Financial fraud in the mortgage market 4.

Catherine Austin Fitts talks about it in 2004.
One might well ask what Robert Rubin as Treasury Secretary saw in AMS Technology and its founder and chief executive officer Charles Rossotti who were brought into HUD (at about the time that Hamilton was being taken down) to replace HUD's computer software and systems. Against all auditing standards they replaced them with no parallel runs. The unsurprising result was that within two years HUD had nearly $60 billion in "undocumentable transactions." Undocumentable transactions?! Where is the money? HUD cannot (or will not) tell you, and indeed, it cannot tell its GAO auditors either, which is why it did not and does not pass audits, in much the same style of Bill Cohen's and Donald Rumsfeld's Defense Department, which amassed over $2.5 trillion in "undocumentable transactions" before they stopped telling people what the amount is.

The upshot of this is the spectacle of HUD firing a contractor (Hamilton and Fitts) that saved them over $2 billion and rewarding a contractor (AMS and Rossotti) that has lost them at least $60 billion. Indeed, Rossotti's work was apparently held in such high regard that he was made Commissioner of the Internal Revenue Service in Rubin's Treasury, from which vantage point he managed to secure a Treasury contract for AMS.

http://www.financialsense.com/Experts/2004/AustinFitts.html
http://www.scoop.co.nz/stories/HL0310/S00223.htm

Category:

News & Politics

Tags:

• Fannie
• Mae
• Freddie
• Mac
• HUD
• Barnenke
• Paulson
• Bush

[58robbo]

the problem is that if i loan money to my neighbor i do not have a federal guarantee. the credit card company however has got a federal guarantee. how do you get around this?

[madashelldude]

58robbo no, that's a very small problem compared with what we have today. The federal government bailing out thieves, no strings attached is the real problem here because it introduces in the marketplace what's called a moral hazard. that means the government behaves as if Wall Street thievery will always be rewarded at the expense of Main Street. Credit cards compared to this are small potatoes because this goes to the heart of what's defined as capitalism.

[58robbo]

@madashelldude exactly my point. you cannot compete against the big banks because they are underwritten by the taxpayer

[madashelldude]

@58robbo I understand the sentiment, but there is a small detail here you seem to be missing. Bank underwriting has been going on since 1935 and it's a good thing. Bailouts with no strings attached is a new thing and it's going to be devastating. No worker competing for investors money can compete against free money speculators can just make up now with no downside risk. Even if you are BiIll Gates just starting up, you can't compete against free money and you'll always have a downside risk.

[madashelldude]

@58robbo what constitues "free monay " here is 0% interest FED rates. Obama is continuing the devastating Bush monetary policy and inflating another bubble: that's why we have no jobs. Why invest in main street when the FED is showering all this free money on investment banks and hedgefunds and if the shit hits the fan bails them out at the expense of the losers who did the right thing trying to create jobs on Main Street.

[AceOfHeart2012]

Government + Banking = Organized Crime

Any questions?

[madashelldude]

@AceOfHeart2012 google: "13 bankers" best book EVER!

[AceOfHeart2012]

@madashelldude Will do. Thanks.

[Huffmanr9000]

my new hero