Boom Bust and Blame

Crisis A-Z


Raines, Franklin:
the former chief executive of Fannie Mae. In September 2004, Raines was a favorite to be Treasury Secretary should John Kerry have won the White House. But the career of the man who grew up poor in Seattle, won a Rhodes Scholarship and went to Harvard, became White House budget director and CEO of Fannie Mae, crashed to a screeching halt in December 2004. The Securities & Exchange Commission's top accountant revealed earnings at Fannie Mae had been misstated for 3 1/2 years, leading to an estimated $9 billion restatement that wiped out 40% of profits from 2001 to mid-2004.

Raines described his exit as an "early retirement' that was self-initiated and says that it shows he was accountable for the SEC findings. His compensation in 2003, including $3 million in stock options, totaled about $20 million.

In 2009, new questions were raised about Raines. The top Republican on the House Committee on Oversight and Government Reform accused Raines of using a special program at mortgage lender Countrywide Financial to receive a below-market rate on a home loan. That was contrary to sworn testimony Raines made to Congress in December 2008.

Rep. Darrell Issa of California released documents that he said show Raines received discounts and waivers of fees on a June 2003 home loan through the "Friends of Angelo" program, named after Countrywide's then-chief executive, Angelo R. Mozilo. An attorney for Raines said Issa failed to demonstrate that the rates Raines received were below the normal price for someone with a high credit score, and maintained the loan was underwritten using standard procedures.

Raines and his wife Wendy Farrow Raines and their daughters Laura, Andrea and Sarah live in the Washington, D.C. area.

Raiter, Frank:
retired Managing Director of Standard & Poor’s. He was also a head of S&P’s mortgage backed securities ratings group. He served as Managing Director from 1990 until 2005, when he retired from the company. He moved on to become a Director of Luminent Mortgage Capital Inc.

Raiter attended North Carolina State University and graduated in 1973 with a bachelor’s degree in Economics. He then earned a Master of Business Administration degree in finance and investments from the University of North Carolina at Chapel Hill.

Ranieri, Lou:
founder of Hyperion Private Equity Funds and the Chairman, CEO and President of Ranieri & Co. He is often regarded as the “father” of the securitized mortgage market. Before creating Hyperion, Ranieri was vice chairman of Solomon Brothers Inc – a company he joined in the 70s – where he helped develop its leadership in the mortgage-backed securities area.

Salomon and Bank of America were the first to develop mortgage-backed securities in 1977 and Ranieri was one of the main players in its creation. Ranieri never graduated from college.

Raynes, Sylvain:
An associate professor at Baruch College and a faculty member of the New York Institute of Finance. He is a principal and co-founder of R&R Consulting. Before founding his own firm, Raynes worked as risk manager for Credit Suisse First Boston. Prior to that, he was a senior analyst for Moody’s Investor Service.

Raynes graduated from the von Karman Institute in Belgium with a M.A in Numerical Analysis and later earned a Ph.D. in Aeronautical Engineering from Princeton University.

A phase of the business cycle extending from a peak to the next trough and characterized by a substantial decline in overall business activity - output, income, employment, and trade – of at least several months' duration. As a rule of thumb, though not an official measure, recessions are often identified by a decline in real gross domestic product for at least two consecutive quarters.

movie produced by Daniel Sadek, using the fortune he made from the subprime mortgage business he founded, Quick Loan Funding, based in Costa Mesa, California. Sadek acquired a collection of 23 exotic cars and a 15 percent ownership stake in Swedish exotic maker Koenigsegg. His cars are featured in the film, and one was wrecked in the production. Another was totaled in a promotional race. Sadek personally covered the movie's reportedly $26 million production budget and all the marketing expenses entirely out of his own pocket. The Los Angeles Times called it “eye candy for motor heads — or 14-year-old boys, or 14-year-old motor heads… features hot cars, customized women, martial arts, kidnapping, female empowerment, Iraqi war vets and the always-entertaining image of million-dollar autos being driven under 36-ton trucks.”

A loan that adds to the principal balance owed, usually for property or home improvements, and alters the payment amount and terms. Scheduled debt payments are modified, often to reduce finance charges or the loan payments.

Reid, Harry:
Senior United States Senator from Nevada. He has been a leader of the Senate Democrats since 2005 and became the first member of The Church of Jesus Christ of Latter-day Saints to serve as Majority Leader.

Born in Searchlight, Nevada on December 2, 1939, Reid attended Basic High School in Henderson, Nevada. There, he met Mike O’Callaghan, a teacher at the school who would become Nevada’s Governor in the future and would help him expand his political career. Reid attended Southern Utah University and Utah State University. He then earned his Juris Doctor Degree from George Washington University while he worked nights at the United States Capitol Police.

Reid joined politics when his former teacher Mike O’Callaghan picked him as his running mate for Nevada’s Lieutenant Governor Position in 1970. He went on to hold numerous public office jobs, including two terms in the House of Representatives on behalf of Nevada’s first district from 1983 to 1987.

After his tenure in the House of Representatives, Reid ran for the United States Senate in 1986 and assumed office for the first time in January 4, 1987.

He is married to Landra Gould and they still live in Searchlight. They have five children and 16 grandchildren.

Reserve Primary Fund:
A major money market mutual fund with a safety record had attracted more than $3.5 trillion in assets, operated by the Reserve. In mid-September 2008, the fund was valued at more than $60 billion. But following the collapse of Lehman Brothers that month, the Primary Fund saw an unprecedented run on its assets, with more than $40 billion of redemptions in two days. The redemptions were triggered by fears over $785 million of Lehman Brothers Holdings commercial paper, akin to short-term IOUs, that were held by the fund. The share price of the Reserve Primary fund fell below the sacred $1 mark. No major money fund open to the general public had ever allowed its share price to dip below a dollar — "breaking the buck," as it's called.

Rutledge, Ann:
Former Vice President and a Senior Analyst at Moody’s Investors Service from September 1995 to November 1999. She is also a co-founder of R&R Consulting, where is currently a Principal. Before working at Moody’s, Rutledge served as VP at JPMorgan Securities in Asia.

Rutledge received her education at Wellesley College and earned a B.A. in English and Philosophy in 1976. She then attended the University of Chicago and obtained an MBA in 1985 from the Booth School of Business.