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Dec. 7, 2011 - Rush Limbaugh Program
32:45
December 7, 2011, Wednesday, Hour #3
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I don't know, it's the strangest thing.
I actually got eight hours of sleep last night.
I actually went to bed at eleven.
I haven't I haven't been in bed at eleven o'clock.
I can't tell you how many years.
And I I feel like I haven't slept at all.
I can't tell you how disappointing that is.
At any rate, I'm not complaining.
Nobody would care anyway.
Great to have you back.
Rush Limbaugh the Excellence and Broadcasting Network and the Limbaugh Institute for Advanced Conservative Studies.
It's great to have you with us in a phone number.
I just gave you that.
An email address.
Some during the break at the top of the actually the break before the top of the hour.
I had mentioned to uh caller that uh everybody working their own self-interest is how everybody helps everybody else out.
And and sure shooting, I go to the email and I blistering a tax from uh from you don't know what you're talking about.
That's an essence of you rich people.
You just you're so selfish.
Oh, you just care about yourself, and somehow you think that's gonna bring everybody else.
Oh, you don't know what you're talking about.
It's amazing to me how woefully inept our economics education has been in this country.
Let me define how that happens.
Let me explain to you how that happens.
Adam Smith wrote about this.
Adam Smith had a book called The Wealth of Nations.
And Adam Smith wrote, is published in 1776, by the way.
That year might remind some of you people of something.
1776, the wealth of nations, Adam Smith.
He wrote the following.
It is not from the benevolence of the butcher or the brewer or the baker that we expect our dinner, but from their regard to their own interest.
So When you go to the grocery store, let's say you go to meat counter and there's a guy behind the meat counter and you orders.
Do you think that the guy is there to help you?
Purely and simply.
I mean, in doing his job, yeah, you order something and he provides it for you, but what's he doing?
He's trying to feed his family.
He's looking out for himself.
He's selling you something, hoping you buy it because that helps him.
He's looking out for himself at the same time accommodating you.
So in just that one example, the butcher.
Looking out for himself.
He didn't he doesn't.
See, the left would have you, the left wants you to believe that the guy selling meat should sell it to you at no cost so that he doesn't profit from what he's selling.
Or the guy selling the TV set of the dishwasher.
Whatever, should sell it at no cost.
Because if the guy makes a profit on it, then you have been screwed.
And he's using you and taking advantage of you and ripping you off.
When the truth is, he's not giving you a dishwasher to be nice to you.
He's not selling you a TV set to be nice to you.
His job isn't to make sure you've got a television set.
His job is to make sure he's got one.
His job is to make sure his family has food.
Everybody benefits in the bargain.
I'm not saying the guy behind the counter is selfish.
What I'm saying is him looking out for himself benefits everybody he comes in contact with.
It's undeniable.
And there must be a profit in the route.
Otherwise, there's not gonna be a guy behind the counter.
There won't be any reason for him to be there.
How does he go home and feed his family if he sells you whatever it is you're buying at the same price it cost him?
But Mr. Limbaugh, it's inherently unfair that something should cost me more than it cost somebody else.
Well, then why don't you go down the street and try to find it at a cheaper price?
Maybe there's some other butcher selling your fillet mignon at a cheaper price.
Maybe he's trying to attract more customers with a cheaper price than your butcher.
And maybe this guy with a lower price is selling even more fillet mignon to more people, and more people are benefiting from the lower price.
It's still a prophet, Mr. Lumbo, and that's a thien, and it's unfair and it's outrageous.
And this is what we're up against, folks.
And these are the people, and that's the kind of thinking that Barack, our president is inspiring.
This new Castrati character of mine, those are real.
They're out there, they're on the Occupy Wall Street march, they're in America's classrooms.
Hell, some of them might even be your stupid kids.
Uh your kids.
Until you get hold of them and get them straightened out.
That's why there's a difference in selfishness and self-interest.
But everybody looking out for themselves, not in a selfish way, but in a self-interest way benefits everybody else.
The guy behind the counter selling a television set.
He's got to make sure there's a lot of them there to handle the demand.
He's got to make an investment in having a stock room full of the things that people might want.
He's got to take a risk in how many to buy and what kind, based on the best evidence he has of what people are going to want and what they're willing to pay.
This is so common sense, I can't believe I'm having to explain it.
But we have to every day.
Because the Mr. Castrates, the new Castrates are everywhere, and the education system is putting them out at geometric proportions or pumping them out, pumping out illiterate people, economically illiterate people, on purpose and by design by the millions, each and every year.
In the same book, The Wealth of Nations.
In the same book, Adam Smith also wrote that the butcher or any producer, quote, intends only his own gain.
And he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.
And by pursuing his own interest, he frequently promotes that of the society more effectively than when he intends to promote it.
In other words, the butcher may not have the slightest idea what's happening.
The butcher selling you a cut of beef may not have the slightest idea what he's actually doing.
But we are all part of an intricate web where we all prosper and benefit from the self-interest of others, not the self-ishness.
Now, the the wealth of nations was also an argument against government control.
England at the time had chartered monopolies back in 1776.
The king decided what companies would do what.
That's what Obama wants.
Obama, folks, this country was fought for independence from people like Barack Obama.
If you must know it, in straight between the eyes terms.
Barack Obama, if he gets where he wants to go, will become the equivalent of King George from which our ancestors fled, from whom our ancestors fled to found this country.
That's what we've done.
That's who we've elected.
We've elected a whole party of these people.
He doesn't act by himself either.
When Barack Obama acts in his own socialist self-interest, he's got a whole bunch of buddies in the bureaucracy in the Senate in the House.
In certain governorships who are doing the same rot gut.
They're trying to expand their power and their government.
And they can't produce, as I said in the first hour, if Barack Obama, Well, from the tie to the shoes to the suit to the airplane he flies to the food he eats, he doesn't produce one item of it, and he couldn't if his life depended on it.
And here he is attacking in his speech yesterday.
The system that produces it.
Self-interest is the invisible hand that Adam Smith writes about.
Self-interest is the invisible hits what is not seen.
But today self-interest has become greed.
Self-interest is said to be selfishness and greed and so forth.
And I'm going to tell you something, folks.
And again, if you're a moderate independent Democrat, you hate me, you're just tuning in out of curiosity, you haven't been here very long.
Hate me all you want, but I don't lie to you.
And I am here to tell you, the invisible hand, self-interest, everybody pursuing it, is how this society grows and prospers.
Now, everybody participates in it.
The greed and selfishness in this country is in the White House.
You'll find the greed and selfishness at all levels of government.
They'll think nothing about taxing you into poverty.
They will not do with one penny less from one year to the next.
Why do they get to say what you're worth?
Why do they get to say what you have to pay?
Why do they get to define what's fair and what isn't?
Who are they?
Why do you put such blind faith in incompetent people you've never met instead of yourself?
Why do you want to trust somebody who's not interested in your self-interest?
Why do you want to trust somebody and give your life over to people who don't care about you nearly as much as you ever will?
Is it easier than working?
Is it easier than facing the daily rigors of life?
For those of you who hate me, been told to hate me, we give you some reason to here.
For the fun of it.
I'll tell you another truth.
Self-interest, capitalism has fed more people than charity ever has.
Capitalism and self-interest has fed and clothed and driven, however, and whatever you want to describe, more people than charity ever has.
Are you putting down charity?
No, I'm not putting down charity.
I'm trying to educate you idiots.
I'm putting down what you believe in.
You know why there wasn't any meat in the goom store in the Soviet Union?
Because it didn't matter to the guy behind the counter.
There was no profit in providing meat or toilet paper or whatever.
They did it the way Obama wants to do it.
They did it the way Mr. New Castrati wants to do it.
No profit.
Whatever's there cost you whatever it costs whoever to put it there, except there was never very much there.
Because there was no incentive to have it there.
A quick time out, we'll be back.
We will continue with your phone calls, and we got some audio sound bites, Republican Party consultants dumping on me and others, if we get to all that right after this.
Don't go away.
All right, uh Lori, who can't say where she is.
Is that right?
She's uh worried about lawsuits.
So he can't say where she is.
Lori, welcome to the EIB network.
And um you're you're worried about lawsuits from what you're going to say here.
Well, it's possible, Rush, and by the way, it's an honor to speak to you.
Thank you.
Um, I worked as both a packager and an advertising executive for a mortgage brokerage firm.
I saw the rise and fall of the housing market, and what infuriates me about when Obama speaks or Barney Frank or anyone else who talks about these mortgage backed securities and everything that happened is that nobody knows the real truth about what goes on in the mortgage business and why it failed.
It's not just people going to the bank, getting along, paying the bank back.
Uh, you know, in the late 90s and early 2000s, when real estate prices were sharply on the rise, you know, anywhere between ninety nine and oh three, depending upon what part of the country you lived in.
Housing prices were on the rise dramatically.
Uh and there was a lot of pressure at Fanny and Freddie to give mortgages out the door.
We had a representative from FHA, HUD, Fanny, and Freddie, all of which visited this mortgage brokerage office.
And when Fanny began this idea of packaging these things as securities and grouping them together, you'll find that the number of mortgage brokers for residential mortgages in the country skyrocketed because they were suddenly getting what we call wholesale lines of credits from banks.
So mortgage company A or B goes to the bank and he gets a $15 million line of credit called the wholesale line.
He fills that line up with mortgages and then they're guaranteed they're bought off.
Fanny and Freddie buy them up immediately, repackage them or leave them whole and send them out to places like Lehman Brothers.
Wait, wait, wait, wait, hold on why would somebody like Lehman Brothers buy these things?
Well at the time no one knew that they were insolvent number one.
Why they were there was these were mortgages that were a lot of them I'm sure you're not talking explicitly here about subprime but a lot of these mortgages were made to people that weren't paying that there wasn't an income stream on these mortgages.
People talk about subprime I'll bet 95% of the mortgages that went out of our office were subprime even if they weren't rated that way because I'll tell you the pressure we got from somebody else.
We used to get visits by our credit representatives from the three major credit bureaus.
They were under a lot of pressure to develop a program to allow people to quote unquote fix their credits faster than loans.
Who was a source of this pressure Lori Well according to our the people from the Credit Managers Bureau, they were getting that pressure from Congress and FHA and Fanny and Freddy that they were doing enough to help people credit.
The government agencies were being unfair because they weren't doing enough to allow people who had had financial problems to fix their credit.
So here's what happened it went from yeah maybe it took a long time to fix your credit to what we call a rapid rescore process.
Our office could literally in one day take everybody's bad credit issues write a one line sentence about each one fax it over to the credit bureau that we were members of that we paid to be members of and boom within an hour they were dropped off and their credit was rescored.
Why?
Why would this dupe be done?
Why you tell me because people wanted people to qualify for mortgages especially the beginning of this problem was what they call non-income qual mortgages.
People who are self-employed getting out 1099 for W2s Wait what are we hearing non-income mortgages rapid rescore on this problem is if you had a business and you were a small business person and you didn't necessarily have a 1099 or W two or your books didn't show or you didn't want it to show that you had enough to pay for this loan all you had to do was walk in the door with this credit credit score of greater than seven hundred.
Okay and I can tell you that if you were anywhere up north of five eighty we could rapid rescore you into seven hundred within an hour.
And let me cut to the chase here.
So everything that's happened since all this fell apart is all these people that you had to deal with that were forcing all this credit readjustment, all this stuff being all the all the crime labs, all the churn, all the volume, all this was being everything being said now is by people that cover their rear-ins.
Yeah and and and then he you know these then what happened is I ended up going to work for a firm on the east coast that saw the beginning of the end here and tried to start buying small portions of these packages from people like Lehman Brothers because they knew they wouldn't get bailed out because they weren't Goldman Sachs.
I got a I got a break.
I got a break in five seconds don't lose your train of thought we'll come back to you after this obscene profit timeout which it does not consist of any mortgage company.
Michael Moore was reading the Washington Post the other day and he read that Obama has collected more campaign donations from Wall Street banks than all of the Republican candidates combined.
So now he's beside himself he was on CNN beside what is this Wall Street's got their guy and it's Obama?
Whoa whoa whoa whoa his world's been turned upside down I tried to tell you people on the left I tried to tell you Wall Street is liberal Democrat and its money is going to Obama.
And if any of you think that Wall Street is going to take any kind of a financial hit if Obama gets his weaponed speech yesterday, you have got a big wake up call coming.
Back not a Laurie who can't say where she is because she fears lawsuits.
She was in the mortgage business.
You know, I I checked some emails during the break here, Laurie, and uh you know what people are reacting to your call and it it's it's tough to pick one thing, but your description of the rapid rescoring of consumer credit has sent people through the roof.
It should.
Yeah, it should.
People's credit scores were just restored to seven hundred to perfect just to qualify them for mortgages.
Yeah and and it took literally less than fifteen minutes at the end of the day.
I mean if we could fax it over and have it faxed back and rapid rescore s now did that hold what if if six months later they applied for credit was that still there?
No, oftentimes it wasn't which means that's all it was that's all it was for.
That's all you couldn't rapid rescore for a couple of years.
Okay, so wait wait, wait, wait, wait, wait, you gotta let me in here for questions because this is this is blockbuster.
So the rapid rescore was a temporary rescore just to get people a mortgage but that credit rating didn't survive if they tried to use it for anything else.
It wouldn't survive the next update from the credit bureau for f w from whichever the major three if they're doing it quarterly, monthly the next time that update came along everything was back on, everything was like it was before I actually knew people who had friends that owned mortgage businesses and they would go in there to have them rescore them so that they could go get a car loan.
Uh right okay so um I'll tell you who's really ticked off about this hearing your call is all these people played by the rules.
They didn't buy anything they couldn't afford.
They uh and now you y what what you're basically saying is that people who were unqualified were qualified on a temporary basis to go buy whatever they wanted and then that paper, that mortgage it was packaged with a bunch of other mortgages and sent down the trail where they tried to find value in it somewhere else along the line.
Absolutely and the people that played by the rules that got hurt by that were just the beginning of the bargain.
I worked for a company then on the east coast that went to work and started to buy small packages of mortgages that had already started to go back.
The first package they bought was from Lehman brothers and because these people were very savvy investors and real estate prices were still on the rise, they would negotiate these people out of their homes they would give them what they could, they would take the homes back, they would sell them again to qualified buyers and for a very short period of time this was successful.
But if somebody wants to get uh spend some time and Google this at least four different states prosecutors in at least four different states sued three of these groups doing this under RICO statutes.
I I got scooped up in that.
That's why I'm worried.
I had to testify at three of those trials because they somebody at the end of the day came back and said well they they negotiated me out of my house and I should have gotten more because real estate prices were still on the rise.
What does that mean they negotiated me out of my house?
Well these these groups would buy these mortgages that were already late from from companies that had bought mortgage backed securities that had started to get the idea that these things were going to go bad.
Because here's the problem the vast majority of especially the non-income qualifying loans that were given out during this period of time and a huge majority of just regular loans were called arms.
They were adjustable rate mortgages and ninety five percent of them I would bet you were two and three year arms given between oh four and oh five.
So at the so at the end of 06 these two year arms had started to to circulate they had to come do they had to refinance their house and they had to now not only pay two and a half percent interest they had to pay a a a reasonable interest rate plus you know just a regular amortization schedule.
They had to be paying principal down every month.
These payments in some instances were four and five times the ri the original payment if they were paying a thousand dollars a month now their payment was four or five thousand that's when this all started to go bad it's when the companies that had bought mortgage backed securities tried to find a way out.
Right.
There were investors that moved in to try and help them do that and as these people became started falling behind in their loans these people would try to negotiate with them to take whatever the value of the house was with prices still on the rise because no one realized the amount of poison that had been injected into the state I don't believe nobody knew the amount of poison.
No I think somebody did but the the public didn't.
The people who were falling behind on their mortgages didn't and I and I have to say too Fanny and Freddie spread this stuff out so far and so wide that you would have had to really have been in on the ground floor of this to realize how much how many millions, billions, trillions, whatever it was in dollars of e securities were floating around in the open market.
And I bet that if there's any FOIA left in this country someone could find out that many, many, many of these packages went out and if those loans were rapid rescored, they were in one package.
And if they were actual qualified mortgages, they were in another package.
If you were on the witness stand, somebody asked you to um point a finger at one place if people wanted to understand where did who who is responsible for this?
Could you do it?
Uh I probably couldn't name a name but I can tell you that it was Fanny and Freddie because every mortgage uh seminar that we went to remember this that little Fanny Freddie junket they just had in Chicago that people were upset about the six hundred thousand dollars they spent those are relatively common in the mortgage business.
We used to go to them once or twice a year and Fanny and Freddie were there and they had they might have as well have set up a carnival booth.
I mean they were so excited about the fact that that if you were a new mortgage business and you could get a wholesale line of credit, you could rapid rescore and qualify five hundred thousand people in a year and they would back and buy everything you could send them.
It was on this basis that all the executives there were paying themselves these bonuses, right?
Yeah but because they because that's exactly what was happening.
The number of mortgage brokers in this country I would I would bet you doubled or maybe even tripled between ninety eight and two thousand four.
I know that the office I originally worked for, the owner and two other brokers were the only brokers in the field.
By the time Rapid Rescore really got going, he had 20 brokers in the field, and he sat in the office and did nothing but pull in wholesale lines of credit.
And these wholesale lines of credit oftentimes, well, one of the big banks that was doing wholesale lines was WAMU, and they're no more.
Yeah, WAMU, and they are no more.
And a lot of others are no more either, and Lehman is no more.
You know, Lori, I have some questions about the cases that you're testifying, and I know you can't tell me, I know you don't want me to.
So, could we get your number and stay in touch with you down the line, months or so?
stall whenever this shakes out and query you further about it when it's safe for you.
Sure.
Okay good.
Don't hang up.
Snerdly will get your name.
Uh by the way, would you like an iPad I have one but thank you very much you can make me just as happy by by just continuing to do what you're doing.
Well I appreciate that more than you know I really appreciate that hang on and we'll we'll get a number and find a way to uh stay in touch with you but but only when you countrywide's no more either by the way friends of Angelo whenever you it's safe for us to talk to you for you to tell us more about it.
No while Colby is not gone as well as Fargo now.
At any rate we'll stay in touch and I appreciate your doing that she's got to testify in three cases.
And I would love to ask her about the cases of I I'm I'm not gonna put her in that position.
We'll find out from her later.
Thanks Lori very much we'll be back and roll right on right after this.
Uh one more thing Lori when she was talking to Mr Snerdley communicating ways we can stay in touch with her she said one more thing that she wanted me to pass on to you and that is that everybody involved in this Fanny and Freddie all these various mortgage makers all the government entities involved here knew when this thing was going to blow up.
They knew when judgment day was coming they knew when the what's the phrase the jig was up they they knew when the paper was coming due.
They knew when all this was going to blow up.
They knew it was going to blow up in two thousand eight.
They knew, therefore, that they could blame all this on George Bush.
They could blame all of this on the party of the president serving in the White House.
Which is what happened and which is what continues to happen to this day.
Now to translate what Laurie said, what actually to synthesize is, it's very difficult to do this because it simplifies it more than it should be.
The housing meltdown, real problem with it was, based on this is my uh opinion after listening to her.
Everybody from the mortgage brokers to Fanny and Freddie and the executives there, anybody involved, they were all turned into commission salespeople, is what happened.
They got money for every mortgage they processed.
It didn't matter whether it was a good mortgage or a bad mortgage, they got a commission on it.
And when the government leaned on them to loan to the poor, they were more than happy to do so because they had all been converted into commission salespeople who could also qualify anybody for a mortgage with this temporary rapid rescore.
So it was the industry, Fannie and Freddie and the mortgage brokers make it taking care of themselves.
Did you hear her say that Fanny and Freddie were like a carnival?
They set up booths explaining rapid rescoring of credit rate right out in the open at seminars.
Which means they were granted permission to temporarily qualify anybody who wanted a mortgage.
The people who gave us the mortgage meltdown are all wealthy people.
They are all wealthy people, and they knew that it was all coming due in 2008.
Ergo tarp, Ergo, all the other stuff, all the financial panic that you heard about, it was all related to this, and how fortuitous that it comes to fruition that it blows up right in the middle of the 2008 campaign.
Blame it on Bush.
And they were, I'm, I'm sure, entirely comfortable doing that because Bush had shown he wasn't going to defend himself against any of this.
All they had to do was go tell Bush, hey, look, we got a we've got a collapse of epic proportions coming unless we do some.
Oh yeah, can't have that.
They told Bush that the blame would be on him if the collapse happened.
So yes, I knew that Paulson was Chuck Schumer's guy.
I questioned Paulson's choice by Bush the moment it happened.
I I that wasn't the first choice.
I was scratching my head over.
Yeah, I knew Paulson was Schumer's guy.
Wall Street is owned by the Democrat Party, folks.
This notion that Wall Street and big business is a bunch of Republicans, who the hell sits on Obama's jobs commission?
Jeff Immelt, CEO General Electric.
Republican?
Really.
I get I guess so.
She didn't mention, if you listen to her whole call, Laurie did not say the words Wall Street one time.
And yet who's out there blaming Wall Street for Obama?
And the people on Wall Street are winking all the way to the bank, giving him money for his re-election campaign.
What a day we have had here.
President of the United States gives a speech in Osawatomi, Kansas yesterday, in which he is finally forthcoming, tells us exactly who he is.
Tells us that this country has never worked since the days of its founding.
This country has been immoral, unjust, And unfair since the days of its founding.
And he's out to change it.
I've tried to tell people from the get-go when I said I hope he fails, that this is what we were dealing with.
And now to give a speech like yesterday, which is a campaign speech running for re-election on the premise that this country has never worked.
And it'll only work if Obama gets to totally transform it.
And then we hear what really happened in the mortgage fiasco.
And we learn that people we think looking out for us are just scamming us.
Instinctively, you probably suspect it, know it, whatever, but what's it feel like to actually hear it firsthand?
Temporary credit scores.
Rapid rescore, temporary credit scores for 30-year mortgages.
All right, folks, that's it.
We gotta go.
But there's always tomorrow.
Tomorrow's Thursday, right?
Yeah.
Days are zipping by here.
We'll see you then.
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