Should the Glass Steagall Act be brought back?

[Mad Scientist]

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

Whatever Bank was just Commercial Deposit and not Investment. Yes I know a Deposit Bank CAN crash but they wouldn't have had as much exposure to Toxic Derivatives as Investment banks did.

 

[itfitzme]

It creates a moral hazard, in that people who make the deposits, now don't bother considering the risk level of the institution they are depositing with. As a result, there is an automatic drive to more risky investments, because the customer believes their deposits are safe, regardless of the risk the institution makes.

The moral hazard is already there without the insurance. This is basic common knowledge. You will find it in every introductoryntext on money, finance and banking.

 

[Andylusion]

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

Whatever Bank was just Commercial Deposit and not Investment. Yes I know a Deposit Bank CAN crash but they wouldn't have had as much exposure to Toxic Derivatives as Investment banks did.

Yeah.... name one. That's my point. Very few of the banks (extremely few) that crashed, would have even been affected by Glass Steagall.

That's the whole point.

IndyMac would not have been affected.
Countrywide would not.
Bear Stearns would not.
AIG would not.

If you go down the list, very very few banks if any would have been affected by G-S Act.

That's why I keep asking.... name the banks. Which banks would have been 'saved' by G-S Act? Answer.... thus far... none. The only Big Bank that had a problem, and would have been affected was CitiGroup, which spun off Travelers before the crash, and was holding toxic assets. They still would have crashed. Not owning Travelers had nothing to do with them buying sub-prime MBSs.

 

[itfitzme]

That said, I don't care what the purpose of Glass Steagall was. The rest of the world doesn't have that, and yet the problem originated here in the US. Even to this day, Canada, UK, and most of the rest of the world, has no restriction on banks engaging in Investment, Commercial, Retail, and Insurance. Yet they still have not been the source of a crash.

Seemed like an interesting fact but I don't think it supports your point.


"German-based Bayerische Landesbank (BayernLB) has sued Barclays PLC (BCS - Analyst Report) over the losses that it incurred from investments in risky mortgage backed securities (MBS). BayernLB alleged that Barclays made false representations while selling MBS worth more than $274 million."

It see that British banks are just a bit smarter than US banks. So I'm not so sure that the reasoning that "Johnny didn't do it" make any sense what so ever.

Yeah, 99% of drivers don't run stop signs, get drunk and drive,...

It just doesn't seem to follow that traffic laws should be abandoned.

 

[Andylusion]

That said, I don't care what the purpose of Glass Steagall was. The rest of the world doesn't have that, and yet the problem originated here in the US. Even to this day, Canada, UK, and most of the rest of the world, has no restriction on banks engaging in Investment, Commercial, Retail, and Insurance. Yet they still have not been the source of a crash.

Seemed like an interesting fact but I don't think it supports your point.


"German-based Bayerische Landesbank (BayernLB) has sued Barclays PLC (BCS - Analyst Report) over the losses that it incurred from investments in risky mortgage backed securities (MBS). BayernLB alleged that Barclays made false representations while selling MBS worth more than $274 million."

It see that British banks are just a bit smarter than US banks. So I'm not so sure that the reasoning that "Johnny didn't do it" make any sense what so ever.

Yeah, 99% of drivers don't run stop signs, get drunk and drive,...

It just doesn't seem to follow that traffic laws should be abandoned.

But here's the problem. If the lack of G-S Act caused all this.... Then why didn't the problem START in Europe? Because they NEVER HAD a separation of investment, commercial, and retail, or insurance.

Your argument doesn't make sense.... because they never had that stop sign for 50 years. Why didn't they have just an endless string of non-stop accidents for 50 years?

Or Canada? Or most of the world?

And why did the problem originate in the US?

Most of these Mortgage Backed Securities, even the ones in your link... originated here in the US. Why didn't they originate over there in Europe, when they never had Glass Steagall?

 

[itfitzme]

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

Whatever Bank was just Commercial Deposit and not Investment. Yes I know a Deposit Bank CAN crash but they wouldn't have had as much exposure to Toxic Derivatives as Investment banks did.

Yeah.... name one. That's my point. Very few of the banks (extremely few) that crashed, would have even been affected by Glass Steagall.

That's the whole point.

IndyMac would not have been affected.
Countrywide would not.
Bear Stearns would not.
AIG would not.

If you go down the list, very very few banks if any would have been affected by G-S Act.

That's why I keep asking.... name the banks. Which banks would have been 'saved' by G-S Act? Answer.... thus far... none. The only Big Bank that had a problem, and would have been affected was CitiGroup, which spun off Travelers before the crash, and was holding toxic assets. They still would have crashed. Not owning Travelers had nothing to do with them buying sub-prime MBSs.

I think you point to subsantiated facts. And I appreciate that immensely. But It seems that your point really leadsmtomthe conclusion of extending regulations like G-S more broadly, not less.

The money supply is a public good and it's management really ought not be left open to systematic risk.

Money are fundamentally transferable contracts that promise that bearer can expect to receive goods and services in exchange for goods and services previously provided.

Contract law is the foundation of the free market. There is an expectation and trust that those contracts will be honored. It is why the system works. This extends to the money markets where mortgage backed securities and credit default swaps are just two of the multitude of transferable contracts that are bought and sold.

Your point is well taken. (Not that it was your intent).

It does not follow that because Barclay's didn't tank with no regulation that Leaman Bros shouldn't have been regulated. R does it follow that because the regulations didn't extend beyond other banks and to Leaman Bros that the regulation shouldn't be in place at all.

The more generalized reasoning you are employing may very soundly employeed elsewhere. It isn't necessarily 'faulty logic" in other venues. It just doesn't seem relevant in this case.

It just doesn't follow that because ambulance drivers run red lights that therefor there shouldn't be traffic laws applicable to school busses

 

[itfitzme]

The poll is funny. Surely you realize that USMB is not a random sample and that our collective opinion isn't really relevant?

Polls on the internet aren't a random sampling. They are obviously biased by nature. It is exactly the problem that was learned in the 1948 election between Truman and Dewey.

 

[Contumacious]

When did Countrywide become a subsidiary to BofA?
Before or after the Crash?
What exactly do you imagine Fannie's and Freddie's role is compared to "all the independent mortgage lenders?"

Roles are different because Fannie and Freddie are huge. Of course the reason Fannie and Freddie are huge, is because they are backed by the government.

Countrywide was a subsidary before the crash. It didn't prevent them from crashing. Nor would some bank owning aluminum.

The roles are different because Fannie and Freddie purchase home loans made by private firms and package those loans into mortgage-backed securities. Funny how you think that means independent mortgage lenders compete against Fannie and Freddie.

NONSENSE

"Fannie and Freddie


.... the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans."

.

 

[Procrustes Stretched]

Bump...

snore ... zzzzzzz .. didn't you hear...it's all Barney Frank's fault

 

[Procrustes Stretched]

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis, which is linked to the financial crisis of 2007–2009.[49] He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans, with the main exception being a bill with Republican Mike Oxley that died because of opposition from President Bush.[49] The 2005 bill included Frank objectives, which were to impose tighter regulation of Fannie and Freddie and new funds for rental housing. Frank and Mike Oxley achieved broad bipartisan support for the bill in the Financial Services Committee, and it passed the House. But the Senate never voted on the measure, in part because President Bush was likely to veto it. "If it had passed, that would have been one of the ways we could have reined in the bowling ball going downhill called housing," Oxley told Frank. In an op-ed piece in the Wall Street Journal, Lawrence B. Lindsey, a former economic adviser to President George W. Bush, wrote that Frank "is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters."[7] Once control shifted to the Democrats, Frank was able to help guide both the Federal Housing Reform Act (H.R. 1427) and the Mortgage Reform and Anti-Predatory Lending Act (H.R. 3915) to passage in 2007.[49] Frank also said that the Republican-led Gramm–Leach–Bliley Act of 1999, which repealed part of the Glass–Steagall Act of 1933 and removed the wall between commercial and investment banks, contributed to the financial meltdown.[49] Frank stated further that "during twelve years of Republican rule no reform was adopted regarding Fannie Mae and Freddie Mac. In 2007, a few months after I became the Chairman, the House passed a strong reform bill; we sought to get the [Bush] administration's approval to include it in the economic stimulus legislation in January 2008; and finally got it passed and onto President Bush's desk in July 2008. Moreover, "we were able to adopt it in nineteen months, and we could have done it much quicker if the [Bush] administration had cooperated."[50] Barney Frank - Wikipedia, the free encyclopedia

Roles are different because Fannie and Freddie are huge. Of course the reason Fannie and Freddie are huge, is because they are backed by the government.

Countrywide was a subsidary before the crash. It didn't prevent them from crashing. Nor would some bank owning aluminum.

The roles are different because Fannie and Freddie purchase home loans made by private firms and package those loans into mortgage-backed securities. Funny how you think that means independent mortgage lenders compete against Fannie and Freddie.

NONSENSE

"Fannie and Freddie


.... the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans."

.

So was Barney Frank to blame for our woes? There are two lines of argument here, and neither is all that compelling. The first contention is that Frank failed to exercise diligent oversight of Fannie Mae and Freddie Mac as the housing bubble swelled. There’s something to this, though it’s worth noting that Frank was in the congressional minority for most of the period in question. The second argument is that Frank and other Democrats — by promoting policies to boost affordable housing — somehow caused the subprime mess and financial collapse. That argument is especially hard to square with the facts.

First, it’s true that Frank was hardly Fannie and Freddie’s biggest critic. Nor did he spot the housing bubble. Back in 2003, as the Examiner’s Philip Klein points out, Frank said that the government-sponsored entities were not in any sort of crisis. “The more people exaggerate these problems,” Frank told the New York Times, “the more pressure there is on these companies, the less we will see in terms of affordable housing.” Not the most prescient of comments. (Note, however, that in 2003, Fannie and Freddie weren’t yet heavily involved in the mortgage-backed security market. They were actually losing market share to private banks, as the chart on right from researchers at the University of North Carolina shows.) -- Barney Frank didn?t cause the housing crisis - The Washington Post

 

[Contumacious]

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats,l]

A 2009 response would have been too late. But your assertion is pure bullshit.

Save Fannie Mae Coalition

A partnership of businesses, civil rights organizations and trade associations are launching United for American Homeownership, a coalition dedicated to supporting communities by preserving and strengthening Fannie Mae and Freddie Mac.

.

 

[Andylusion]

Whatever Bank was just Commercial Deposit and not Investment. Yes I know a Deposit Bank CAN crash but they wouldn't have had as much exposure to Toxic Derivatives as Investment banks did.

Yeah.... name one. That's my point. Very few of the banks (extremely few) that crashed, would have even been affected by Glass Steagall.

That's the whole point.

IndyMac would not have been affected.
Countrywide would not.
Bear Stearns would not.
AIG would not.

If you go down the list, very very few banks if any would have been affected by G-S Act.

That's why I keep asking.... name the banks. Which banks would have been 'saved' by G-S Act? Answer.... thus far... none. The only Big Bank that had a problem, and would have been affected was CitiGroup, which spun off Travelers before the crash, and was holding toxic assets. They still would have crashed. Not owning Travelers had nothing to do with them buying sub-prime MBSs.

I think you point to subsantiated facts. And I appreciate that immensely. But It seems that your point really leadsmtomthe conclusion of extending regulations like G-S more broadly, not less.

The money supply is a public good and it's management really ought not be left open to systematic risk.

Money are fundamentally transferable contracts that promise that bearer can expect to receive goods and services in exchange for goods and services previously provided.

Contract law is the foundation of the free market. There is an expectation and trust that those contracts will be honored. It is why the system works. This extends to the money markets where mortgage backed securities and credit default swaps are just two of the multitude of transferable contracts that are bought and sold.

Your point is well taken. (Not that it was your intent).

It does not follow that because Barclay's didn't tank with no regulation that Leaman Bros shouldn't have been regulated. R does it follow that because the regulations didn't extend beyond other banks and to Leaman Bros that the regulation shouldn't be in place at all.

The more generalized reasoning you are employing may very soundly employeed elsewhere. It isn't necessarily 'faulty logic" in other venues. It just doesn't seem relevant in this case.

It just doesn't follow that because ambulance drivers run red lights that therefor there shouldn't be traffic laws applicable to school busses

First off, Lehman Brothers was regulated. There is no such thing as a bank that was 'not regulated'.

But second, you missed the fact that Glass Steagall (which is the topic of this thread), would have done NOTHING to Lehman Brothers.

Lehman Brothers was an investment bank. It did not do Commercial. It did not do Retail. It did not do insurance.

No amount of Glass Steagall would have done ANYTHING to Lehman Brothers either way.

Again, you are looking at a system over in Europe that does not have the stop light, a stop sign, or even a yeild. There is no Glass Steagall in Europe, Canada, or elsewhere. There is no separation of Retail, Investment, Commercial, or Insurance throughout most of the world.

Yet the problem started HERE.

In order for you to claim that the reason we had a crash, was because we removed this specific stop sign, you have to explain why there were no crashes of this type in other countries for the last 70 years, where they never had this stop sign.

It does not follow that "this repeal of X the cause of our problems" when for 70 years, no other country had this problem, and they never had X.

That logic doesn't make sense.

 

[TrainTime]

Lehman Brothers was an investment bank. It did not do Commercial. It did not do Retail. It did not do insurance.

No amount of Glass Steagall would have done ANYTHING to Lehman Brothers either way.

There you go again! Lehman (who bilked ME out of $130K) isn't the issue here. It's Chase, BofA, and Wells Fargo (to a lesser extent) who got into the derivatives game after GS was repealed. They had no idea they'd end up like they did.....pawning off crap mortgages all over the world. To this day, you better do one HELL of a title search before you buy a distressed property because nobody knows who really owns a lot of them....you can be in for a BIG SURPRISE down the road when you get a letter stating the property you bought didn't belong to the party who sold it to you.

 

[Dad2three]

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.

We're members at the Ayn Rand Center, covering economics and liberty.


There is zero evidence this change unleashed the financial crisis. If you tally the institutions that ran into severe problems in 2008-09, the list includes Bear Stearns, Lehman Brothers, Merrill Lynch, AIG, and Fannie Mae and Freddie Mac, none of which would have come under Glass-Steagall’s restrictions. Even President Obama has recently acknowledged that “there is not evidence that having Glass-Steagall in place would somehow change the dynamic.”

As for the FDIC-insured commercial banks that ran into trouble, the record is also clear: what got them into trouble were not activities restricted by Glass-Steagall. Their problems arose from investments in residential mortgages and residential mortgage-backed securities—investments they had always been free to engage in.

GLB didn’t cause the financial crisis—and, when push comes to shove, the regulatory evangelists must admit as much


Why The Glass-Steagall Myth Persists - Forbes


REGULATOR FAILURE BY BUSH, LIKE REAGAN'S
S&L CRISIS

 

[Missouri_Mike]

I voted no because it's like beating up the bench warmer wide receiver because the star QB is fucking your sister.

The FED is the problem and always has been. Get them under control and our problems cease with these booms and busts.

 

[Dad2three]

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.

You are correct, not a regulation failure, but a REGULATOR failure called Dubya




Glass-Steagall Is Mostly A Red Herring


But wasn’t the repeal of Glass-Steagall the key to the emergence of these gigantic banks with huge political influence? Certainly it helps. If you’re a bank, plus some other large enterprise, then you have more clout than a mere bank would have. But the bank-qua-bank can’t get any bigger by merging with something that’s not a bank. What really did keep banks small was that when the 1927 McFadden Act let nationally charted banks get in the branching game, it prohibited them from operating branches in more than one state. What’s more, states were allowed to put tighter restrictions than that on branching. The “one state only” rule is totally arbitrary. There’s no principled reason you should be allowed to have branches in Manhattan and Buffalo but not Manhattan and Newark, or that it’s okay to work with a local branch of a very large bank in Yuba City but not in Utah. But it does limit the overall size of banks pretty severely. California, Texas, and New York banks would be kinda big and banks in most of the country would be quite small. And the fact that the rule is so plainly arbitrary makes it relatively easy to enforce. Since it simply piggybacks on existing lines rather than claiming to be some fine tuned optimization, it’s relatively difficult to game the system without people noticing.

Federal regulators started to relax this rule in the 1980s and it was firmly repealed in the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. It seems to me that if you want to look at a piece of 1990s financial deregulation that set off waves of bank consolidation, this is where you want to look. But was it a good idea?



Glass-Steagall Is Mostly A Red Herring | ThinkProgress

 

[Dad2three]

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...

Who is 'they'?

It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it

Lest We Forget: Why We Had A Financial Crisis - Forbes

 

[Dad2three]

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."

.

It is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it

Lest We Forget: Why We Had A Financial Crisis - Forbes


The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy.


"I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms," said Greenspan.


Greenspan - I was wrong about the economy. Sort of | Business | The Guardian

 

[TrainTime]

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis, which is linked to the financial crisis of 2007–2009.[49] He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans

BULLSHIT! The Bush Administration made repeated attempts to look at Fanny/Freddie's books but were denied and called "racists" by Maxine Waters with Barney Fag and Dodd cackling in the background. F/F were so corrupt they accepted FOOD STAMPS as income. BTW...Jamie Gorelick, Reno's squeeze, and the woman who built the wall between the CIA and FBI leading us to 9/11, went on to loot Fannie out of several million dollars in bonuses. That's who caused the meltdown along, of course, with the major commercial banks who dove into ticking bomb derivatives rather than face thousands of CRA foreclosers.

 

[Dad2three]

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.

Why Prosecutors Don't Go After Wall Street

BUSH GAVE A GET OUT OF JAIL FREE CARD SUMMER 2008

Why Prosecutors Don't Go After Wall Street : NPR

“When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions,”...“If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”

http://www.nytimes.com/2011/04/14/business/14prosecute.html?pagewanted=all

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence.
'
William K. Black: The Two Documents Everyone Should Read to Better Understand the Crisis

Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources.

FBI saw threat of loan crisis - Los Angeles Times

Shockingly, the FBI clearly makes the case for the need to combat mortgage fraud in 2005, the height of the housing crisis:

Financial Crimes Report to the Public 2005

FBI ? Financial Crimes Report 2005

The Bush Rubber Stamp Congress ignored the obvious and extremely detailed and well reported crime spree by the FBI.

THE BUSH ADMINISTRATION and CONGRESS stripped the White Collar Crime divisions of money and manpower.

http://www.nytimes.com/2008/10/19/washington/19fbi.html?pagewanted=all

DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!



Later in 2004 Dubya allowed the leverage rules to go from 12-1 to 35-1 PLUS which flooded the market with cheap money!