Regulation to prevent systemic risk is ok, regulation to slow our economy and prevent job creation is another thing. Lets spur growth and stop corruption. The two are not necessarily at odds with each other. Smart regulation to prevent an advantage in investment for the large brokerages is good. Regulation that prevents investment and profit for small investor’s is a bad thing.
You are right in one sense: there should not be such burdens placed upon serving the populace, to the degreee where banks no longer find it worthwhile or profitable to serve this sector. As with inner-city bank locations, there is absolutely no reason for banks to go into a sector and lose money. It makes absolutely no sense. So, when the federal government (whose own regulations and focus on getting loans made to unworthy individuals were what precisely brought this entire mess upon us) is creating rules, it is wise to go with less. Why? The greater the regulations, the larger the pricetag on capturing and servicing the business. So, if you want to regulate everything into oblivion, there is a point at which those simply trying to borrow money find the resources are not there, as that money has been instead routed to products and services which provide a greater ROI, with fewer fed regulations to pay for and contend with.
Money flows like water. It will naturally flow to areas where it is easiest for the money to accumulate (i.e. profit greatest and most safely). To expect otherwise is to run a fool’s errand. Unfortunately, it seems the leftists are more focused on running the fool’s errand, rather than fixing the big holes in the game (government tinkering with the market, congresspeople trying to buy votes with other people’s money by implementing programs which are at odds with financial success). These pople are sick fools.
Interesting how quick we are to assume the worst in others – and I’m not omitting myself from that observation.
I don’t think that opposition to the consumer protection agency amounts to a callous disregard for consumers. Rather I think it’s an appreciation of the value of sound loan underwriting, where the main concern is the ability of the borrower to pay the loan back. How much better off would we have been in the past housing collapse had banks not been faced with quotas by the Community Reinvestment Act?
Reasonable people may differ on its impact, but people of goodwill should be able to differ on their opinion of the best policy without throwing bricks at each other.
the sick fools are those that continue to perpetuate the distortion that “regulations and focus on getting loans made to unworthy individuals were what precisely brought this entire mess upon us”
Greed and the Bush/Cheney regime that made that greed a virtue is what brought this entire mess upon us. Nothing else.
“Greed and the Bush/Cheney regime that made that greed a virtue is what brought this entire mess upon us. Nothing else.”
You’re wrong!! The housing bubble was started in the 1990’s under Bill Clinton and orchestrated by Barney Frank (D-MA) and Chris Dodd (D-CT). It’s the Cloward-Piven theory at work: Overload the system so it breaks down then government can swoop in and set-up a new system (i.e. Financial Regulation Control).
The housing bubble was started in the 1990’s under Bill Clinton and orchestrated by Barney Frank (D-MA) and Chris Dodd (D-CT). It’s the Cloward-Piven theory at work: Overload the system so it breaks down then government can swoop in and set-up a new system (i.e. Financial Regulation Control).
Thank you for repeating the sound bite and talking points. Hannity should be pleased.
Now tear yourself away from the incendiary disinformation and get to the truth – though be prepared for your current political standpoint to wither away – if you can accept the truth, as it might not be as viscerally resonant for you.
The financial reform bill had its biggest teeth pulled in late back-room committee negotiations. What does the GOP propose? They ought to use caution… the bank bailout was one of the first things that sparked the populist “tea party” outrage, so any action perceived as unfairly benefitting Wall Street big banks will not be received well. Not to mention Obama would veto anything passed. They could end up expending valuable political capital for no ultimate gain.
We needed legislation separating traditional lending operations from investment activities and we didn’t get it. We needed legislation keeping a close eye on the derivatives market. We got some help there but not enough- the toughest parts were totally defanged.
Take a look at Obama’s economic team (the ones that matter, not the voices of reason during the campaign that were shelved post-election) and tell me he would sign a bill that was even the slightest bit bad for Wall St business as usual. Do you think Geithner recommended it? Hell no he didn’t. Did Rubin? Nope. They had Volcker but he has been patently ignored since day one in office.
If the GOP really had some balls they would enact rules holding Congress to the insider trading rules you & I must follow. If you have a minute check out Congress’ average return on investments versus the general populace and the markets… pretty interesting stuff. They can legally trade on insider information. You cannot. And the numbers clearly show this in action.
To do that I would be resorting to the same sound bite, talking point approach to a complex situation.
I watch neither CNN or Fox, I get most of my information from written press, and not the distilled, mass media type.
On the surface, the contention that attempts to get more people buying homes was the cause of the meltdown is laughable. It was not simply marginally qualified borrowers being given mortgage that was the cause, though that was an element – the financial breakdown resulted from the financiers manipulation of those mortgages into other questionable financial instruments. If the mortgages were that unsound, the financial giants should have known better than to exploit them for their profit. Most likely they did know better, but the profit potential outweighed the risks. The bankers took advantage of the lax regulation. They gambled, the US lost.
The Clowen-Pivey association is a construct. Clowen-Pivey was approach to combat what appeared a racially segrated poverty strata in the early 70s – an approach never embraced by either party. It is simply a matter of political convenience that ideologues refer to it in the sub-prime situation to mislead and advance their agenda.
I am not the one who introduced the term, ‘sick fools” into the discussion. It was put out there by LEM. I like the financiers, used it as a convenient tool to place emphasis on my point.
Someone apparently thought your posts sounded like mine. Actually, I am flattered…I like what you said.
And I will second what you said about the “housing crisis.” the move to foster home ownership was not a socialist plot foisted onto the taxpaying public by Bill Clinton. It was actually begun directly after WWII to help house soldiers returning from war and their new families. The Levittowns stand as part of that impetus…and from that time period.
Every president since Truman has supported the American dream and ideal of home ownership, so to those that cast blame on the politicians, cast it over all of them, for that is the actual fact. the disctrimination in failing to award home loans to minorities and in certain areas that were predominantly minority brought further govt action to nprevent this unwarranted discrimination in the 70’s. For those of us that remember, the same thing happened with foreclosures, etc., coupled with double digit inflation, a recession, and all those other good things, as well as ARM mortgages that were disastrous for many homeowners due to what happenened with inflation. But the big boys hadn’t figured out how to market dross as CDOs yet, so the financial system was not brought down…but a lot of this today is so deja vu. In the 70’s the homeowner defaulted because of the recessionary job losses and the incredible inflation rate affecting the ARMs.
I support what karl says: it seems non productive to blame the individual irresponsible homeowner, when presumably bankers should have known the loans were not sound; after all, it is their business to know what is a sound loan and what is not. I also agree that the bankers just couldn’t resist the potential to put lipstick on a pig for greedy profit. This was just another huge Ponzi scheme of selling and reselling and repackaging something of little value that churned through the market to glean the commissions and other advantages…all at discounted tax rates, I might add< as opposed to those paid by the working slob.
To condemn one sector and not the other is simply not just. I am really so sure that some poor slob wanting to buy a neat house in the burbs with a yard for the kids and good schools ultimately was plotting to bring down the financial system. Of course he could afford it; the bankers approved the loans, didn't they? Please also see article today about the TARP fraud perpetrated by some banks on us, we self same taxpayers. CLEARLY, oversight is needed and warranted.
And Karl, thank you for also knowing what the name "Cassandra" represents; very few do.
There is some truth to what you say, but you leave a few things out.
Yes, Ever since Truman from what I read promoted the American Dream. But the big difference between then and now is that back then, people understood that they had to EARN the American Dream, not just have it handed to them.
One of the big reasons why the leanders gave out those loans is because they would get sued if they didn’t for “discrimination”. Back when Obama was a senator, he and a few others sued Citigroup or Citibank for “discrimination against lower income families”. They were turning the bad risks away.
But let’s put that aside for a moment. Let’s say that they banks weren’t forced to give out the loans, and the banks desided for some unknown reason that they were willing to lend out money to people they figured would not pay it back. Its still the person that borrowed the money in the first place fault that they took out the loan that they KNEW they couldn’t pay back. Now, I know that there are people that defaulted on their loan due to no fault of their own. The company they worked for went under or they got really sick, ect ect, but I highly doubt that they are the majority.
Its like if someone gives you food that is perfectly fine as long as you keep it in the fridge. But you don’t and get sick after eating it. Is that the person that gave you the food’s fault?
Yes, Nerd, you can continue to blame the individual, but remember, since the banks making the loans could sell them to Fannie, they had no further “skin in the game.” either. That they could unload these with no consequence to themselves creates certainly a “moral” hazard, as it were. and of course, the financial whiz kids at goldman, lehman, etc., took that to a whole other level by packaging these and selling these “toxic” loans, pyramiding the damage.
I cannot in good conscience condemn the individual who wanted to get part of that dream. I cannot condemn those who wanted to extend that dream to those lower down on the income scale. the individuals I do condemn are those (upper) middle class that walk away from their mortgages because they are “upside down” and do this as a financial decision since the “investment” of their home is no longer performing well for them. But then, given the examples that we see in the media of CEOs and financial institutions getting off scott free despite the havoc in people’s lives they have wreaked, I guess that sets the bar for the “new morality.”
While I probably would never be found in the ranks of the tea party devotees, I do agree that the “moral compass” of this country needs some serious resetting…you can try to work from the bottom up, but I think it also needs to happen, even if forcefully, from the top down as well.
Make it accessable, auditable, and accountable! Remember, the Federal Reserve is private and NOT a government agency.
are they suggesting that our beloved elected officials actually CAREFULLY READ a bill before they pass it??? Perish the thought!!!
Regulation to prevent systemic risk is ok, regulation to slow our economy and prevent job creation is another thing. Lets spur growth and stop corruption. The two are not necessarily at odds with each other. Smart regulation to prevent an advantage in investment for the large brokerages is good. Regulation that prevents investment and profit for small investor’s is a bad thing.
“Republicans despise the consumer bureau and have long argued that consumer protections should not trump the safety and soundness of banks.”
Protecting the consumer should never trump protecting business. Consumers are merely a factor of production and a means of making a profit.
You are right in one sense: there should not be such burdens placed upon serving the populace, to the degreee where banks no longer find it worthwhile or profitable to serve this sector. As with inner-city bank locations, there is absolutely no reason for banks to go into a sector and lose money. It makes absolutely no sense. So, when the federal government (whose own regulations and focus on getting loans made to unworthy individuals were what precisely brought this entire mess upon us) is creating rules, it is wise to go with less. Why? The greater the regulations, the larger the pricetag on capturing and servicing the business. So, if you want to regulate everything into oblivion, there is a point at which those simply trying to borrow money find the resources are not there, as that money has been instead routed to products and services which provide a greater ROI, with fewer fed regulations to pay for and contend with.
Money flows like water. It will naturally flow to areas where it is easiest for the money to accumulate (i.e. profit greatest and most safely). To expect otherwise is to run a fool’s errand. Unfortunately, it seems the leftists are more focused on running the fool’s errand, rather than fixing the big holes in the game (government tinkering with the market, congresspeople trying to buy votes with other people’s money by implementing programs which are at odds with financial success). These pople are sick fools.
Interesting how quick we are to assume the worst in others – and I’m not omitting myself from that observation.
I don’t think that opposition to the consumer protection agency amounts to a callous disregard for consumers. Rather I think it’s an appreciation of the value of sound loan underwriting, where the main concern is the ability of the borrower to pay the loan back. How much better off would we have been in the past housing collapse had banks not been faced with quotas by the Community Reinvestment Act?
Reasonable people may differ on its impact, but people of goodwill should be able to differ on their opinion of the best policy without throwing bricks at each other.
the sick fools are those that continue to perpetuate the distortion that “regulations and focus on getting loans made to unworthy individuals were what precisely brought this entire mess upon us”
Greed and the Bush/Cheney regime that made that greed a virtue is what brought this entire mess upon us. Nothing else.
Good luck getting any overhaul of the Wall Street reforms past my veto pen.
“Greed and the Bush/Cheney regime that made that greed a virtue is what brought this entire mess upon us. Nothing else.”
You’re wrong!! The housing bubble was started in the 1990’s under Bill Clinton and orchestrated by Barney Frank (D-MA) and Chris Dodd (D-CT). It’s the Cloward-Piven theory at work: Overload the system so it breaks down then government can swoop in and set-up a new system (i.e. Financial Regulation Control).
The housing bubble was started in the 1990’s under Bill Clinton and orchestrated by Barney Frank (D-MA) and Chris Dodd (D-CT). It’s the Cloward-Piven theory at work: Overload the system so it breaks down then government can swoop in and set-up a new system (i.e. Financial Regulation Control).
Thank you for repeating the sound bite and talking points. Hannity should be pleased.
Now tear yourself away from the incendiary disinformation and get to the truth – though be prepared for your current political standpoint to wither away – if you can accept the truth, as it might not be as viscerally resonant for you.
The financial reform bill had its biggest teeth pulled in late back-room committee negotiations. What does the GOP propose? They ought to use caution… the bank bailout was one of the first things that sparked the populist “tea party” outrage, so any action perceived as unfairly benefitting Wall Street big banks will not be received well. Not to mention Obama would veto anything passed. They could end up expending valuable political capital for no ultimate gain.
We needed legislation separating traditional lending operations from investment activities and we didn’t get it. We needed legislation keeping a close eye on the derivatives market. We got some help there but not enough- the toughest parts were totally defanged.
Take a look at Obama’s economic team (the ones that matter, not the voices of reason during the campaign that were shelved post-election) and tell me he would sign a bill that was even the slightest bit bad for Wall St business as usual. Do you think Geithner recommended it? Hell no he didn’t. Did Rubin? Nope. They had Volcker but he has been patently ignored since day one in office.
If the GOP really had some balls they would enact rules holding Congress to the insider trading rules you & I must follow. If you have a minute check out Congress’ average return on investments versus the general populace and the markets… pretty interesting stuff. They can legally trade on insider information. You cannot. And the numbers clearly show this in action.
Good op-ed piece on Bloomberg today about the necessity (or not!) of hedge funds:
http://www.bloomberg.com/news/2010-09-20/hedge-funds-have-run-out-of-reasons-to-exist-commentary-by-matthew-lynn.html
It’s a timely article for this “revisiting financial reform” piece.
In your insulting of LEM, I noticed you said nothing to disprove what they said.
Hannity at least sources his material. And before you say anything, I don’t watch Fox hardley at all. I get the majority of my news from CNN and ABC.
So I say to you, SHOW us where LEM and Hannity is wrong.
Oh, Karl – or should I say Cassandra? – you’re drinking the kool aid at MSNBC again, aren’t you?
To do that I would be resorting to the same sound bite, talking point approach to a complex situation.
I watch neither CNN or Fox, I get most of my information from written press, and not the distilled, mass media type.
On the surface, the contention that attempts to get more people buying homes was the cause of the meltdown is laughable. It was not simply marginally qualified borrowers being given mortgage that was the cause, though that was an element – the financial breakdown resulted from the financiers manipulation of those mortgages into other questionable financial instruments. If the mortgages were that unsound, the financial giants should have known better than to exploit them for their profit. Most likely they did know better, but the profit potential outweighed the risks. The bankers took advantage of the lax regulation. They gambled, the US lost.
The Clowen-Pivey association is a construct. Clowen-Pivey was approach to combat what appeared a racially segrated poverty strata in the early 70s – an approach never embraced by either party. It is simply a matter of political convenience that ideologues refer to it in the sub-prime situation to mislead and advance their agenda.
I am not the one who introduced the term, ‘sick fools” into the discussion. It was put out there by LEM. I like the financiers, used it as a convenient tool to place emphasis on my point.
Cassandra? Why that name. Is it because I speak the truth in such a way that the doomed who would best benefit from it are unable to understand?
See prior posts regarding news sources
Karl
Someone apparently thought your posts sounded like mine. Actually, I am flattered…I like what you said.
And I will second what you said about the “housing crisis.” the move to foster home ownership was not a socialist plot foisted onto the taxpaying public by Bill Clinton. It was actually begun directly after WWII to help house soldiers returning from war and their new families. The Levittowns stand as part of that impetus…and from that time period.
Every president since Truman has supported the American dream and ideal of home ownership, so to those that cast blame on the politicians, cast it over all of them, for that is the actual fact. the disctrimination in failing to award home loans to minorities and in certain areas that were predominantly minority brought further govt action to nprevent this unwarranted discrimination in the 70’s. For those of us that remember, the same thing happened with foreclosures, etc., coupled with double digit inflation, a recession, and all those other good things, as well as ARM mortgages that were disastrous for many homeowners due to what happenened with inflation. But the big boys hadn’t figured out how to market dross as CDOs yet, so the financial system was not brought down…but a lot of this today is so deja vu. In the 70’s the homeowner defaulted because of the recessionary job losses and the incredible inflation rate affecting the ARMs.
I support what karl says: it seems non productive to blame the individual irresponsible homeowner, when presumably bankers should have known the loans were not sound; after all, it is their business to know what is a sound loan and what is not. I also agree that the bankers just couldn’t resist the potential to put lipstick on a pig for greedy profit. This was just another huge Ponzi scheme of selling and reselling and repackaging something of little value that churned through the market to glean the commissions and other advantages…all at discounted tax rates, I might add< as opposed to those paid by the working slob. To condemn one sector and not the other is simply not just. I am really so sure that some poor slob wanting to buy a neat house in the burbs with a yard for the kids and good schools ultimately was plotting to bring down the financial system. Of course he could afford it; the bankers approved the loans, didn't they? Please also see article today about the TARP fraud perpetrated by some banks on us, we self same taxpayers. CLEARLY, oversight is needed and warranted. And Karl, thank you for also knowing what the name "Cassandra" represents; very few do.
There is some truth to what you say, but you leave a few things out.
Yes, Ever since Truman from what I read promoted the American Dream. But the big difference between then and now is that back then, people understood that they had to EARN the American Dream, not just have it handed to them.
One of the big reasons why the leanders gave out those loans is because they would get sued if they didn’t for “discrimination”. Back when Obama was a senator, he and a few others sued Citigroup or Citibank for “discrimination against lower income families”. They were turning the bad risks away.
But let’s put that aside for a moment. Let’s say that they banks weren’t forced to give out the loans, and the banks desided for some unknown reason that they were willing to lend out money to people they figured would not pay it back. Its still the person that borrowed the money in the first place fault that they took out the loan that they KNEW they couldn’t pay back. Now, I know that there are people that defaulted on their loan due to no fault of their own. The company they worked for went under or they got really sick, ect ect, but I highly doubt that they are the majority.
Its like if someone gives you food that is perfectly fine as long as you keep it in the fridge. But you don’t and get sick after eating it. Is that the person that gave you the food’s fault?
Yes, Nerd, you can continue to blame the individual, but remember, since the banks making the loans could sell them to Fannie, they had no further “skin in the game.” either. That they could unload these with no consequence to themselves creates certainly a “moral” hazard, as it were. and of course, the financial whiz kids at goldman, lehman, etc., took that to a whole other level by packaging these and selling these “toxic” loans, pyramiding the damage.
I cannot in good conscience condemn the individual who wanted to get part of that dream. I cannot condemn those who wanted to extend that dream to those lower down on the income scale. the individuals I do condemn are those (upper) middle class that walk away from their mortgages because they are “upside down” and do this as a financial decision since the “investment” of their home is no longer performing well for them. But then, given the examples that we see in the media of CEOs and financial institutions getting off scott free despite the havoc in people’s lives they have wreaked, I guess that sets the bar for the “new morality.”
While I probably would never be found in the ranks of the tea party devotees, I do agree that the “moral compass” of this country needs some serious resetting…you can try to work from the bottom up, but I think it also needs to happen, even if forcefully, from the top down as well.