who
has said claims that America is “a just and
fair and decent place” make him “want to
puke,” stood for.
It was 1995 when Ayers and his wife
Bernardine Dohrn, a law professor and
fellow former Weathermen member, held
a fundraising event for state senate candidate
Obama in their home. Dohrn gained
some notoriety when, upon learning of the
murder of actress Sharon Tate in 1969, she
commented: “Dig it! First they killed those
pigs, then they ate dinner in the same room
with them. They even shoved a fork into the
victim’s stomach! Wild!” One attendee at
the Ayers-Dohrn soiree that helped launch
Obama’s career in electoral politics said the
couple was “introducing [Obama] to the
Hyde Park community as the best thing since
sliced bread.” Ayers himself donated $200 to
Obama’s state senate reelection campaign in
2001. (The Politico, February 22, 2008)
Obama served with Ayers on the Woods
board between 1999 and 2002. During that
time, the Fund approved two grants totaling
$75,000 to Khalidi’s Arab American Action
Network ($40,000 in 2001 and $35,000 in
2002, according to its tax returns). The Fund’s
website states that its philanthropy is based
on the axiom that there are “structural barriers
to job opportunities, job retention and
job advancement” that harm the working
poor. In 2005 it made $3.4 million in grants
to such groups as the Midwest Academy
(training for community organizers), Tides
Foundation (community organizing), Center
for Community Change (organizing),
American Friends Service Committee, and
the Association of Community Organizations
for Reform Now (or ACORN, discussed
below), and the Proteus Fund (organizing for
world peace), among others. These groups
engage in left-wing policy advocacy and
social activism.
It is hard to believe that the two activists
exchanged no ideas about political goals and
tactics during their board tenure. (Ayers still
serves on the board.) The two also appeared
on academic panels together. One panel dealt
with juvenile justice issues, and at that time
Obama said Ayers’s book on the topic was
“a searing and timely account.” Both also
worked to reform Chicago’s education system.
(New York Times, May 11, 2008)
In his online curriculum vitae, Ayers
describes himself as “Co-Founder and Co-
Chair” of the 1995-2000 project known as
the Chicago School Reform Collaborative
(the Annenberg Challenge). Obama was the
Annenberg Challenge’s fi rst chairman, and
he served on the “Leadership Council” of the
Chicago Public Schools Education Fund, the
Challenge’s successor organization. Obama
served on this council alongside Ayers’s fa-
ther, Thomas, and his brother, John, in 2001
and 2002, according to the Fund’s annual
reports. Obama and John Ayers also served
on the council in 2003 and 2004, according
to the Fund’s annual reports. (Thomas Ayers,
who died in 2007, had been CEO of Commonwealth
Edison.)
In a 2001 memoir, Fugitive Days, and in
subsequent press interviews, William Ayers
said he had no regrets about bombing New
York City police headquarters, the Capitol,
and the Pentagon in the 1970s. “I don’t regret
setting bombs,” Ayers said of his terrorism in
a New York Times interview that happened
to be published September 11, 2001. “I feel
we didn’t do enough.” When asked if he
would do it all again, he said, “I don’t want
to discount the possibility.”
Decades after Ayers bombed the Pentagon
in May 1972, he giggled about the
experience in his memoir. In a 2001 Wall
Street Journal column about a book signing
event for Ayers’s memoir, John Tabin noted:
“In his book, he writes: ‘It turns out that we
blew up a bathroom and, quite by accident,
water plunged below and knocked out their
computers for a time, disrupting the air war
[in Vietnam] and sending me into deepening
shades of delight.’” Added Tabin: “In
those four little words, ‘disrupting the air
war,’ there is the dark prospect of American
soldiers in jeopardy.”
And who might one of those soldiers
in jeopardy at the time have been? While
Ayers interfered with America’s war effort
and cheered for a North Vietnamese victory
over the United States, John McCain,
whose A-4 Skyhawk attack aircraft was
shot down over Hanoi in October 1967, was
held in captivity by the North Vietnamese
and tortured regularly. Now the Republican
Party’s presumptive presidential candidate
in 2008, he was released by the Communist
government in March 1973.
As McCain languished in the Hanoi
Hilton, Obama’s friends Ayers and Dohrn
spent the 1970s waging war against the
United States and fl eeing justice. They surrendered
in 1980 but a legal technicality led
to all charges against them being dropped.
Ayers gloated: “Guilty as sin, free as a bird,
America is a great country.”
And what a forgiving country it is! After
they retired from their distinguished careers
in terrorism, the couple was welcomed with
open arms by the academy. Ayers is now
Distinguished Professor of Education at
the University of Illinois at Chicago (UIC),
and Dohrn is professor at Northwestern
University School of Law and director of
that school’s Children and Family Justice
Center.
Organizing Strategies
The Woods Fund, with its focus on community
organizing and local activism, was
an ideal fi t for Obama. The group posts on
its website guidelines that describe its “Integrated
Approach to Community Organizing
and Public Policy.” The idea is to show
professional organizers how to direct local
grassroots people to understand that their
goal must be “system change,” not solving
parochial neighborhood problems. Organizers
must learn to steer neighborhood groups
toward more politicized and ideological ends
and away from merely local controversies and
personal disputes. Successful organizing, the
guidelines state, “builds power for effective
action in the public arena.”
Kellman argues that the Woods strategy
of linking community organizing to public
policy is perhaps better described as “Naderite”
rather than following the Alinsky model.
It’s the strategy used by the New York Public
Interest Research Group, Obama’s second
employer out of college.
Here’s what Kellman told Foundation
Watch about models of community organizing
in a recent interview:
“Obama and I have come to disagree
with the Alinsky model, in its key
emphasis on self-interest. ‘See the
world as it is,’ Alinsky used to say, ‘not
as you would like it to be.’ Obama,
I think, turns that on its head. He’s
saying, ‘We can make the world as
it is into the world as we would like
it to be.’”
Kellman points out that Alinsky, an atheist,
disagreed with the views of Martin Luther
King, Jr. and found his approach to organizing
undisciplined because it ignored self-interest
for the sake of (what was for King, at least)
a higher, religious vision of a better world
for us all.
“What really inspired me was the civil
rights movement,” Obama has said. “And
if you asked me who my role model was at
that time, it would probably be Bob Moses,
the famous [SNCC-Student Nonviolent
Coordinating Committee] organizer…” (New
Republic, March 19, 2007). During “Freedom
Summer” in 1964, Moses famously
led groups of civil rights activists to travel
to Mississippi where they organized blacks
to brave white hostility by registering to
vote. It’s notable that Obama does not cite
the example of King here, possibly because
he knew the comparison might smack of
arrogance.
By contrast, here is his friend Kellman’s
comment on Obama’s true vision for community
organizing—and for himself. Kellman
told Obama biographer David Mendell
that he believes Obama is indeed the most
likely heir to King’s legacy, both as an advocate
and moral voice for black Americans.
Kellman thinks Obama saw this role for
himself years ago but has necessarily been
circumspect about it: “If you look at the King
analogy and you look at Barack, Barack has
become the expectation of his people, and
in that sense he is similar to King…And
obviously, that can cause someone to kind
of lose perspective.”
Especially if he’s politically ambitious
and in a hurry. The Sun-Times notes that every
three years since 1995 Obama has aspired to
a more powerful political position. He built
his entire state legislative record (26 bills
passed in a single year) in 2002, the last of
his seven years in the Illinois state legislature.
Not coincidentally, it was the fi rst year since
1976 that both houses in the legislature had
a Democratic majority.
From Little ACORNs…
Let’s look at ACORN, another nonprofi
t organization important throughout
Obama’s career. The radical activist group
was founded in 1970. Unlike most of the
New Left groups that have fallen away as
their members age and acquire children and
tenure, ACORN activists have kept the spirit
of leftism alive.
ACORN is the nation’s largest community
organization of low- and moderate-income
persons, with 350,000 “member families,”
organized into 800 neighborhood chapters
and 104 cities, according to its website.
Founder Wade Rathke also heads the New
Orleans-based Local 100 of the Service
Employees International Union (SEIU),
which donates over $2 million to ACORN
annually, a signifi cant part of the ACORN
network’s $37 million budget. ACORN is
actually several organizations, including the
ACORN Institute (training), the Living Wage
Resource Center, the Wal-Mart Alliance for
Reform Now (WARN), and the ACORN
Housing Corp.
In 1992, Obama took time off from his
new job at Davis Miner to direct ACORN’s
voter mobilization arm, Project Vote, a hugely
successful voter registration campaign that
helped propel Democrat Carol Moseley
Braun into the U.S. Senate by adding an
estimated 125,000 voters to the rolls. Project
Vote is an ostensibly independent 501(c)(3)
that claims to conduct “non-partisan” voter
registration drives, counsels potential voters
on their rights, and litigates on behalf of the
poor and “disenfranchised.”
Its greatest legislative accomplishment is
the National Voter Registration Act of 1993,
commonly known as Motor Voter. But in his
book Stealing Elections (2004), Wall Street
Journal columnist John Fund argues that the
law leads to voter fraud:
“Perhaps no piece of legislation in
the last generation better captures
the ‘incentivizing’ of fraud… than
the 1993 National Voter Registration
Act…Examiners were under orders
not to ask anyone for identifi cation or
proof of citizenship. States also had
to permit mail-in voter registrations,
which allowed anyone to register
without any personal contact with a
registrar or election offi cial. Finally,
states were limited in pruning ‘dead
wood’ – people who had died, moved
or been convicted of crimes – from
their rolls. … Since its implementation,
Motor Voter has worked in one
sense: it has fueled an explosion of
phantom voters.”
In 1995, Obama sued on behalf of
ACORN for the implementation of Motor
Voter laws in Illinois and won. That secured
Obama an invitation to train ACORN staff.
Obama later returned the favor when, as
a member of the Woods Fund board, he
approved frequent grants to ACORN. In a
2007 address to its leaders (who subsequently
endorsed his presidential bid), Obama pr

ACORN’s mission:
“I come out of a grassroots organizing
background. That’s what I did for
three and a half years before I went to
law school. That’s the reason I moved
to Chicago—to organize. So this is
something that I know personally, the
work you do, the importance of it. I’ve
been fi ghting alongside of ACORN
on issues you care about my entire
career. Even before I was an elected
offi cial, when I ran Project Vote in
Illinois, ACORN was smack dab in
the middle of it, and we appreciate
your work.”
ACORN’s practical effectiveness may
be partly due to its PAL programs. PALs are
Precinct Action Leaders who are recruited
from local neighborhoods and trained to build
neighborhood networks. Each volunteer
participant in PAL creates and services a
list of about 100 family, friends, and others
in the local community. The PALs make
sure everyone is registered, informed, and
ready to vote.
Despite Obama’s work for Project Vote,
polls show that clear majorities of black and
Hispanics back voter ID laws. And so does
the U.S. Supreme Court, which on April 28
ruled 6-3 that states can require voters to
show identity cards
Send a Kid to Camp (Obama)
Foundation Watch asked Jerry Kellman
if ACORN has assisted the Obama
presidential campaign in any way. He replied
that its 501(c)(3) status prevents ACORN
from helping as an organization but that
“lots of grassroots members” are assisting.
Hmm. Indeed, it is illegal for a tax-exempt
charitable organization to assist a political
campaign. But given Obama’s friendly relations
with ACORN, one can only speculate
about its role.
Two new programs sponsored by the
Obama campaign are also mobilizing the
grassroots. There is no indication that these
programs have or seek tax-exempt status.
However, they will give young adults and
college students supporting Obama an
unpaid opportunity to learn fi rsthand the
fundamentals of community organizing,
Obama-style.
According to the sketchy information
available on one project, “Camp Obama”
offers activism training for campaign volunteers,
teaching them methods Obama himself
used as a community organizer. “We want
you to stop thinking about Barack Obama
and be Barack Obama,” says Jocelyn Woodards
about the intensive two-day training
course.
A second program, the Obama Organizing
Fellows, will train participants in “fi eld
organizing, messaging and other activities”
and teach them to “organize in a community,
working in conjunction with grassroots leaders
and campaign staff.” Fellows must devote
30 hours per week to the program which runs
from June to the end of the summer. Kellman
has said that the Obama campaign uses
elements of both types of organizing—the
practical and aggressive Alinsky method and
the visionary “movement” style. However,
he compares the Obama campaign—in its
“positive energy”— to the civil rights
movement.
It’s worthwhile to note that the Obama
campaign has stolen a page from Howard
Dean’s 2004 presidential campaign by taking
Internet strategy to the next level. The
campaign not only raises large sums online
from many individual donors but it is collecting
contact information on Obama website
visitors, which could be used in Novembe
for a veritable “children’s crusade” of young
Obama supporters.
ACORN’s active involvement in the
Obama campaign is likely to be signifi cant.
ACORN’s “non-partisan” Project Vote has
announced its plans to register hundreds of
thousands of voters before the November
election. That should concern all Americans
given the record of highly-publicized voter
fraud allegations lodged against ACORN
in Ohio (2004), Wisconsin (2004), Florida
(2004), New Mexico (2004), Colorado
(2005), Missouri (2006), and Washington
state (2007).
ACORN is currently involved in the
fi ght in Congress over how to deal with the
increasing number of home foreclosures.
In recent weeks Republicans have balked
at Democratic plans to include activist
groups in government programs to provide
mortgage counseling. Senator Bob Casey
(D-Pennsylvania) denounced Republicans
attacks on a Democratic bill to provide $200
million to counsel homeowners threatened by
foreclosure, noting that the bill would help
fund ACORN and the Hispanic advocacy
group La Raza. Casey may want ACORN’s
help in bringing foreclosure relief, but its
critics have looked at the group’s record and
decided ACORN is a bad risk. (For more on
ACORN, see “Voter Turnout or Voter Fraud?
Interest Groups Push for Election Reform,”
by Jonathan Bechtle, Organization Trends,
April 2006.)
Reverend Jeremiah Wright
Obama biographer David Mendell believes
community organizer Jerry Kellman
was the fi rst signifi cant infl uence on Obama’s
thinking about the connection between politics
and community. But he says the second
key infl uence was Rev. Jeremiah Wright, the
founder of Trinity United Church of Christ.
Until their recent public break, Wright and
Obama were close. Wright, whose words
inspired the title of Obama’s book, The
Audacity of Hope, offi ciated at Obama’s
wedding and baptized his children.
In the spring, Wright became a household
name throughout the nation as the media began
to draw attention to the preacher’s fi ery
sermons and speeches blaming America for
the 9/11 terrorist attacks, and accusing the
U.S. government of inventing the HIV virus
“as a means of genocide against people of
color.” In one well-publicized 2003 sermon,
Wright urged his parishioners to condemn
the United States. “No, no, no, God damn
America, that’s in the Bible for killing innocent
people. God damn America for treating
our citizens as less than human. God damn
America for as long as she acts like she is
God and she is supreme,” he said. And under
Wright’s leadership, on July 22, 2007,
the church newsletter reprinted a terrorist
political manifesto by Hamas offi cial Mousa
Abu Marzook.
The church’s website puts Wright’s
thinking in context: “The vision statement
of Trinity United Church of Christ is based
upon the systematized liberation theology
that started in 1969 with the publication of
Dr. James Cone’s book, Black Power and
Black Theology.”
Black liberation theologians like Cone
explicitly state a preference for Marxism as
a way for the black church to understand the
problems and needs of its members. Marxism
argues that modern society is based on
class distinctions and that an oppressor class
creates economic and social structures that
suppress its victims. Black liberation theology
identifi es the oppressor with whites
and the victims as black. Here’s a clarifying
quote from Cone: “The Christian faith does
not possess in its nature the means for analyzing
the structure of capitalism. Marxism
as a tool of social analysis can disclose the
gap between appearance and reality, and
thereby help Christians to see how things
really are.”
But social analysis is not enough. The
mission of liberation theology is social
change.
A critic of liberation theology, the black
intellectual Anthony Bradley of the Acton
Institute for the Study of Religion and Liberty,
has written, “Black Liberation Theology,
originally intended to help the black community,
may have actually hurt many blacks
by promoting racial tension, victimology,
and Marxism which ultimately leads to more
oppression. As the failed ‘War on Poverty’
has exposed, the best way to keep the blacks
perpetually enslaved to government as
‘daddy’ is to preach victimology, Marxism,
and seduce blacks into thinking that upward
mobility is someone else’s responsibility in
a free society.”
Obama now says he disagrees with his
former pastor, did not hear his most infl ammatory
sermons, and is surprised by his
most recent remarks at the National Press
Club on April 28. Whatever the extent of
that disagreement, the record shows that in
2002, Obama’s last year on the board of the
Woods Fund, it made $6,000 in grants to
Trinity United Church of Christ.
A Tragedy in the Making
In The Promised Land (1995), his remarkable
study of the great black migration
to Chicago, writer Nicholas Lemann noted
the important roles urban renewal and the
interstate highway system played in reshaping
the physical landscape of the city. But he
wrote that it was the University of Chicago,
especially its school of sociology, that transformed
the expectations of Chicago’s citizens.
As an undergraduate sociology student
at the University, Saul Alinsky absorbed the
teachings of the “Chicago school” of sociology.
It taught that individual pathologies like
delinquency and crime are the result of “root
causes” solvable by progressive communitybased
social action.
Among the most debilitating notions conceived
by the activists and academics in the
University’s Hyde Park neighborhood was
the idea that poverty is a political condition.
The solution they proposed was “empowerment,”
the idea that political activism can
overcome poverty and bring about economic
betterment. Alinsky’s work in organizing
community activists to “empower” poor
people by protesting social conditions in their
neighborhoods was the consequence of this
theory. Lemann agreed that empowerment
was a wonderful-sounding idea. Too bad it
didn’t work. He writes:
“The history of the Woodlawn Organization
[an Alinsky protest project]
proved otherwise: no matter how well
organized, a community without employed
people cannot stabilize…Both
politically and in terms of reducing
crime or poverty, community action
was a failure.”
Lemann judges the 1960s War on Poverty
a failure, not least because it relied on
unelected community organizers and made
enemies of local elected offi cials. “It also
failed because its main tool, community
action, assumes a non-existent link between
political power and individual economic
improvement.”
This non-existent link seems to pervade
the policies and political outlook of Obama.
Instead of proposing self-sustaining local
programs to regenerate communities, Obama
embraced the empowerment phantom of
“community politics.” The idea that community
activists should mobilize neighborhoods
and direct programs funded by federal tax
dollars is implicit in his entire career.
Perhaps Obama came to believe that activist
politics and federal programs can solve
social problems because he saw how he was
able to use his own natural skills and evident
charisma to political advantage. After all,
when Obama says he is willing to negotiate
directly with rogue nations like North Korea
and Iran, it may be because he believes Kim
Jong-il and Mahmoud Ahmadinejad will
be as susceptible to his persuasive speech
and stage presence, his radiant smile, as the
American public has been. For a confi dent
man who has experienced an amazing political
career it’s not hard to imagine that you
can bring “unity” to the world as easily as
to the Democrats.
This misdirection of energies is characteristic
of Obama’s career to this point. It is a
tragic error that will doom his hopes should
he be elected president.
Elias Crim is a freelance writer in Chicago,
Illinois. Matthew Vadum is Editor of Foundation
Watch.
Capital

Who Done It?????

Unfortunately my predictions form 1993 have become history.

“The Coming Economic Disaster.” as I spoke of many months ago these horrible events have now come to pass. What is even more frightening than the reality of the predictions is how they came to pass.

My predictions anticipated over valuation of the stock market as a factor. Housing market over inflation, Mortgage industry corruption, SEC and mutual fund industry corruption,high debt ratio, low savings ratio and a general false sense of security in America as contributing factors.
All of those were indeed factors but the proverbial straw that broke the camels back was one that both escaped me as a major factor and surprised me by it’s devastating effect that most likely will be felt for years. The Barney Frank , Barak Obama factors.

When It began to come out it pulled all the misfitting puzzle pieces together.

As you likely know by now Barak H. Obama Attorney at law was far more than just a little involved in setting up the house of cards that has now come crashing down and leaves the nations economy on the edge of total colapse.

It seems that attorney Barak H. Obama and Barney Frank and Senator Christopher Dodd and others worked quite diligently together to craft a program to force Mortgage lenders to fund mortgages for people with no money down, bad credit or no credit and allow them to buy houses they could not afford.

Fanny & Freddy were more than happy to make trillions of dollars from this social experiment. Seems the heads of both of those organizations raked in millions and millions personally from this endeavor and retired with monstrous retirement packages to work in and oversee the presidential campaign of a young Attorney turned senator.

You guessed it! Senator Barak H. Obama D Ill.

Franklin Raines ripped off the American People with the help of his friends, Barak H. Obama, Barney Frank, Chris Dodd and friends. They conspired to craft this abomination of a social experiment all under the guise of helping poor people own homes. In reality this rip off of the entire American economy largely funded the presidential bid of Senator Obama.

Does this Piss anyone else off?

Our economy was raped, robbed and plundered by Barak H. Obama and friends for selfish power grabs and personal gain. Unfortunately those who will vote for this un convicted criminal and friends will probably ignore these facts or brush them off as somehow untrue or biased. They have hooked their wagon to a Man who has convinced them he will make all their dreams come true.

This wagon is broken and will run you and I off the cliff into the Abyss.

Now get out there and campaign against the criminal Barak H. Obama. Tell everyone, shout this truth from the roof tops, your financial future has never been more vulnerable and Obama will finish it off.

I am “Doug’s Money Matters” and I have approved this Message.

Doug’s Money Matters is a section of the VAJoe Blog to ask for quick financial tips and advice from an expert with more than 20 years experience in counseling families to live without debt and to reach there financial potential. Please leave comments on this Blog. You can learn more about the Money Matters advisor at his website. The posts and comments by JoeMoneyMatters reflect his two decades of financial counseling expereince. VAJoe.com does not endorse any financial strategies, but offers this blog as a service to its site members for discussion.

Look us up on the web http://www.dkirk.forwardfinancialgroup.com

Is this the end for America?

Sad and scary times.

I have been blogging now for several months under Joe Money Matters and Doug’s Money Matters here at VAJoe.

Since 1993, my partner and I have been predicting this cataclysmic event.
Is it finally time to pay the piper for all the years of ignoring the signs?

I have always been an optimist and even through this catastrophe we have continually expressed what you and I have to do to avert this disaster.

Now comes the time when push has evolved into shove as hard and as fast as you can.

“Bail the boat is sinking.”

Will the proposals from the President work? Will the congress allow them to be initiated? Will they come up with a better idea? Will any of these things work? Will our economy survive? Time will tell.We won’t have to wait too long to find out either.

700Billion dollars to bail out a mortgage industry and wall street in complete denial?

We simply stuck our collective heads in the sand so long that this 700 Billion dollar gamble is the last best hope. Apparently the Government and American people never heard “A stitch in time saves going naked and starving to death”.

Will it work? We will see very shortly! It will not take long for this house of cards we have built to collapse if this gamble does not work.

If the market responds positively today(Thursday9/25/08) tomorrow and wakes up Monday morning moving up or at least not falling, we have a chance that this thing will work. However if the market does not respond well to the news that this is a last chance to salvage our economy, we are in for a quick end to the this Democratic Republic we lovingly called the greatest Nation on the planet.

Patriotism and political freedom cannot stop this catastrophe from happening if the next 4 days don’t show some stability and promise. Even if it stabilizes for the next few days and even if it stabilizes for the next few weeks we are NOT out of danger.

It might after all our best efforts fail anyway because this bailout is a BAND AID! It does not fix the disease just may put it into temporary remission.

In my 60 years of life this Country and Its people have never faced such an impending disaster, including 9/11.

What should we do on a personal level?

If you don’t already have emergency supplies, get them. Non perishables, batteries, water etc. Even if I’m wrong you still can eat the food and drink the water. But if I’m right and you don’t have some provisions, God help you.

The final impact of the failure of this Band aid bailout is double digit inflation, the complete collapse of the stock market, massive runs on the banks, massive bank failures, food shortages, food lines, total collapse of the businesses and loss of all jobs, the Fed declaring a police state.

Our military roaming our streets as police.

My financial predictions have been correct since 1993.
I pray I’m wrong this time.

Next weeks blog should reveal how this thing is working out.

Until then, Peace.

Doug’s Money Matters is a section of the VAJoe Blog to ask for quick financial tips and advice from an expert with more than 20 years experience in counseling families to live without debt and to reach there financial potential. Please leave comments on this Blog. You can learn more about the Money Matters advisor at his website. The posts and comments by JoeMoneyMatters reflect his two decades of financial counseling expereince. VAJoe.com does not endorse any financial strategies, but offers this blog as a service to its site members for discussion.

http://dkirk@forwardfinancialgroup.com

Reflections of 9/11

Clear as a bell. I get up, eat a cerial breakfast, grab my fishing tackle and hed for the strem next to my house. Same thing I have done morning after morning for years. Daybreak, sky is clear and so is the water. Very still ,not even a ripple. The fish spook easily when the water is this clear and still. Fish for a while trying different techniques to get a bite, but no takers.

Boaring when there are no fish biting.

Head home, put up the tackle, walk in the house, Sue says Oh My God Doug someone just crashed a plane into one of the twin towers in New York City.

She is watching it on Fox News.

They show the pictures over and over. At first we and everyone else seems to think this is an awfull accident. and just as I am setteling down to watch another plane crashes into the other tower.

Horror is the only way to discribe the feelings. Unbelief, sudden awareness that this isn’t an accident: But what then if not an accident?

Intentionally crashing what now appears to have been airliners into the world trade center!

Oh God! The people in those floors must be dead. The fire now raging from several floors in each tower.How dear God can this be? This is New York City! How? Why would someone do this? Confusion, fear grip Both Sue and I as we watch the images over and over. I must not let Sue see my fear. Why, dear Gods Why! People now appear to be falling or jumping from the towers. Could they be jumping to a certain death to be spared burning to death? Horror! They report another plane inbound for Washington DC. Oh MY God! The White House or the Capital. Now the reports of other planes. WE ARE UNDER ATTACK!!! Oh God how can this be? Reports are poring in fast and confusing. How many planes? Where are they? Could they be coming here? to Our town? What should I do? Should I get the Guns out? No, they will not help from this kind of attack.

Who the Hell are these people? Chineese? Russians? TERRORISTS?
That is it! Terrorists! They hit the towers before.

More reports of more planes. Our son and His fiance come in from school. Wendy is crying. I’m fighting back tears and fear at the same time. My fight or flight response is going off the chart. How do I defend my family from this? Will they come here? Matt, Get the Guns, We will, defend ourselves if needed. Wendy now is near hysterical. Comfort the family, Fighting back tears myself.

The Pentagon is hit! Now terror becomes even more real as the attacks become more widespread. News of more planes one over Ohio. Oh MY God they are coming here!
We are away from Columbus, away from any strategic targets. OK, We will be OK!
People being pulled from the pentagon terrably burned, the Pentagon is being evacuated. People running everywhere not knowing where it is safe. Now word that there may be another plane headed tyo the Pentagon, The people are running now, near panic from the Building.

The tower is colapsing !The tower is colapsing! Oh MY Dear God!! Those people! How many escaped? People running everywhere coverd with dust. paper blowing everywhere.
OH MY GOD! Thousands of people in that building! How many got out? I cannot discribe my feelings. Everyone watching must be feeling them as well.

The second tower is colapsing! OH NO! Oh how? Why? What kind of people would intentionally attack a non military totally civilian building? The news reports say 50,000 people work in those buildings. As fear, confudsion, terror, sorrow wash over me and my family a new emotion is raising up in me. ANGER, RAGE, REVENGE. WE ARE AT WAR! The realization is overwhelming.

OK we can do this! We must avenge this atrosity! We will hunt these Bastards down to the ends of the earth! This will not stand unavenged!

My daughter in California calls, she just got up and saw it on TV. She is crying Sue and Wendy are Crying. Have never experianced such Rage, sorrow, fear, anger, all at once. Even in the War I didn’t feel all these things together a so strong. How do I controll my emotions and stear this family through the next days and weeks that are enevitable. Must be strong.

GOD HELP THE FAMILIES OF THE VICTOMS!

GOD GIVE US STRENGTH AND RESOLVE TO AVENGE THIS——————————-!

GOD BLESS AMERICA AT WAR!

What is up with Wallstreet?

Everyone knows the stock market has been abysmal since last September.
It looks like this will continue for quite some time. Oil market in turmoil, housing costs worldwide in a tail spin. Most economists say housing won’t start a serious recovery until September 2010. Food prices in orbit, all consumables skyrocketing, prices largely driven by high fuel costs, no end in sight.

With World Economic indicators just as grim, why should we expect any sudden longterm upturn in the stock market?

No matter who gets elected the economic woes we are experiencing are tied to the world economy and debt. No new administration will be able to make a significant impact on this for 2 years or more.

Wall Street is feeding us a load of BS. If you own Mutual funds (80% of Americans do through 401k’s 403b’s and IRA’s) you keep hearing “Don’t worry, it will come back.” “Now is the best time to buy, while the market is down.”
“Don’t think of it as a loss. It isn’t a loss unless you get out while it’s down.”

Sound familiar? Didn’t we hear this load of BS in 2000-2003? From late 1999 through 2007 we saw virtually no measurable gain for the average investor. The losses were finally recovered by late 2007. Now we are back in it again. 40% plus losses are common in the last year. If the economists are right, you will continue to suffer large losses for at least the next 2 years.

Who can afford 11 years of no gain or worse, large losses? How can I retire or provide for my children’s education if my investments don’t even come near inflation? Why are the Wall Street people still charging me fees when they continue to lose my money?

Have you ever wondered why they never seem to come up with answers?
They are making billions of dollars at our expense and making no effort to help us.

They (Mutual Fund Companies and dealers) will never be on your side. They only get paid to add more money to the coffers; not to manage the money that is in there.We have been deceived and we bought it hook, line and sinker.

When other options to earn a fair return without the risk and volatility if the market are introduced they tell lies and deceive us to keep us from doing something that well may be a much better option for us.

Fixed Index Annuities have been around for more than a decade but few have ever heard of them.

You remember your grandparents Annuities that were safe from loss but had very small fixed earnings? Not a good option if you need to grow your money more aggressively. Or how about the Variable Annuity that was nothing more than Mutual funds wrapped in an Annuity coupled with excessive fees and highly restrictive liquidation penalties. Those turned out not to be an answer either.

The creation of the Fixed Index Annuity has been a highly successful effort by annuity companies to address the shortcomings of Mutual Funds, stocks, bonds and fixed accounts.As well as addressing the restrictiveness of traditional Annuities.

Fixed Index Annuities enable you and I to invest in a vehicle that can produce market like earnings on the up side and eliminate loss on the downside. Many Fixed Index Annuities have features like protection against probate costs, the ability of the beneficiary to inherit it without creating an immediate taxable event. Many pay large incentive bonuses (up to 12.5%)as well as a guaranteed minimum earning while the market is down.

With all that going for it why are we not hearing more about them? Simple. The mutual fund industry has lost so much business in the last 5 years to Fixed Index Annuities (trillions of dollars) that they have made multiple attempts to block their availability or attempts to prevent investors from qualified rollovers or even making false claims about them to discourage the investor.

So what can we do? If you ask someone in the mutual fund industry they will not speak favorably, plus they make their living selling mutual funds and not Fixed Index Annuities.

Ask a qualified Annuity agent.

What ever product you use,there are now hundreds of them available. Protect what you have worked so hard to save and grow it with confidence and a real sense of peace.

Don’t wait! Can you afford to lose more? You can learn more at the website below.

Doug’s Money Matters is a section of the VAJoe Blog to ask for quick financial tips and advice from an expert with more than 20 years experience in counseling families to live without debt and to reach there financial potential. Please leave comments on this Blog. You can learn more about the Money Matters advisor at his website. The posts and comments by JoeMoneyMatters reflect his two decades of financial counseling experience. VAJoe.com does not endorse any financial strategies, but offers this blog as a service to its site members for discussion.

http://dkirk@forwardfinancialgroup.com

The Last Day

21 June 1968,

05:00, It’s already hot.Could hardly get my breath all night. Like sleeping in a Sauna.

Cpl. Pete Bosco an I are packing to go on a 2 -3 day sweep with Hotel Co. The deal is (According to G2) the NVA have a company to regiment size detachment hiding on a peninsula not far from Phu Bai. Believed to be factions of the remains of the post Tet force.

200 lbs c-4, blasting caps, det cord, fuse , fuse lighters. Ready to go.

We immediately distribute all but 1 satchel of c-4 for each of us to the grunts. ( A common practice to enable us to transport more than we can carry. They get to keep a stick for cooking in exchange for carrying 5 more pounds.)

07:00 , its already near 100 and humidity is 90%

Within a 1/2 mile we start finding weapons caches. ( Weapons buried in the sand) This peninsula is only about 7 miles long but our progress is slowed considerably by finding so many weapons caches. We have 3 Amtrak (Amphibious Tracked transport vehicles) 2 Tanks and all the supplies are in the Amtrak. We are of course on foot.

Noon, 105 degree and climbing.

We capture a couple of Gooks (Suspected NVA). The Kit Carson Scouts (NVA deserters, retrained as scouts) and The ARVNS (Soldiers of the Republic of South Viet Nam) begin to question them. The ARVN leader become very agitated with one prisoner and pulls out his knife and proceeds to cut open the prisoner’s abdomen from side to side and pull out his internal organs while he lives and screams. The other prisoner is taken away. Unbelievable cruelty by some of the Vietnamese to their counterparts.

15:00, 121 degrees.

More weapons caches. we transfer supplies all to one Amtrak and store undestroyed enemy ordinance in the 2nd track. The 3rd Track due to mechanical problems it is limping along empty.

We capture no more enemy although 2 brief small firefights resulted in 3 NVA killed.

We reach the end of the peninsula and find no enemy force. G2 says they have either left already or are behind us. We start back to Phu Bai with a track full of supplies, a broken but able to move track and a track full of enemy weapons and explosives.

The Amtrak’s plow through a small line of small trees. The first one through, the second one starts through when KABOOM! this immense vehicle flies up into the air and flips over landing on its top. Command detonated Mine I shout to the Skipper. The Grunts immediately begin to set up a defensive perimeter as we move towards the now inverted track.
I said to Pete, they are all dead (The crew of the Amtrak)from that blast. Just then the gunner ( Amtrak have a machine gun mount on top) starts to crawl out from under the track.

Amazingly somehow he has survived the blast but he is pinned underneath. Just as we are approaching to help him out the fuel cells rupture and burst into flames. The heat an flames prevent us form getting to the track and immediately consumed the gunner and he is burned alive while we could do nothing but watch.

18:00, 110 degrees Finally cooling off.

With one track destroyed, 3 dead and scattered small arms fire we dig in for the night. Finally the small arms fire stopped around dusk. Pete and I have just cooked up a meal of c-rats and coffee cooking on c-4 in the bottom of our foxhole we sit down to rest for a moment on the edge of our foxhole and drink our coffee when KABOOM!!! The world went silent and I felt myself being thrown through the air. (Enemy Mortar) I hit the ground flat on my back and laid there semiconscious for a long moment trying to decide if I was dead or alive. I could not feel or move anything on my left side and could not tell where my left arm was. I reached over with my right arm to my left side and did not feel an arm and where my shoulder was I felt a big hole. Oh my God! MY left arm is gone! I heard Pete groan and said “Pete, are you alive?” He groaned “Yes.” Then we both started calling out. “CORPSMAN!! CORPSMAN!!”

The Corpsman came over and looked at us both laying side by side a “They are both alive” He rolled me over and my left arm flopped out from under me. “It’s stilttached.” he said.

He began to look over us to see the visible extent of our wounds. I had the remains of my left kidney and some intestine hanging out of a gaping hole in my back just below the ribcage.
I had a hole in between my ribs about halfway up my back that had torn up my left lung.A large piece if schrapnell was sticking out of the small of my back between two vertebrae. Another piece about 2″ in diameter was sticking out of the back of my skull. There were shrapnel puncture wounds all over the back, left arm, left leg left side.

One Corpsman spoke in medical terms to the other about what they were discovering. I had been in combat for most of the 6 months I had been in country so I understood enough of what they were saying to know it was not looking too good.

They carried Pete and I into an Amtrak and called for medivac. The medevac chopper crew said they could not come in in the dark while we were under fire. We could not give them illumination to land without exposing our position. Just then an Air Force medevac chopper who was in the area answered the call for 2 priority one medevacs. He said he would attempt it if they could talk him down to the ground. He flew in without illumination at night and picked Pete and I up and had us in Phu Bai 1st medical battalion in 20 minuets.

When we arrived they took us both into emergency surgery. I was slipping in and out of consciousness and I remember the Doctors saying “His veins have collapsed, do a cut down in the groin.” While I was awake and unmedicated they took a knife and cut my artery open and fed a blood tube in, that is the last thing remember until the next day sometime.

That was to be the last day in combat in my very brief Marine Corps career.

When I awoke the next day I was in an Intensive care ward with Pete in the bed next to me.

He was alive and his wounds and mine were similar. Neither of us had lost any limbs but both of us were experiencing paralysis in parts of our body. Both had lung damage, Mine resulted in the removal of the left lung and left kidney. He had not lost any organs. We both were very happy to be alive

The Battalion Commander and staff came in later to award us our Purple Hearts and to tell us we were going home.

I spent a year in the hospital. a couple of month in Yakutska Naval Hospital in Japan, a couple of months in the Wright -Patterson Air force Hospital In Dayton Ohio. I got to go home for 2 weeks and spent the whole time in bed. the remainder of the year I spent in Philadelphia Naval Hospital until I was Medically retired, 17 June 1969.

I was married on 21 June 1969. The Happiest day of my life.

I am a combat wounded survivor.

And that is the rest of the story!