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.... and nobody went to prison
.... and nobody went to prison
The really fun fact is that nearly everyone involved in creating the sub-prime disaster is now way richer than they were before they destroyed the economy.
.... and nobody went to prison
The really fun fact is that nearly everyone involved in creating the sub-prime disaster is now way richer than they were before they destroyed the economy.
Isn't that the crying fucking shame of what Paulson did with his TARP checkbook?
He didn't even tell them that things had to change - he just covered their losses with our money.
WSJ: TARP - Billions in Loans in Doubt - Christy Romero, special inspector general for the Troubled Asset Relief Program, said 351 small banks with some $15 billion in outstanding TARP loans face a "significant challenge" in raising new funds to repay the government.
Ms. Romero made the comments in her quarterly report to Congress, the first since the Senate approved her appointment in March as special inspector general for the program. She urged the government and regulators to find a way to help banks raise funds to repay the loans. "The status of those banks is one of the major issues facing TARP nearly four years after the financial crisis," the report says.
The report is the latest sign of a yearslong squeeze on smaller banks, those with less than $1 billion in assets. Their numbers and profitability have been declining due in part to regulatory and technological changes that made bigger institutions more profitable.
StoneCastle Partners LLC, a New York firm that has invested in about 800 community banks, estimates that community banks need $90 billion in fresh capital to clean up their balance sheets and acquire other institutions...
...Ms. Romero noted that taxpayers are still owed $118 billion, a figure she said included investments in AIG, GM, Allly Financial and other smaller programs under the TARP umbrella in addition to the outstanding loans to smaller banks. She also counted $4.2 billion Treasury had written off and realized losses of $9.8 billion "that taxpayers will never get back."
The percentage of Americans who own their homes dropped a full percentage point over the past 12 months to 65.4% during the first three months of 2012, according to the latest Census Bureau data. That's the lowest rate since 1997 and down from the peak of 69.2% reached in 2004. "As foreclosures grew over the last six years, many homeowners became renters," said Alex Villacorte, director of analytics for Clear Capital, a real estate valuation company. The rental vacancy rate dropped to 8.8% during the first quarter, down from 9.7% a year earlier and from 9.4% in the last quarter of 2011, according to Census.
The growing demand has put pressure on the rental markets, said Villacorte. In many depressed housing markets, investors have been buying up distressed properties -- foreclosures and short sales -- fixing them up and renting them out. The median asking rent last quarter was $721, up 5.6% from 12 months ago, according to Census. Rents are highest in the Northeast, where the median is $932, followed by the West ($845), the South ($660) and the Midwest ($607).
Meanwhile, median home prices continue to fall. During the first quarter 2012, the median asking sales price for vacant units was $133,700. That's down from $143,700 during the first quarter of 2011, according to Census. Homeownership has fallen for all age groups, races and regions since the housing boom, Census reported. It is lowest in the West, where it has dropped one percentage point over the past 12 months to 59.9%. The Midwest has the highest homeownership rate at 69.5%, down 0.9 point year-over-year; the South is second at 67.5% (down 0.9 point) and the Northeast is third at 62.5 (down 1.4 point).
Source
Feb 27, 1995 TIME: CLINTON PROPOSES BANKING REFORMS - The Clinton Administration proposed sweeping changes in the nation's banking system that would permit commercial banks to sell insurance and underwrite securities. Treasury Secretary Robert Rubin outlined the new proposal, which would allow banks to "affiliate" with Wall Street firms, insurance companies and other financial service providers. It would repeal several federal restrictions, including the Depression-era Glass Steagall Act, which forbids banks from underwriting securities or selling insurance.
September 25, 1998 EIR-Economics: Clinton takes the lead on new financial architecture - Today, I have asked Secretary Robert Rubin and Federal Reserve Board Chairman Alan Greenspan to convene a major meeting of their counterparts within the next 30 days to recommend ways to adapt the international financial architecture to the 21st century, the President said. If you consider todays economic difficulties, disruptions, and plain old deep personal disappointments of now tens of millions of people around the world, it is clear to me that there is now a stark challenge not only to economic freedom but, if unaddressed, a challenge that could stem the rising tide of political liberty as well, the President warned. For most of the last 30 years, the United States and the rest of the world has been preoccupied by inflation, for reasons that all of you here know all too well, Clinton said. But clearly the balance of risks has now shifted, with a full quarter of the worlds population living in countries with declining economic growth or negative economic growth.
October 23, 1999 New York Times: Agreement Reached on Overhaul of U.S. Financial System - Dodd, whose state is home to the nation's largest insurance companies, and Schumer, with strong ties to Wall Street, have long sought legislation to repeal the Glass-Steagall Act. Both men said in interviews Friday that they moved to strike a compromise after it became apparent that the legislation might be killed, as it was last year by Gramm, over the debate about the Community Reinvestment Act.
Gramm had maintained that he did not want anything in the bill that would expand the application of the Community Reinvestment Act because it was, he said, unnecessarily burdensome to banks. He had sought a provision that would exempt thousands of smaller banks from the law. He also wanted a provision that would expose what he has described as the "extortion" committed by community groups against banks by requiring the groups to disclose any special financial deals the groups extract from the banks.
But the White House found that provision unacceptable and had its own ideas about community lending. It wanted the legislation to prevent any bank with an unsatisfactory record of making loans to the disadvantaged from expanding into new areas, like insurance or securities. The White House had insisted that the President would veto any legislation that would scale back minority-lending requirements.
October 24, 1999 New York Times: Deal on Bank Bill Was Helped Along By Midnight Talks - Mr. Dodd was not optimistic about the bill, which had reached the point of do or die. After four days of bitter polemic between Senator Phil Gramm, the Texas Republican who is chairman of the Senate Banking Committee, and Administration officials, the two sides were stuck over highly symbolic and racially tinged community lending rules that threatened to rip the legislation apart.
The discussions had become so poisoned by Thursday night that Mr. Gramm threatened both the top White House economic adviser, Gene Sperling, and the head of the nation's largest financial services company, Citigroup, that he would pull the plug on the bill, something neither the Administration nor Wall Street wanted.
But Mr. Dodd returned to the Capitol and, with a handful of other Democrats from the Banking Committee, slowly managed to turn Mr. Gramm around in an emotional confrontation in a tiny back office crammed with three dozen lawmakers and aides and Administration officials. There, they agreed to split a critical difference -- giving Mr. Gramm a provision he wanted that would make community lending advocates more accountable, and giving the White House what it wanted by making sure banks provided credit in poor communities before entering new lines of business.
At 2 o'clock on Friday morning, a few scant hours after his pessimistic report to the President, Mr. Dodd and other exhausted Democratic lawmakers placed a telephone call to a weary Treasury Secretary Lawrence H. Summers to report that they had clinched a deal with Mr. Gramm to repeal the Glass-Steagall Act of 1933. After eluding its advocates for decades, the agreement to deregulate Wall Street, favored by many of the nation's most powerful business interests, was struck.
October 27, 1999 New York Times: Former Treasury Secretary Joins Leadership Triangle at Citigroup - Robert E. Rubin, arguably the best-known financier of his generation and the recently retired Treasury Secretary, has taken a top position at Citigroup, the nation's largest financial services company...
The appointment came less than a week after the Clinton Administration and Congress agreed on a compromise bill that would overhaul the laws that regulate the financial industry, a measure that removes many of the restrictions preventing banks, securities firms and insurance companies from buying one another or engaging in one another's businesses. Both Mr. Rubin and Citigroup strongly supported the bill, which would greatly benefit the company. Mr. Rubin said he played a role in arranging the final compromise that will probably lead to the repeal of the so-called Glass-Steagall legislation.
Nov 13, 1999 New York Times: Clinton Signs Legislation Overhauling Banking Laws - President Clinton signed into law today a sweeping overhaul of Depression-era banking laws. The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and to sell each other's products.
''This legislation is truly historic,'' President Clinton told a packed audience of lawmakers and top financial regulators. ''We have done right by the American people.''
The bill repeals parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act to level the domestic playing field for United States financial companies and allow them to compete better in the evolving global financial marketplace.
''With this bill,'' Treasury Secretary Lawrence H. Summers said, ''the American financial system takes a major step forward toward the 21st Century -- one that will benefit American consumers, business and the national economy.''
Time: 25 People to Blame for the Financial Crisis - President Clinton's tenure was characterized by economic prosperity and financial deregulation, which in many ways set the stage for the excesses of recent years. Among his biggest strokes of free-wheeling capitalism was the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall Act, a cornerstone of Depression-era regulation. He also signed the Commodity Futures Modernization Act, which exempted credit-default swaps from regulation. In 1995 Clinton loosened housing rules by rewriting the Community Reinvestment Act, which put added pressure on banks to lend in low-income neighborhoods. It is the subject of heated political and scholarly debate whether any of these moves are to blame for our troubles, but they certainly played a role in creating a permissive lending environment.
It also was not just republicans.
The Late Great Albert Einstein said:The definition of insanity is repeating a process with the expectations of a different result.
From Wall Street to 'K' Street in D.C. where the lobbyists live, the actual history of the problem is dumbfounding. This information is 'must have' for every voter.
As they said in the show: If you think this crisis is over,
"The quick version of this terrible story is that Norman and Oriane Rousseau of Newbury Park, California were scammed into a predatory mortgage. But they made their payments anyway, always paying with a cashiers check in person at the same branch. Then one day the bank misapplied their payment and said they still owed the money. This started a long, nasty process that led to the bank evicting the Rousseaus from their home.
Heres the shocker: right at the start the Rousseaus came up with proof that the bank had received the payment and had cashed the check. But the bank continued to claim it had missed the payment, gave the Rousseaus the runaround, started applying fees, and used it as an excuse to foreclose on the house anyway.
The Rousseaus fought back, the bank dragged it out for so long and pulled so many tricks, getting its way every step of the process, until this last Sunday Norman Rousseau finally gave up and shot himself in despair two days before the scheduled eviction, Tuesday, May 15."