And here I thought that Democrat partisans were supposed to protect the little people.

American Thinker- Herbert and Marion Sandler, a New York lawyer and Wall Street analyst respectively, bought a small California thrift in 1963 and built it into GDW — one of the largest thrifts in the nation. The company’s business was built on adjustable rate mortgages (ARMs. These were mortgages offered at low “teaser” rates that ratcheted upward as interest rates increased. They were often sold aggressively to unsophisticated home buyers who did not comprehend the vast financial risks they were taking, or who assumed that housing prices would rise high enough to provide a profit to them when they sold their houses. They were targets for lenders peddling mortgages that should have been stamped with a skull and crossbones, for these were among the most seductive and dangerous types of mortgage.This book of business is the core reason for Wachovia’s current difficulties

The Sandlers knew their business far better than any other person could. Not only were they the founders and major owners, they famously ran the company as a husband and wife team for all these years.

So why did they happen to cash out at precisely the right time? Did they see the handwriting on the wall, realizing the massive risks inherent in the mortgages they originated throughout one of the most overheated real estate markets in the nation’s history? They are not talking, but when smart people cash in some of their chips, it’s rarely a good time to bet against them. Nevertheless, Wachovia bet 24 billion dollars and lost big time.

The collapse was primarily caused by the GDW purchase, which became an albatross around Wachovia’s neck soon after the purchase. “Wachovia found itself in ARM’s Way” was the headline of a recent Wall Street Journal article. A huge percentage of these Wachovia ARMs were made to deep subprime borrowers with very poor credit scores. Most of these were “inherited from its ill-timed acquisition of Golden West” at the end of the housing boom in 2006. 

The Sandlers have started to invest their billions of dollars politically, in the manner of George Soros, sugar daddy of many far-left wing groups and an early and prominent supporter of Presidential candidate Barack Obama. Soros has developed an empire of so-called 527 groups, putatively independent political activists groups that have influence within the Democratic Party. These 527 groups include the Center for American Progress, MoveOn.Org, Human Rights Watch, Media Matters and a slew of other like-minded groups .

This set of political organizations also includes the International Crisis Group, whose foreign policy staff is likely to contain the embryonic future of the State Department in an Obama Administration . Eli Pariser, who heads MoveOn.Org, boasts about his group’s role in the Democratic Party: “Now it’s our party: we bought it, we own it, and we are going to take it back.”

They have already done so, in large measure. source

Filed under: Marion Sandler