I know, calling John Edwards a hypocrite and then pointing out that hypocrisy is getting to be fish-in-a-barrel easy, but this latest one takes the cake:
Democratic presidential contender John Edwards has investing ties to subprime lenders who are foreclosing on victims of Katrina, according to a report published Friday.
The Wall Street Journal said there are 34 homes in New Orleans that face foreclosure from the subprime unit of Fortress Investment Group. Edwards has about $16 million in Fortress (Charts), a hedge fund and private equity manager, the newspaper said.
...Rising defaults among subprime mortgages - those home loans given to borrowers with the weakest credit records has triggered a credit crunch and resulted in a wave of foreclosures.
Where to begin? Edwards has $16 million invested in a company that offers mortgages to those with credit problems. Many of those people are the poorer among us or many are the unfortunate such as victims of Katrina. Subprime lenders saw a market niche whereby they could lend to these people -- generally at higher interest rates--and make a lot of money. In essence, they lent money to those who were incapable of qualifying anywhere else and probably shouldn't have received loans and charged a premium for the service.
Edwards says he may or may not have known about subprime lending. That's a real endorsement for president, "I can't remember."
Anyone who has an iota of brains saw this subprime crash coming. Lending money to those who are not able to pay it back does nothing for those people but drive them into bankruptcy. There's a reason it's known as "predatory lending". The markets are experiencing huge swings because of this issue and it's not going to end soon.
Now to Edwards; he's spinning this as if he invested the money to help poor people and once he discovered that -- gasp! -- they were actually foreclosing on those who couldn't pay and some of them are Katrina victims, well, he's going to pull his money out or make sure it isn't used for subprime lending. I would imagine with a nice, tidy profit.
This is Edwards in a nutshell; he has spoken out against subprime lending before saying that it wrong but was at Fortress when they increased their subprime business. He knew about the lending practices and he knew that they were making money on the backs of those who have the most to lose.
To add to the hypocrisy, this is from Edwards campaign blog (posted by one of his diarist's and we know how selective he is about them) posted less than a week ago:
Predatory lending - including pay day lenders as well as sub prime mortgagors - is a genuine populist issue where John can clearly distinguish himself from the crowd. I'd like to see him really go after it.
First, predatory lending - including but not limited to sub prime mortgages - is not new despite the only recent attention it is receiving in the main stream media. It is and has been directed against the poorer consumer for at least 10 years - there are consumer experts who have gone unheeded for at least a decade. The results are tragic but not that well known outside consumer circles.
Emphasis mine. Yeah, "two Americas", one where you can make money off of those you claim to be standing up for and another where you talk out of both sides of your mouth when asked about it.
Update: (8/17/07 1609) OK, people seem to not understand that Edwards worked for Fortress:
BusinessWeek has learned that Edwards has signed up to work for the New York-based private investment concern Fortress Investment Group as a part-time senior advisor. As such, he will be "providing support in developing investment opportunities worldwide and strategic advice on global economic issues," says Edwards spokesperson Kim Rubey. Fortress declined to comment about hiring Edwards, who teamed up with Massachusetts Senator John Kerry in a losing bid against President George Bush and Vice-President Dick Cheney last year.
He was an investor and an employee in a senior position.
Reader Comments ( Page 3 of 3)
31. One remembers when the Edwards'made gratuitous cheap shots at the sexual orientation of the Cheney's daughter. At the time Lynn Cheney, a woman respected on both the left and the right, said of John Edwards, "He is not a good man." That's good enough to me. They are mean spirited people.
Amos Hoople at 12:03AM on Aug 18th 2007
32. Edwards is clearly going into the tank. This ,of course, is where he belongs. The man has tried to be all things to all people. His wife has been of no help as her mean spiritedness comes through on most occasions. One shudders if he were to be picked as Vice President.
amos hoople at 12:13AM on Aug 18th 2007
33. You do realize that one of the main reasons that people are going to lose their homes is because of the panic, paritally caused by politicians. The same politicians who are screaming over subprime lending now were screaming 4 years ago because there wasn't enought credit being offered to poor poeple. The overall amount of foreclosed properties was a tiny fraction of all loans being made but when the panic hit and investors started tightening underwriting guidelines it became impossible for subprime borrowers to refinance. Also, the buzzward out there is subprime but the true loan program that has caused this extreme of a meltdown are actually ALT-A loans, loans given to people with good credit that need either jumbo loans (to afford homes in CA) or limited documentation. The subprime lenders had their first hit this year in FEB/MAR and the riskiest loans were eliminated. The second wave started in Jan but it wasn't until the ALT-A defaults began to climb that the market truly went hay wire. This credit crunch goes much, much deeper than subprime loans.
Also, for those of you who don't understand, higher interest rates are charged for people with bad credit because there is more risk associated with them. Loans are bought for investors and the reward (profit) has to outweigh the risk otherwise you have no loan program. That is what is happening now. The risk isn't worth it at the moment for investors so they aren't buying.
P.S. Personal Responsibilty! You may not want to accept this but subprime mortgage lenders provide disclosure after disclosure to their borrowers explaining the loan they are getting. They have time to cancel, many provide counseling. Of course there those who take advantage people, that happens in any industry, but by and large, the over whelming majority of mortgage companies are providing a great servie...of course, at a profit! Buying a home is a privelage not a right!
Michael at 9:31AM on Aug 18th 2007
34. Geri -
"I know what I can afford to pay monthly why shouldn't they?"
When you lose everything you own and are left homeless with your 3 children, one of whom is a newborn, your insurance company is intentionally dragging it's feet in getting you your money to begin rebuilding your life, and eventually end up having to spend your entire life's savings to do it (as I did), I can assure you...you'll take a loan that you normally might not take.
Rick Garcia -
"If the Bush Administration would have fixed the levies we would not be having this conversation."
"Bush's friends and family are making money hand over fist off of this war, but you deflect that because you are a neocon prick sucker."
So far, yours is the most idiotic post on this board. Obviously incapable of making a reasoned, intelligent post, you're resorting to the tried and true schoolyard tactic, favored be millions of 10 year olds, of calling someone you don't agree with names rather than make an informed, fact-backed arguement.
By the way, Clinton had 8 years to do something about the levee's, too, as the levee issue has been known about for years, and if memory serves me correctly, he sent a couple of our boys to the middle east instead of fixing them (the levee's) as well...
JL at 9:49AM on Aug 18th 2007
35. The term subprime lending is nothing new. The banking industry has been using the idea for years They issue credit cards to people that should not have one in the first place.
Donald Laustrup at 6:38PM on Aug 19th 2007
36. the guy is a creep..period,, he owns one of the biggest houses in my state (no problem with that mind you)...but all this compassion crap is just that,,BS!!! the only reason this guy would stop at a car accident is to hand out a business card in order to sue somebody... we all know it here.
mony at 8:18PM on Aug 19th 2007
37. "Hmm Ray, I guess he was an investor and senior management, which is an executive. I guess I was right after all."
You know perfectly well Part-time Senior Advisor is neither company executive or management Scott. He's a part-time consultant, not involved in daily operations as you suggest.
Mark at 11:07PM on Aug 19th 2007
38. This is no "right-wing tilt" but for John N to say that Edwards has done more for needy people than anyone else is laughable. As someone who voted him into office as Senator and then watched him use that office to serve himself instead of the people of NC and the US, I feel very strongly that the person that Edwards cares most about is EDWARDS. He was about the biggest joke as a Senator and I am personally ashamed that I cast my vote for him. Whether he is a hypocrite or not. I'll leave for others. Self-serving, you better believe it.
Sam at 3:36PM on Aug 21st 2007
39. He could give a rebate to the Katrina victims. That would help his image -NOT!
VOTE FOR FRED THOMPSON
NOTPC4U at 3:59PM on Aug 21st 2007
40. Scott, I took a little time to go fishing and in my absence you try to become Moby Dick? John Edwards made money in America using the abusive system we have in place. Are you arguing it's unAmerican to make money? Perhaps, you are developing a consious and telling all Republicans that it's wrong to exploit the poor? The system doesn't make John a hypocrit. Imagine if everyone gave back every dollar they stole by exploiting someone poor? How much money would that be? Coinstar charges for turning in change. Do they charge the rich a fee for breaking $100? Subprime lenders take huge risks making the American Dream available to the poorest of the poor and some fail. Is Edwards a hypocrit for giving those left behind by Katrina or Bush a chance? Giving money isn't the problem or the answer. Profiting from our plight is the cancer. Profiting from selling water at a flood is wrong. Raising the price of a hotel room or raising the price of gas just because we can is unAmerican. Making these loans don't make Edwards look bad, it's the foreclosure stupid! Did Edwards foreclose on these loans for personal gain? There's no profit in that and that would make him a hypocrit. Edward's problem is he's not poor and he can't lead an Army of poor people. He needs a new Martin Luther King. Finally, you've got to play by the rules to win the game. You can't change the rules unless you win. Is this why you're being a Moby? Edwards could lead us to real change. Edwards and Obama as one could win in a landslide. They also need to hire the right consultant. I'm baaaack! What I gave has been free. That's unAmerican.
Cecil Jones at 7:57AM on Aug 23rd 2007
41. Steve
Your entire statement is "right wing", except for that last line, and would be labeled as such by the "left wing" crowd. Right wing people do believe in investing/lending to better their own position monetarily. This is, as you state, a free market economy. The left wing view, as I am sure you are, would be to lend to those individuals with little or no interest and a long repayment period.
The hypocrisy of Mr. Edwards is that his views do not support his actions, both financial and environmental too. Don't demonize sub prime lenders and then say it was an oversight that you did not know where and what your 16 million was invested in. For someone with Edwards background in both law and business to not know "exactly" where and what his money was doing is absurd!
John Edwards, tilted "left wing" and "touting" we all should chip for the greater good, got caught doing what every so called "right wing" person is able to do in a "free market economy", earn as great of a return on investment as possible.
This, Steve, as you know is how our economy works. Edwards had an investment opportunity to make a great ROR and took it. He has every right to do this, and should, but do not try and flip/slant/turnaround what he has done after being called on it. Just state the facts; it was a business decision for his future and at the time made sense, now that he is running for President he should have "diversified".
Oh, quick note on my reference to the environment. Edwards and many others want us to decrease our personal "carbon footprint" while they increase their own. Example: They still fly in private jets all over the country and world creating a massive carbon footprint, but, this is okay because they purchase "carbon credits" to do so.
Steve, here is a "surprising" article from two of the most left-tilting news organizations out there.
http://www.time.com/time/magazine/article/0,9171,1599714,00.html
Bill at 2:47PM on Aug 27th 2007
42. Sorry, the comment was for Steve, 1:37 p.m. Aug 17th
Bill at 11:31PM on Sep 25th 2007