Frank pushes for punishment for crisis

[editec]

According to what I've read the toxic morgages while troubling, are not the cause of this crises.

It was the dereivatives which were played off those bonds which are the root source of most banks being in trouble.

Anyone here more versed in the mechanics of how those derivatives are crashing the banks?

I'm like to understand it clearly.

The derevatives are apparently magnitudes of trouble larger than the mortgage problem, even if the mortgages are the original snowball that started the financial avalanche

I just don't understand how this worked.

 

[Annie]

If it stopped there it wouldn't have been so bad but the banks then bundled those risky mortgages and then spread them about everywhere like cancer.

It made the situation exponentially worse, no?

But wait, let's not let the horse outta the barn,, there would have been no rishy mortgages to bundle if the banks had not been intimidated in the first place. In other words politicians and politcal action groups such as ACORN started this avalanche into bandruptcy. Barney Fwank need to sit down and stfu about punishing banks.

But they still did it. They knew better and they still did it.

Then there are private businesses that are finding the way to stabilize and put the blame where it belongs:

NEWS FLASH: The Market Is Already Solving The Housing And Banking Crises

Solving The Housing And Banking Crises
Henry Blodget|Mar. 7, 2009, 10:29 AM|60
Tags: Economy, Nouriel Roubini, Citi, Bailout, Banks, Tim Geithner, Bank of America, Barack Obama
While Obama's team desperately cooks up one flawed plan after another to save the banking and housing systems, it's worth noting that the private market is already doing it.

The private market's solution does all the things the government wants its bailouts to do:

* It keeps homeowners in their homes
* It gets crap assets off bank balance sheets
* It gets money flowing through the economy again.​

The private market's solution also has several advantages that the government's bailouts do not:

* It is morally fair
* It doesn't blow hundreds of billions of taxpayer dollars
* It recognizes and accepts the banks' massive losses
* It removes the need for the government to micromanage zombie banks
* It places the responsibility and pain of those losses on the ones who should bear them: The people who made the dumb-ass loans in the first place.
* It doesn't so infuriate the Great Unbailed-Out Majority that everyone hates everybody.​

What is this miraculous solution that has so far eluded the best and the brightest in two presidential administrations?

* The government does what it is supposed to do: Seize, restructure, and sell off insolvent banks.
* The private sector does what it is supposed to do: Direct capital toward promising opportunities.​

Today's example: PennyMac.

PennyMac was started by Stanford Kurland, the No. 2 at Countrywide. (Leave that irony aside for a moment). PennyMac buys up mortgages that were previously held by failed banks like IndyMac. It buys them at, say, 30 cents on the dollar.

PennyMac then calls up the homeowner paying the mortgage who is about to be evicted, "How would you like a 50% cut in your mortgage payment?" The overjoyed homeowner gets to keep his house. PennyMac and its shareholders feast on the spread between 30 cents and 50 cents.

And who gets hosed?

The shareholders and bondholders of IndyMac. As they should. Because they were the ones who made the dumb decisions to invest in and lend money to IndyMac in the first place.

And where did PennyMac get the money to buy those IndyMac assets? In this case, from Blackstone. A private-market investor. But it doesn't really matter where PennyMac's particular money came from--because there are dozens of Blackstones waiting on the sidelines to invest in dozens of other PennyMacs. Why? Because, unlike Shitigroup and our other legacy albatrosses, PennyMacs are good investments.

(And if, by some miracle, Tim Geithner proves to be right about this also being a liquidity crisis and NO private market investors have money to invest in PennyMacs, then maybe the taxpayers can actually be put into a good investment for once).

Yes, it's that simple.

There is most definitely a role for government in the banking and housing crises: The FDIC needs to keep forcing banks to mark their assets to market, seize the ones that are insolvent, and sell off their assets to companies like PennyMac. That has been the government's job all along. It just needs to keep doing it, and the system will work.

 

[Article 15]

PennyMac was started by Stanford Kurland, the No. 2 at Countrywide. (Leave that irony aside for a moment). PennyMac buys up mortgages that were previously held by failed banks like IndyMac. It buys them at, say, 30 cents on the dollar.

PennyMac then calls up the homeowner paying the mortgage who is about to be evicted, "How would you like a 50% cut in your mortgage payment?" The overjoyed homeowner gets to keep his house. PennyMac and its shareholders feast on the spread between 30 cents and 50 cents.

When this happens does Penny Mac cut the total cost of the loan to the homeowner by 50% or just the payments?

 

[RetiredGySgt]

Good.

So he wants them to prosecute him for his refusal to allow better regulation of the Housing loan market? Or is he exempt as usual?

He wants prosecution of Acorn and other political groups that DEMANDED and got the rules changed so that bad loans could be made and then passed off so the loan was treated different then in the past? That would include Obama whom as a lawyer brought suits to force banks to make bad loans.

Ohh wait, I forgot, Liberals are always exempt from being held accountable.

 

[WillowTree]

If it stopped there it wouldn't have been so bad but the banks then bundled those risky mortgages and then spread them about everywhere like cancer.

It made the situation exponentially worse, no?

But wait, let's not let the horse outta the barn,, there would have been no rishy mortgages to bundle if the banks had not been intimidated in the first place. In other words politicians and politcal action groups such as ACORN started this avalanche into bandruptcy. Barney Fwank need to sit down and stfu about punishing banks.

But they still did it. They knew better and they still did it.

for fear of retribution by minority advocates, by threats of loss of business, you don't see the harm in that??? that sucks

 

[RetiredGySgt]

I'd put the GOP and Dems pretty much on equal footing. But in terms of total blame I would put them as less than half of it.

IMO, the banks and irresponsible individuals are more to blame.

imho the banks would not have lent irresponsibly unless pressured to do so. banks are in the business of making money not losing it.

If it stopped there it wouldn't have been so bad but the banks then bundled those risky mortgages and then spread them about everywhere like cancer.

It made the situation exponentially worse, no?

Allowed by whom? Encouraged by whom? Forced by whom to make those bad loans so that they could find ways out of the mess Government forced on them? Remind us again who opposed every attempt BY Bush and McCain to make more regulations and stop the bad loans and bad practices?

 

[Article 15]

Good.

So he wants them to prosecute him for his refusal to allow better regulation of the Housing loan market? Or is he exempt as usual?

He wants prosecution of Acorn and other political groups that DEMANDED and got the rules changed so that bad loans could be made and then passed off so the loan was treated different then in the past? That would include Obama whom as a lawyer brought suits to force banks to make bad loans.

Ohh wait, I forgot, Liberals are always exempt from being held accountable.

So Frank will be placing his own balls in a sling?

I wouldn't go that far ... I'm sure he's planning on covering his own ass.

.

 

[Article 15]

imho the banks would not have lent irresponsibly unless pressured to do so. banks are in the business of making money not losing it.

If it stopped there it wouldn't have been so bad but the banks then bundled those risky mortgages and then spread them about everywhere like cancer.

It made the situation exponentially worse, no?

Allowed by whom? Encouraged by whom? Forced by whom to make those bad loans so that they could find ways out of the mess Government forced on them? Remind us again who opposed every attempt BY Bush and McCain to make more regulations and stop the bad loans and bad practices?

Remind me again who forced the banks to spread all of these mortgages throughout the market?

 

[Article 15]

But wait, let's not let the horse outta the barn,, there would have been no rishy mortgages to bundle if the banks had not been intimidated in the first place. In other words politicians and politcal action groups such as ACORN started this avalanche into bandruptcy. Barney Fwank need to sit down and stfu about punishing banks.

But they still did it. They knew better and they still did it.

for fear of retribution by minority advocates, by threats of loss of business, you don't see the harm in that??? that sucks

I'm not talking about giving the loans themselves, I am talking about the banks bundling and spreading them throughout the market. Nobody forced them to do that.

 

[xsited1]

House Financial Services Chairman Barney Frank (D-Mass.) is pressing state and federal authorities to seek criminal and civil penalties on financial actors that helped cause the current crisis.

"Rules don't work if people have no fear of them," Frank said at a press conference Thursday.

He announced a hearing March 20 with Attorney General Eric Holder, bank regulators and the Securities and Exchange Commission as witnesses to discover what their plans are to prosecute irresponsible and in some cases criminal behaviors.

He isn't looking for names, Frank said, but "I do want all the people with enforcement power, state and federal, in that room."


Frank pushes for punishment for crisis - Victoria McGrane - POLITICO.com

Based on the following video, Barney Frank himself will be prosecuted:

[YOUTUBE]LPSDnGMzIdo[/YOUTUBE]

 

[RetiredGySgt]

If it stopped there it wouldn't have been so bad but the banks then bundled those risky mortgages and then spread them about everywhere like cancer.

It made the situation exponentially worse, no?

Allowed by whom? Encouraged by whom? Forced by whom to make those bad loans so that they could find ways out of the mess Government forced on them? Remind us again who opposed every attempt BY Bush and McCain to make more regulations and stop the bad loans and bad practices?

Remind me again who forced the banks to spread all of these mortgages throughout the market?

The same PEOPLE that forced thm to loan the money. Banks are in the business to MAKE money, they were forded to make bad loans and then given a means to offload those bad loans..... Sounds like the bad loans were and remain the problem. Loans forced by Liberals, loans forced by Liberal lawyers threats to sue. Obama being a BIG player in that.

You claim 50 and 50 when the fact is Liberals created the mess and then refused to allow anyone to fix it until to late. Frank was claiming as late as spring 2008 the Housing loan market was solvent and JUST FINE. In fact he blamed Republicans for suggesting otherwise. He and Dodd blocked 3 attempts to regulate the mess.

Banks are in the business to make money, force them to make bad loans and then provide them the means to offload those bad loans and they will do it. It makes sound business sense. The banks are not to blame, the liberals are for forcing the problem on them and then providing them the means to spread the problem around.

 

[WillowTree]

But they still did it. They knew better and they still did it.

for fear of retribution by minority advocates, by threats of loss of business, you don't see the harm in that??? that sucks

I'm not talking about giving the loans themselves, I am talking about the banks bundling and spreading them throughout the market. Nobody forced them to do that.

what would you do if powerful politicians and political groups forced you by intimidation to loan money that would not be paid back? doyathink?

 

[Article 15]

Allowed by whom? Encouraged by whom? Forced by whom to make those bad loans so that they could find ways out of the mess Government forced on them? Remind us again who opposed every attempt BY Bush and McCain to make more regulations and stop the bad loans and bad practices?

Remind me again who forced the banks to spread all of these mortgages throughout the market?

The same PEOPLE that forced thm to loan the money. Banks are in the business to MAKE money, they were forded to make bad loans and then given a means to offload those bad loans..... Sounds like the bad loans were and remain the problem. Loans forced by Liberals, loans forced by Liberal lawyers threats to sue. Obama being a BIG player in that.

You claim 50 and 50 when the fact is Liberals created the mess and then refused to allow anyone to fix it until to late. Frank was claiming as late as spring 2008 the Housing loan market was solvent and JUST FINE. In fact he blamed Republicans for suggesting otherwise. He and Dodd blocked 3 attempts to regulate the mess.

Banks are in the business to make money, force them to make bad loans and then provide them the means to offload those bad loans and they will do it. It makes sound business sense. The banks are not to blame, the liberals are for forcing the problem on them and then providing them the means to spread the problem around.

Then show me the legislation that forced the banks to give those loans. What law specifically was it?

 

[PoliticalChic]

In your opinion, how responsible in percentage terms are the Democrats for the what has happened to the economy in the last 6 months.

The philosophical reason for the meltdown is, simply that Democrat policy put pressure on the financial system to give mortgages where they should not have.

What, you don't want to take my word for it? How about an expert withness, John Alllison, head of BB & T"

* Problem caused by gvt. Policy. The Fed Reserve owns the financial system. Gov. housing policy formed Fanny and Freddie, which would never have existed in the free market.”They were the primary cause.”

“Rescue” Plan from a Healthy Bank’s Perspective « South Carolina Conservative

Barney Frank, with his boyfriend Herb Moses, pushed easy mortages. Now he clouds the issue demanding "those guilty..." and many wil heed his attempt to obfuscate.

 

[Article 15]

for fear of retribution by minority advocates, by threats of loss of business, you don't see the harm in that??? that sucks

I'm not talking about giving the loans themselves, I am talking about the banks bundling and spreading them throughout the market. Nobody forced them to do that.

what would you do if powerful politicians and political groups forced you by intimidation to loan money that would not be paid back? doyathink?

Same to you:

Then show me the legislation that forced the banks to give those loans. What law specifically was it?

 

[RetiredGySgt]

I'm not talking about giving the loans themselves, I am talking about the banks bundling and spreading them throughout the market. Nobody forced them to do that.

what would you do if powerful politicians and political groups forced you by intimidation to loan money that would not be paid back? doyathink?

Same to you:

Then show me the legislation that forced the banks to give those loans. What law specifically was it?

You are amazingly stupid. But then we already knew that. Obama as a lawyer threatened banks with law suits if they did not loan money to people unable to repay the loans. Been posted here several times. In fact as I recall YOU were in the threads discussing stuff to. Now as usual, the leftbot method is to try and obfusicate, try to divert. Pretend things are not how they are.

Prior to Clinton Banks could NOT bundle those loans and dump them. Prior to Clinton Banks were not making bad loans on a National level and regulations of those banks was not watered down to allow such bad loans and the bundling of them to be passed off to others.

Disengenious bullshit by a Liberal, who would of THUNK IT possible.

 

[Article 15]

what would you do if powerful politicians and political groups forced you by intimidation to loan money that would not be paid back? doyathink?

Same to you:

Then show me the legislation that forced the banks to give those loans. What law specifically was it?

You are amazingly stupid. But then we already knew that. Obama as a lawyer threatened banks with law suits if they did not loan money to people unable to repay the loans. Been posted here several times. In fact as I recall YOU were in the threads discussing stuff to. Now as usual, the leftbot method is to try and obfusicate, try to divert. Pretend things are not how they are.

Prior to Clinton Banks could NOT bundle those loans and dump them. Prior to Clinton Banks were not making bad loans on a National level and regulations of those banks was not watered down to allow such bad loans and the bundling of them to be passed off to others.

Disengenious bullshit by a Liberal, who would of THUNK IT possible.

So I'll take that as "there is no such law."

 

[Article 15]

How about this:

Show me one loan that a bank was forced to take on that ended up in default.

 

[Gunny]

What I found more interesting in the article was this:

ya know why? they said they didn't need it in the first place and then "regulators strongly suggested that they take it and lend it" too many government (Barney) strings attached so they are giving it back.. If Bawney has his way all the tarp money will be lent to people who cannot pay it back,, second verse same as the first..

you people are dumb as dirt and will never figure out how to fix the mess you made.. Barney should be the first one punished for is debacle.

Yes, Willow, I understand that you want to blame the Dems for everything. It's what you do.

Which would make her no worse than Frank, or Dems that agree with him. He's obviously witchhunting scapegoats.

 

[editec]

Allowed by whom? Encouraged by whom? Forced by whom to make those bad loans so that they could find ways out of the mess Government forced on them? Remind us again who opposed every attempt BY Bush and McCain to make more regulations and stop the bad loans and bad practices?

Remind me again who forced the banks to spread all of these mortgages throughout the market?

The same PEOPLE that forced thm to loan the money. Banks are in the business to MAKE money, they were forded to make bad loans and then given a means to offload those bad loans..... Sounds like the bad loans were and remain the problem. Loans forced by Liberals, loans forced by Liberal lawyers threats to sue. Obama being a BIG player in that.

You claim 50 and 50 when the fact is Liberals created the mess and then refused to allow anyone to fix it until to late. Frank was claiming as late as spring 2008 the Housing loan market was solvent and JUST FINE. In fact he blamed Republicans for suggesting otherwise. He and Dodd blocked 3 attempts to regulate the mess.

Banks are in the business to make money, force them to make bad loans and then provide them the means to offload those bad loans and they will do it. It makes sound business sense. The banks are not to blame, the liberals are for forcing the problem on them and then providing them the means to spread the problem around.

Bullshit.

Those banks were falling all over themselves to lend money to unqaulified buyers.

Why?

Because they knew they wouldn't be holding the paper.

You people who are buying into this ACORN explaination are either very stupid or choosing to believe a lie.