Should the Glass Steagall Act be brought back?

[eagle1462010]

Should the Glass Steagall Act be brought back?

Specifically, this...............

The Glass-Steagall Act Explained

2. Separation of Commercial and Investment Banking

As important as the FDIC’s creation was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Five provisions of the Banking Act pertained to this separation:

Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
Section 5(c): Glass-Steagall would also apply to state-chartered banks.
Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
Section 21: If a bank did trade securities, it could not take deposits.
Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System) were barred from holding advisory positions in companies whose primary purpose was trading securities.

 

[eagle1462010]

Okay, how do I change the question in the poll?????????? Accidentally hit enter before changing my paste.........a little help here.

 

[deltex1]

Yes. It will keep the Jews out of prison.

Just kidding, Rabbi...

 

[eagle1462010]

I guess everyone will figure out I hosed the poll question. I voted yes of course.

 

[eagle1462010]

Bump...

 

[Billo_Really]

Abso-fucking-lutely!

 

[eagle1462010]

bump

 

[deltex1]

In Massatwoshits they call this thread a stumpah....

 

[Andylusion]

Should the Glass Steagall Act be brought back?

Specifically, this...............

The Glass-Steagall Act Explained

2. Separation of Commercial and Investment Banking

As important as the FDIC’s creation was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Five provisions of the Banking Act pertained to this separation:

Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
Section 5(c): Glass-Steagall would also apply to state-chartered banks.
Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
Section 21: If a bank did trade securities, it could not take deposits.
Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System) were barred from holding advisory positions in companies whose primary purpose was trading securities.

I guess everyone will figure out I hosed the poll question. I voted yes of course.

Abso-fucking-lutely!

I of course am the one vote against bringing back the Glass-Steagal Act.

I have asked this question hundreds of times, and I never get an answer.

Name ONE bank that if Glass-Steagall was still enforced, would have not crashed? And on what basis would you make the claim?

Countrywide? Nope.
IndyMac? Nope.
Bear Stearns? Nope.
Wachovia? Nope.
AIG? Nope.
Washington Mutual? Nope.

The vast vast majority of all the banks that crashed... none of them would have been affected by Glass-Steagall in any way.

So now, if you have a reason to bring back Glas Steagall, what is it?

And don't tell me it is to prevent another sub-prime melt down, because if so, then I want the name of the banks (not one), bank(S) that would have been 'saved' under Glass Steagall, and I want a specific provision of Glass Steagall, and how it applied to those banks, that would have stopped them from crash.

If you can provide me that evidence, I'll consider it.

 

[Mac1958]

.

Yes.

Of course.

Obviously.

This week, please.

.

 

[GWV5903]

I doubt it will have the effect you want...

A new bill would be needed to fill the holes in Glass-Steagall at this time...

Somehow someway they will create another screwed up loan program for housing...

 

[Contumacious]

Should the Glass Steagall Act be brought back?

.

FUCK NO.

Shattering the Glass-Steagall myth

Facts such as that Bear Stearns, Lehman Brothers and Merrill Lynch — three institutions at the heart of the crisis — were pure investment banks that had never crossed the old line into commercial banking. The same goes for Goldman Sachs, another favorite villain of the left.

The infamous AIG? An insurance firm. New Century Financial? A real estate investment trust. No Glass-Steagall there.

Two of the biggest banks that went under, Wachovia and Washington Mutual, got into trouble the old-fashioned way – largely by making risky loans to homeowners. Bank of America nearly met the same fate, not because it had bought an investment bank but because it had bought Countrywide Financial, a vanilla-variety mortgage lender."

.

 

[occupied]

What use is a law that was not even being strictly enforced while it was in effect? I mourn for the days when the government acknowledged that bankers are criminal scum and need to be policed.

 

[TrainTime]

I vote YES. I got wiped out in the 2008 meltdown. Took me about 3 years to get over hunting for my broker with a tire iron...never found him. What happened with the mortgage derivatives could happen again and probably will. Take a look at our economy before Slime Willy got ahold of it.....after NAFTA and WTO, we offshored our industry and left ourselves HOUSING as it's replacement. HOUSING!

Sure, building homes involves many types of jobs and materials, but the bottom line is that requires an ever-increasing price of homes to sustain itself. And housing went through the roof....30% a YEAR here in Phoenix....everybody was doing a little make-over and flipping it. It got so ridiculous you couldn't take any equity out for your next house because you had to pay for what got flipped to you. Everybody was making a fake killing until BOOM, the bubble burst.

When you have financial houses trading on a hundred years of success like Bear Stearns and Lehmann, getting into ponzi schemes by packaging mortgages and dumping them on patsies, with AIG "insuring" the whole sheebang, you have what happened in 2008. Too big to fail? Bullshit. If Barry had followed through and sent the ringleaders into prison, there would be little need for new legislation. He chickened out (doh! what hasn't he backed down from?) and they left their meeting in the WH with him snickering that they'd pulled off the biggest con in the history of earth.

 

[Machaut]

I voted no.

We must ask ourselves, what was the purpose of Glass-Steagall?

Should the Glass Steagall Act be brought back?

As important as the FDIC’s creation was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits.

Assuming the purpose was to prevent banks from taking risks with their customers' money that negatively impacted the customer and/or relied on public funds to cover losses in whole or in part, then it was a well-intentioned law. However, it was either watered down by comprise or deliberately poisoned by special interests; either way, it was diluted to the point of ineffectiveness, as pointed out by other posters.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Assuming that Glass-Steagall was solely for forcing banks to fuel the profit of only corporations (tangentially, the fact that the author of your article uses the broad brush of "corporations" without any kind of details makes me think this might not be the most informed, unbiased source out there), then it can be determined the purpose of the act was to institute further government control over the economy by telling certain segments of it that they cannot invest in X, and must invest in Y instead.

In either case--the act being watered down and useless, or it being written with the express intent of a cross-breed of communism and cronyism--the Glass-Steagall Act was bad, and should not be brought back.

Even if you believe the banking industry should be regulated, Glass-Steagall was not a good way of doing so.

 

[TrainTime]

Incredible! "If you believe banking should be regulated"? Take a look at what happened and remind yourself that the average Joe walking into a bank can't get a loan with anything under an 800 credit score. The money is in the stock market....Wall Street not Main Street. The bastards are paying what, ONE percent on savings accounts? The bailout money they got from US, went to buy up smaller, failing banks instead of helping small businesses in trouble. Only somebody who is or was involved in that rotten scheme would say there shouldn't be a WALL between commercial and investment banking. UNreal.

 

[Andylusion]

And still even now, with several more posts, not one single person can point to a single bank, or bank(S) that would have been saved by the Glass Steagall act.

And the whole idea is ridiculous.

the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits.

Fail? What do you think banks do with deposits? Every action a bank engages in has speculative risk.

If you loan money to a business, and the economy tanks, and that business fails, you lose the money.

If you loan money an individual, and the economy tanks, and that individual loses his job, you lose money.

If you loan money to another bank, and the economy tanks, and that bank goes under, you lose the money.

What do you think any regulation would do to prevent banks from taking a risk with the money? Bury it in the yard behind the bankers house?

The entire concept is just ridiculous.

Glass Steagall would not fix anything. It certainly didn't prevent the S&L crash in the 80s, or the housing crash in the 70s. There is absolutely no evidence whatsoever to suggest it caused, or would have hindered the Sub-prime melt down in 2008.

People claim to be so scientific in their policies, and yet this has absolutely nothing to back it.

 

[TrainTime]

And still even now, with several more posts, not one single person can point to a single bank, or bank(S) that would have been saved by the Glass Steagall act.

And the whole idea is ridiculous.

the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits.

Fail? What do you think banks do with deposits? Every action a bank engages in has speculative risk.

If you loan money to a business, and the economy tanks, and that business fails, you lose the money.

If you loan money an individual, and the economy tanks, and that individual loses his job, you lose money.

If you loan money to another bank, and the economy tanks, and that bank goes under, you lose the money.

What do you think any regulation would do to prevent banks from taking a risk with the money? Bury it in the yard behind the bankers house?

The entire concept is just ridiculous.

Glass Steagall would not fix anything. It certainly didn't prevent the S&L crash in the 80s, or the housing crash in the 70s. There is absolutely no evidence whatsoever to suggest it caused, or would have hindered the Sub-prime melt down in 2008.

People claim to be so scientific in their policies, and yet this has absolutely nothing to back it.

WTF? Do you even know the difference between commercial and investment banks or what Glass Steagall was about? Commercial banks make their money on LOANS, not investments. That's the difference. And the same economic rules applied in both 1933 and 1996 or whenever Clinturd killed off the wall of separation (and built one between the CIA and FBI)....GAWD I wish we'd hang that cocksucker. Anyway, the 2008 meltdown was the creation of a generation of greed-heads that acted like kids in a candy store without any rules and FREE MONEY. If their boards weren't aware of what was happening, they should be indicted for malfeasance. But they did and should have been indicted under RICO statutes.

 

[Billo_Really]

I of course am the one vote against bringing back the Glass-Steagal Act.

I have asked this question hundreds of times, and I never get an answer.

Name ONE bank that if Glass-Steagall was still enforced, would have not crashed? And on what basis would you make the claim?

Countrywide? Nope.
IndyMac? Nope.
Bear Stearns? Nope.
Wachovia? Nope.
AIG? Nope.
Washington Mutual? Nope.

The vast vast majority of all the banks that crashed... none of them would have been affected by Glass-Steagall in any way.

So now, if you have a reason to bring back Glas Steagall, what is it?

And don't tell me it is to prevent another sub-prime melt down, because if so, then I want the name of the banks (not one), bank(S) that would have been 'saved' under Glass Steagall, and I want a specific provision of Glass Steagall, and how it applied to those banks, that would have stopped them from crash.

If you can provide me that evidence, I'll consider it.

I've got a better question for you, Andy...

Glass-Steagall was put in after the '29 crash to prevent another one. It prohibited investment banks and savings banks from doing business under the same roof and outlawed derrivitives. For over 50 years, not a single melt-down occurred in our economy.

Then why, not long after that fucking piece of shit Phil Gramm put his garbage bill through Congress and Slick Willie signed it, effectively repealing Glass-Steagall, we had another meltdown?

Care to answer that, Andy?

 

[Mac1958]

.

The conflicts of interest that sprouted and manifested after G/S was repealed planted distortions throughout the banking, and then economic, systems.

And, even after Dodd/Frank, most of those distortions still exist.

They merely require more paperwork.

.