Jeb Bush and the Subprime Mortgage Crisis

The Huckster and the Wreckage


It was a classic run on the bank. Until his recent resignation under fire, Coleman Stipanovich, a Bush loyalist, headed the Florida State Board of Administration, responsible for investing billions of dollars of state funds. Stipanovich’s brother, “Mac”, is a former chief of staff in the governor’s office, Jeb Bush campaign manager, and now partner in the law firm, Fowler White, Boggs-the Tallahassee lobbying whip of the Growth Machine (he is also board member of US Sugar).

Jeb Bush left Tallahassee for Miami in January 2007, having served two terms as governor. He incorporated Jeb Bush & Co., and in June was hired as a consultant with Lehman Brothers, the Wall Street investment banking firm.

In July and August, Stipanovich approved the purchase of $842 million in securitized mortgage bonds from Lehman.

Today the value of those bonds is practically zero, vanished in the debt crisis that is tipping the national economy into a recession.

So far, the media is buying the state spin: that Florida’s municipalities made their own decisions to invest with the state government investment pool. Senate President Ken Pruitt, another Bush loyalist, huffily defended the state investment pool with Indian River county officials, “No one put a gun to your head.”

But that is only half of the story, as any investor knows: the other half is that the state was fiduciary and obligated to invest those funds within tolerable risk parameters.

Any fiduciary that bothered with due diligence could see in the overdevelopment of Florida that the bubble in housing markets would pop, and that financial instruments that created the bubble would vanish into the ether.

The mortgage derivatives were only as good as their ratings, and their ratings and insurance were administered through incestuous relationships with originators on Wall Street, like Lehman.

The suburban housing bubble was a function-not of market demand-but of insider politics and campaign contributions that persuaded everyone involved to “mis-price risk” (risk to families, risk to wetlands, risk to government infrastructure budgets) leading to the theft of quality of life, the environment, and an equitable future.


We democrats and some independents aren’t buying anything fom you today.


We aren’t going to feed the monster anymore. We are going into a new year with a new plan. STOP BUYING STUFF. We have what we need. And, if there is some non-essential that we need, we will support the Good Will and Salvation Army, or local hospital thrift. We will get lucky and find a oversized Tye Dye Frog for $1.00. We will be at peace.

We have enough video games, movies, CD’s. We have enough clothes. We really don’t need another new car. We don’t need any vintage linens. We don’t need a new set of golf clubs. No new computer. We don’t need 698 football channels. We don’t need another lovely candle with stones on a plate. We don’t need a whiter pair of sneakers. We defin don’t need Nike. We don’t need to spend $500 on Valentines Day. W can make Valentines Day an example, and express LOVE OF COUNTRY as a couple instead. If that doesn’t set well with your wife- don’t worry. She’ll get over it soon enough. Put your money is a little jar, or give it away. It’s illegal to burn it, so I won’t advocate that. 

Today, Democrats, Independents, and smart republicans are taking back their power. We are not spending needlessly. We are joining together to make REAL change. We know it will take awhile. But, we are the brave and the strong. Eventually- we win. We win through tough perseverence. No matter how very badly we want that silk scarf with the little Buddhas on it, we will say NO !!!! You will not own me little buddhas !!!! I am free of scarves !!!

Each day that passes, it gets easier. The sale catalogues no longer tickle our dark places. We can fight off our Shopping Whore. We see how sadly gross it is to have been so needy of the next emotional fix for all that ails us. We realize what has gone on here, and our responsibility in it. We stop drinking Coke and all there other products. We don’t do Disney anymore. We have seen enough.  We are waking and we are taking our souls back. We like the local water park and it’s nice and close to home so we aren’t guzzling gasoline.

We are not going to align with Greed and Hate any longer by supporting it with our money. We aren’t spending our money in the stock market on companies who do harm. We know our 401Ks and if they aren’t in line with a better world – no thanks. We are TAKING PERSONAL RESPONSIBILITY. We aren’t going to blame you anymore for our plight.

We are detaching. We are paying off all of our credit cards instead of buying new stuff. We are getting out of debt now. We know it’s going to get uglier as more and more people catch on, over time, and companies begin to lay us off. We are prepared for this battle. We know this is the only way out. MONEY.



Young Adults Are Getting Hit with Enormous Overdraft Fees


By Leslie Parrish and Ginna Green, AlterNet
Posted on November 6, 2007, Printed on November 8, 2007

Few Americans are immune to the offers of quick, cheap and easy credit that surround us these days. Indeed, when brand-new adults first arrive on their college campuses, they are often greeted by a bank or credit card company before their resident advisor.

The consumer finance industry-including banks, credit unions and credit card companies-is never short of ways to lure in the American consumer, and a recent analysis performed by my organization, the Center for Responsible Lending, illustrates precisely how banks and credit unions are socking it to young adults — to the tune of nearly $1 billion a year.

More and more consumers — particularly young adults — are finding the deck stacked against them when it comes to battling abusive overdraft fees. Banks and credit unions now routinely allow most debit card transactions to go through when their account holders have a negative balance. Instead of declining the transaction, institutions will advance the funds to cover the shortfall (often less than $20) and charge the account holder an average fee of $34 for each overdraft. Consumers are not given an adequate chance to prevent these fees, which are largely out of proportion to the loans themselves. In fact, adults in general pay about $2 for every dollar the bank advances to cover debit card overdrafts, while young adults pay $3.25 for every dollar loaned to them, due in large part to their frequent use of debit cards for low dollar transactions.

In July, we found that banks and credit unions’ abusive overdraft lending practices cost American consumers $17.5 billion in fees for abusive overdraft loans. Our latest analysis, released last month, found that nearly $1 billion of that amount came at the expense of our nation’s college students and young adults aged 18-24.

And our nation’s young people-dubbed “Generation Plastic” because of their reliance on debit and credit cards-are particularly vulnerable to new banking practices that make it easier for even the most scrupulous account holder to avoid abusive overdraft fees [you mean make it harder for scrupulous account holders to avoidd overdraft fees?]. The rapid growth in overdraft fees levied by banks and credit unions-$17.5 billion in 2006 compared to $10.3 billion in 2004 -has been fueled largely by debit card transactions (popular among Generation Plastic) and bank practices that increase the number of overdrafts (popular at many banks and credit unions).

Some of those unsavory bank practices are related to daily account reconciliation. When banks reconcile a customer’s transactions for the day, they often deduct funds in order of the largest payment to the smallest, regardless of the order the transactions were made. The industry acknowledges this is their standard practice. By manipulating the order, the bank still covers the same number of payments, even when the account balance goes into the negative. But they can count more of them as overdrafts-and collect more fees in the process-if they deduct the largest debit first.

Other practices, such as enrolling customers in overdraft “protection” programs automatically without their consent or holding deposits for extended periods but processing checks and debits immediately, can lead to unexpected overdrafts for consumers as well.

There is a solution, however, and it’s pending before the U.S. House Financial Services Committee. HR 946, the Consumer Overdraft Protection Fair Practices Act, sponsored by Carolyn Maloney (D-NY) would require banks and credit unions to disclose the interest rates of these abusive overdraft loans so that consumers can compare the cost of this credit option to others. It would also empower account holders by allowing them to the choice to opt-in to an overdraft program, rather than automatically enrolling them without their express consent. It would also prohibit banks from manipulating the order they process checks and debits in order to increase fees.

The legislation is sorely needed for the sake of consumer protection. Even our most vulnerable and inexperienced consumer group-new, young bank customers-is not being shielded from abusive practices. Instead of protecting their financial wellbeing, these overdraft loans are robbing young people of a secure and solid start in their lives.

In the meantime, all consumers, but especially younger ones, should be wary of overdraft protection programs – especially those in which they were automatically enrolled or those that are not linked to a line of credit or to a savings account. Unfortunately, overdraft “protection” programs rarely consider the consumer’s best interests and typically protect nothing more than the bank’s bottom line.

Ginna Green and Leslie Parrish work with the Center for Responsible Lending. Parrish is the co-author, with Peter Smith, of Billion Dollar Deal, the Center’s recent report on overdraft fees and how they impact young adults.

© 2007 Independent Media Institute. All rights reserved.
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