Obama: "I Didn't Run to Help Wall Street." Yet in his last days in office that's exactly what he did (and they re-paid the favor)

President Obama, early in his first term on December 13, 2009 famously said in an interview with CBS that "I Did Not Run for Office to Be Helping Out a Bunch of Fat Cat Bankers on Wall Street." Yet, as one of his last official acts as President that is exactly what he did by allowing federal loan guarantees of junk derivatives based on securitized mortgage backed rental properties. Now he’s in the news again for a receiving $400,000 to give a speech to Wall Street bank!

Here's the video from 2009:

[video:https://www.youtube.com/watch?v=q-z9jeCi3Bw]

And here is the going away present he gave to Wall Street firms, such as the multi-billion dollar private-equity firm, Blackstone, who sold derivatives to investors in distressed mortgaged backed rental properties:

Invitation Homes, the 2012 buy-to-rent creature of private-equity firm Blackstone, and now owner of 48,431 single-family homes, thus the largest landlord of single-family homes in the US, accomplished another feat: it obtained government guarantees for $1 billion in rental-home mortgage backed securities.

The disclosure came in an amended S-11 filing with the SEC on Monday in preparation for Invitation Homes’ IPO. Invitation Homes bought these properties out of foreclosure and turned them into rental properties, concentrated in 12 urban areas. The IPO filing lists $9.7 billion in single-family properties and $7.7 billion in debt. [...]

This is the first time ever that a government-sponsored enterprise has guaranteed single-family rental-home mortgage-backed securities, issued by a huge corporate landlord. It’s an essential step forward in financializing rents: taxpayer backing for funding the biggest landlords.

Government guarantees allow the mega-landlord to sell these securities at a lower yield and thus offer landlords like Blackstone’s entity even cheaper financing for future home purchases, and thus lower costs and greater profit potential.

Meanwhile, how bad are these giant, investment firms as landlords? Pretty bad:

Hedge funds, large investment firms and private equity companies helped the U.S. housing market recover after the crash in 2008 by turning empty foreclosures from Atlanta to Las Vegas into occupied rentals. [...]

Now among America’s biggest landlords, some of these companies are leaving tenants like Allen in the cold. In a business long dominated by mom-and-pop landlords, large-scale investors are shifting collections conversations from front stoops to call centers and courtrooms as they try to maximize profits.

The name of of the study by the Federal Reserve in Atalanta that determined these Wall Street firms were responsible for increasing "housing instability there? "Corporate Landlords,
Institutional Investors, and Displacement: Eviction Rates in Single-Family Rentals."
And, as the study determined, it was The Fed under Bernanke that promoted Wall Street to invest in these properties creating another fine mess in our housing and rental markets for the Federal Government to clean-up:

The Federal Reserve was the first to suggest that private equity firms were the one group with cash on hand to invest in foreclosed homes (Bernanke, 2012).

In 2012, the Federal Housing Finance Agency (FHFA), conservator of the GSEs, issued a pilot to develop structured transactions that could be used to sell its REO homes in bulk. The private market followed by developing and standardizing financial instruments to allow broader market investment in converting foreclosed homes into single-family rentals. Rental housing, traditionally the purview of mom-and-pop landlords, caught the attention of large financial firms.

Nationwide, an estimated 350,000 homes were purchased by institutional investors from 2011 to 2013, and these were spatially concentrated in cities like Atlanta with high numbers of bank-owned homes and the prospect of future home price appreciation. Today there is high concentration in the single-family rental business, with an estimated 170,000 single-family rental homes owned by the seven largest firms.

Here's how this works. Major Wall Street firms bought up distressed properties using cheap money they obtained from (who else) the Federal Reserve, turned them into rental properties, and the securitized the income flow from the rents. That rental income they then sold to institutional investors in the form of mortgaed backed securities (sound familiar?), creating a whole new housing boom in the process, helped raise rents, and made it much harder for lower and middle class folks to afford a home, or in many cases to rent one.

And now that these derivatives (AAA rated, of course) are not doing so well, here comes Blackstone, a "pioneer in the post-Financial Crisis buy-to-rent scheme, including issuing the first rent-backed structured securities in November 2013," getting the outgoing Obama administration to sign off on guaranteeing a new initial public offering (IPO) of their latest rental based derivatives.

By the way, Blackstone's contributions to Democratic candidates since 2008 were a mere $6,679,231, according to Open Secrets.org ( site maintained by the Center for Responsive Politics). Blackstone got a nice return on it's investment in Democrats out of this one deal alone! Thanks, Obama!

And based upon former President Obama's initial paid speech from a Wall Street investment bank, Cantor Fitzgerald, it seems they aren't the only ones who might have reason to be pleased by how well their industry profited under the Obama administration's tender loving care.

Maybe he didn't run to help Wall Street Fat Cats, but boy oh boy did they ever do well once Obama was in office. This is his legacy, and the legacy of the Democratic establishment. And you wonder 67% of Americans believe the Democrats are out of touch with their concerns, a rate higher than either the Republican Party or even The Donald.

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Amanda Matthews's picture

OUR prez. He was Wall Street's biggest knee pad wearing promoter and protecter.

We found out years ago what he thinks of everyone in the Middle Class down. He thinks and feels about us like I think and feel about him.

But I didn't start off that way. He did.

EDIT: promote/promoter

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I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks

Politics is the entertainment branch of industry. - Frank Zappa

Alligator Ed's picture

Due to the stationary or actually declining incomes of the 99%, there is a shortage of buyers who would actually qualify for a home loan. The banks and billionaires have sucked up every drop of cash they get their hands on, making home ownership the impossible dream. So rents are high due to inability to purchase homes by private citizens. Perhaps this will get to the point where people will have to take out mortgages to pay their rents--but what then will they use for collateral; perhaps their first-born. The child trafficking market is apparently a growth industry.

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I hate, hate, hate the guy. Lying weasel has no shame. When Dean recruited young voters, I thought it was just and smart. When Obama did it, I felt like I needed a shower. His legacy in my book is slick, slimy and underhanded. If there is karma, I hope it bites him in the ass big time.

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"Religion is what keeps the poor from murdering the rich."--Napoleon

@dkmich @dkmich

it just gets worse with Mr. Obama.

the word "snake" comes to mind.

I voted for him and hate myself for doing it.

but I love him even less than that.

(Check Hef on clip! Might be Barbi Benton with him.)

Edit-please give peter green & boys a listen! oh my goodness. great band.

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Wink's picture

Street... "

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the little things you can do are more valuable than the giant things you can't! - @thanatokephaloides. On Twitter @wink1radio. (-2.1) All about building progressive media.

@Wink

well now,that's just good manners."

aarrghh.

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One of the main contributors on Naked Capitalism is Lambert Strether. I think he has a background in rhetoric. Here is his rhetorical analysis of a 2006 speech by Obama.

This is the kickoff of The Hamilton Project. Bob Rubin was one of the founders. Obama was recently elected to office and he was the only US Senator at the kickoff event. Hamilton Project is a neo liberal effort and Bob Rubin was a co founder. BO thanked Bob for educating him in economics.

It is a short speech. "Transition will not be bloodless" -- beat the shit out of people

There is a video and a rhetorical analysis, color coded of the speech.

How was Obama SELECTED ? He won elections, but he was SELECTED

Obama at the Hamilton Project, 2006: “This is not a bloodless process.”

There’s been a sort of contest among the skeptics and hippies for the “Who Called Their Shot on Obama First” title, which I believe Adolph Reed holds (Village Voice, 1996), with Bruce Dixon (2007) also holding an honored place; both writers knew Obama in Chicago, which helped. However, along with Ken Silverstein from Harpers, left blogger A Tiny Revolution called his shot in 2006 (hat tip, Gaius Publius (hat tip jawbone)), based on Obama’s appearance at the first meeting of Bob Rubin’s The Hamilton Project, where he was the only Senator to appear. Here’s the video:

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snoopydawg's picture

To protect the war criminals
To protect the bank criminals
To protect the defense companies
To protect the insurance companies
To protect the pharmaceutical companies
To protect the NSA and the over 800 companies that are illegally spying on us
To protect the intelligence agencies that went up to 17
To protect every other industry that had committed fraud such as the for profit colleges
To protect the wealthy and oversee the greatest increase of income inequality since 1928
To shut down the anti war movement who were upset with the Bush administration for starting the war on terror and then expanding it to 10 countries and gawd knows how many countries that we don't know about
He left Trump with unimaginable power to do so many unconstitutional things in this country and actions that go against international laws in other countries.

While he was in office, the democrats lost both houses of congress and many state governorships and keeping the person who was in charge of that in her position
The republicans should have gone decades before winning back control of congress, but in just one election cycle they had won back the House.

IMO, Obama watching as more than 4 million families lose their homes while the banks continued to commit fraud is the worst thing he did. During the bank's bailouts he could have passed a stipulation requiring them to modify people's loans so that they could continue to own their homes.
The federal reserve gave the banks over $16 trillion in quantitative easing and the banks continued to commit fraud every chance they could.

He left office with an 80% approval rating and people are saying that they wish that he was still president even though the economy has only recovered for the wealthy and the middle class continues to lose ground and the poor aren't even talked about.

Now seeing him back from his 3 months vacation with his billionaire friends one of the first thing he is going to do is give a $400,000 speech to the people who financed his campaigns and he protected.

Thanks Barack the feeling is mutual
IMG_0953_0.JPG

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Which AIPAC/MIC/pharma/bank bought politician are you going to vote for? Don’t be surprised when nothing changes.

But Wall Street won more than anyone during the Obama administration.

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Thank you Steven D, video posted on reddit WayoftheBern this morning, don't know how I missed it last November, coulda used it then too. Hope others enjoy the rant relief like I did. Peace

Fuck I can't believe I said those very same words, insidious brainwashing. Meh. What a soulless dick he turned out to be. Sorry I fell for it the first time. Fool me once... duh.

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Steven D's picture

@eyo good rants.

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"You can't just leave those who created the problem in charge of the solution."---Tyree Scott

Amanda Matthews's picture

It's what got me booted off TOP during the healthcare coverage hearings. That pretty much set the tone of his rule for me. I say rule because that's pretty much what he did IMO.

When he came into office we desperately needed a jobs program. We ended up with a 'jobs recovery' based on jobs flipping burgers and/or making beds. There is nothing wrong with flipping burgers or making beds but no single person can live on those wages let alone a family. But even those jobs are disappearing as the fast food industry automates, so now what? (Outsourcing jobs to everywhere but here along with all the tech industry's H1b visa workers taking so many good paying jobs "Americans can't do" continues at a brisk pace even as American workers were/are losing their jobs, their homes , their futures. I never understood that. But I digress... )

Instead of a program to get Americans back to work we got lip service and intentionally 'faulty' healthcare coverage legislation that was doomed out of the starting gate. Personally I thought money going toward the repair of our crumbling infrastructure was a great idea. It would have put Americans to work AND it would have taken care of the ever-worsening problem of the poor condition of our roads, bridges, dams, power plants, etc. That is what we needed but no, we couldn't have that. It would have helped the WRONG people. It would have helped US.

Obama's 'legacy' healthcare coverage boondoggle could have waited. Or maybe Obama could have tried the legislative equivalent of walking and chewing gum, but we'll never know since he didn't even try. His giveaway to Big Pharma and the healthcare insurance industry was all he cared about. He had favours to repay. Those donations ALWAYS come with attached strings.

Nothing that fraud can do would surprise me. He started selling us out on Day 1 of his first term and like Slick Willie, it continued as he sleazed his way out the door.

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I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks

Politics is the entertainment branch of industry. - Frank Zappa

Phoebe Loosinhouse's picture

@Amanda Matthews
was when I discovered that the public option had been killed off very early on in the "reform" process in negotiations between the hospital industry and the White House, something the White House kept to itself while allowing multiple House Committees to continue to design one. They counted on the Senate Finance Committee and various selected individual villains to be the ones credited with the public kill of the PO, most notably Blanche Lincoln and Joe Lieberman. But they were strangling a dead corpse! There was no public option to kill off!

Now think about the extent of the perfidy and duplicity required to maintain the fiction that those Big Bad Blue Dogs had killed off the PO when it was actually done previously internally within the White House. Remember Obama being all grumpy about why people were so obsessed about the public option? Remember Schumer trying to design one in name only that couldn't actually function as a competitive tool against the for-profit industry?

When I found out what had actually occurred, I was literally shocked to my core at the levels of deceit deployed against the American public. And that was the day I lost pretty much all respect for President Obama, the Democrats and the media and realized how our entire political system is for the most part simply a charade and artifice carried out on a regular basis to trick the public into believing they have some kind of actual input into the process.

Then the disgust got multiplied over the conscious inactions of the Justice Department when millions of Americans lost their homes through the so-called mortgage and foreclosures meltdowns where the connected made money in both directions, collecting on both the upsides and the downsides. Then came the police militarization against Occupy and then came Black Lives Matter.

The Obama administration worked long and ferociously on behalf of the 1% to the detriment to the rest of us. I hope Obama enjoys his retirement and all his speaking fees and hobnobbing with billionaires on secluded islands. He earned every dime. But I hope he also realizes that a very large percentage of the public is well aware of what happened and who was involved in the demise of the health and welfare of the American public. His legacy is not a fraction of what he might think it is. The scandal of the Obama administration is that it is commonly thought of as scandal free administration.

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" “Human kindness has never weakened the stamina or softened the fiber of a free people. A nation does not have to be cruel to be tough.” FDR "

Amanda Matthews's picture

@Phoebe Loosinhouse
Max Baucus' healthcare meetings and hauled to jail FOREVER changed my mind about the Dim-o- critic party and reinforced my knowledge that Obama was a fraud.

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I'm tired of this back-slapping "Isn't humanity neat?" bullshit. We're a virus with shoes, okay? That's all we are. - Bill Hicks

Politics is the entertainment branch of industry. - Frank Zappa