Since 2009, 88 Percent Of Income Growth Went To Corporate Profits, 1% Went to Wages

[Quantum Windbag]

or" i live in a bubble, and nothing is going to change my opinion"

Yeah we are used to this ignorance.

You are trying to defend the findings of a report that does not even exist, and Trajan is the one that is not willing to change his mind?



How?

um he is the one who said he challenge the "data" because it doesnt matter to him. Which means he has his set opinion on things and nothing is going to change his mind. This goes beyond the OP and if there is data or not.

Stop being so limited.

That depends on what he was saying, doesn't it? If I was not so interested in numbers the data would not matter to me either, because it doesn't change the real world fact that corporate profit helps the economy because it is paid out in dividends, helps fund the government through taxes, and corporations will always have a higher profit rate than the workers.

The fact that you think the numbers actually matter no matter what Trajan is saying, even though they do not actually exist, proves I am not the one that is limited.

 

[Londoner]

So you agree that you have not posted a single piece of evidence that George W Bush deregulated the mortgage industry. Declining standards have nothing to do with deregulation. You understand that, right?

You need to research Bush's ownership society. Watch this video. He lays out a comprehensive plan to put minorities in homes. One of his big achievements was lowering the down payment required by lenders. He spells out his goals for low income home ownership very clearly. Listen to his plans for Fannie/Freddie. This is unambiguous. (Rabbi: housing expansion was one of the ways America came out of the great depression (in addition to war manufacturing). America's great suburban postwar expansion contributed to an unprecedented economic boom - we built the greatest patchwork of suburbs in the world. Presidents from both parties have used housing to stimulate the economy. Bush went too far by tapping non-creditworthy borrowers. Watch the video: it is very clear what happened)

[ame=http://www.youtube.com/watch?v=kNqQx7sjoS8]Home Ownership and President Bush - YouTube[/ame]

Regarding regulations. I agree with you. I don't think this was a simple case of deregulation. I think the regulatory system had long been captured before Bush came to office. There was no need to deregulate because regulations were not enforced in the first place.

FYI: Clinton, Rubin, and Greenspan were chiefly responsible for removing FDR's Glass-Stegal act, which built a Chinese wall between investment and commercial banks, thus making it easier for large financial frankensteins to gamble with America's savings. The nation paid a dear price for removing FDR's regulations. Let's face it: America became seduced by the Reagan war on government regulation. Clinton was a centrist Democrat who believed deeply in free markets and the Reagan deregulatory approach. He is as much to blame as anybody.

Regarding the S&Ls. It seems like we got the worst of both worlds. Originally, they were too tightly regulated in both the services and rates they could offer. This lead to their failure. Then Reagan came in and should have shut them down. Instead, he freed them to make overly-specualtive investments, mostly in commercial real estate. This turned into a disaster. Regardless, saying that it was a simple matter of regulation/deregulation doesn't quite capture it, IMHO.

 

[Intense]

So you agree that you have not posted a single piece of evidence that George W Bush deregulated the mortgage industry. Declining standards have nothing to do with deregulation. You understand that, right?

You need to research Bush's ownership society. Watch this video. He lays out a comprehensive plan to put minorities in homes. One of his big achievements was lowering the down payment required by lenders. He spells out his goals for low income home ownership very clearly. Listen to his plans for Fannie/Freddie. This is unambiguous. (Rabbi: housing expansion was one of the ways America came out of the great depression (in addition to war manufacturing). America's great suburban postwar expansion contributed to an unprecedented economic boom - we built the greatest patchwork of suburbs in the world. Presidents from both parties have used housing to stimulate the economy. Bush went too far by tapping non-creditworthy borrowers. Watch the video: it is very clear what happened)

[ame=http://www.youtube.com/watch?v=kNqQx7sjoS8]Home Ownership and President Bush - YouTube[/ame]

Regarding regulations. I agree with you. I don't think this was a case of deregulation. I think the regulatory system had long been captured before Bush came to office. There was no need to deregulate because regulations were not enforced in the first place.

FYI: Clinton, Rubin, and Greenspan were chiefly responsible for removing FDR's Glass-Stegal act, which built a Chinese wall between investment and commercial banks, thus making it easier for large financial frankensteins to gamble with America's savings. The nation paid a dear price for removing FDR's regulations. Let's face it: America became seduced by the Reagan war on government regulation. Clinton was a centrist Democrat who believed deeply in free markets and the Reagan deregulatory approach. He is as much to blame as anybody.

Regarding the S&Ls. It seems like we got the worst of both worlds. Originally, they were too tightly regulated in the services and rates they could offer. This lead to their failure. Then Reagan came in and should have shut them down. Instead, he freed them to make overly-specualtive investments, mostly in commercial real estate. This turned into a disaster. Regardless, saying that it was a simple matter of regulation/deregulation doesn't quite capture it.

I really don't see too much of the problem there. It is one thing to make Home Ownership possible for those committed to the idea, and another to artificially increase property value creating a bubble. When you find yourself invested in a home worth less than what you owe because the bubble burst, because the bluff was called, especially if you put little or no money down in the first place, sometimes the best thing is to just walk.

Agreed, the No Money Down, was a bad way to go, so was over inflated pricing.

 

[Raoul_Duke]

HAHAHAHA!!!!!

You think we have LESS Regulation now?

Sarbanes Oxley
Dodd Frank
ObamaCare
and the reams of regulations being made up by the DOE, FDA, EPA etc. in an endless quest to regulate the most mundane aspects of our lives

When the full weight of the federal government is applied to fine a family $90,000 for making $200 of profit selling bunny rabbits, there is Far Too Much Government are far too little liberty.

Remember how Enron used newly deregulated energy markets to gouge their customers and dodgy accounting to blow up their own compnay? Remember Adelphia, Worldcom, Tyco and other accounting scandals? Sarbanes-Oxley was introduced to try and re-regulate what had previously been deregulated and stop more Enrons from happening. Same goes for Dodd-Frank, which unfortunately is basically a waste of time and is basically endless loopholes. But the clear trend over the past thirty years is one of deregulation, especially in the financial industry, and this has led to the biggest economic meltdown since the 1920s, the last time we had such lax financial regulation.

No. What I remember is Enron using newly created energy markets. They did ask for deregulation in the financial reporting laws. I have no idea why, but I do know it had nothing to do with deregulating the energy market.

The California electricity crisis, also known as the Western U.S. Energy Crisis of 2000 and 2001 was a situation in which California had a shortage of electricity caused by market manipulations and illegal shutdowns of pipelines by Texas energy consortiums. The state suffered from multiple large-scale blackouts, one of the state's largest energy companies collapsed, and the economic fall-out greatly harmed Governor Gray Davis's standing.

Drought and delays in approval of new power plants[4] and market manipulation decreased supply. This caused 800% increase in wholesale prices from April 2000 to December 2000.[5] In addition, rolling blackouts adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers.

California had an installed generating capacity of 45GW, but at the time of the blackouts demand was 28GW. A demand supply gap was created by energy companies, mainly Enron, to create an artificial shortage. Energy traders took power plants offline for maintenance in days of peak demand to increase the price.[6][7] Traders were thus able to sell power at premium prices, sometimes up to a factor of 20 times its normal value. Because the state Government had a cap on retail electricity charges, this market manipulation squeezed the industry's revenue margins, causing the bankruptcy of Pacific Gas and Electric Company (PG&E) and near bankruptcy of Southern California Edison in early 2001.[8]

The financial crisis was possible because of partial deregulation legislation instituted in 1996 by Governor Pete Wilson. Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.[9] The crisis cost $40 to $45 billion.

California electricity crisis - Wikipedia, the free encyclopedia


Ken Lay has been dead almost two years and Jeffrey Skilling is several years into his 24 year prison sentence, but one legacy of the Enron era lives on.

It’s the "Enron loophole," which exempts energy speculators who make trades electronically from US regulation. Some argue that the unregulated energy speculation, codified in 2000, can account for $20 to $25 in the jump in oil prices.

But now, 8 years after energy traders were able to push legislation exempting their electronic trades of energy futures from US regulation, a measure in the Farm Bill aims to close the loophole and subject futures trades made electronically inside the United States to US law.

“This bill is really our best bet to deter unscrupulous traders from manipulating energy prices and engaging in excessive speculation. This has been a long, hard road – and this is a major legislative victory," Said California Democrat Sen. Dianne Feinstein after the Senate passed the underlying Farm Bill on a broad, bipartisan basis.

Specifically, according to her office, the bill would "require electronic energy traders to provide an audit trail and record-keeping, monitor for market manipulation, and increase financial penalties for cases of market manipulation and excessive speculation."

Congress Seeks to Close the ‘Enron Loophole’ - ABC News

Here are examples of the kind of unscupulous trading and market manipulation. From evidence made public during the Enron trials :


One trader is heard on tapes obtained by CBS News saying, "Just cut 'em off. They're so f----d. They should just bring back f-----g horses and carriages, f-----g lamps, f-----g kerosene lamps."



and my favourite :

Trader 1: “They’re fucking taking all the money back from you guys? All the money you guys stole from those poor grandmothers in California?”
Trader 2: "Yeah, Grandma Millie man. But she’s the one who couldn’t figure out how to fucking vote on the butterfly ballot."
[Laughing from both sides]
Trader 1: "Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her ass for fucking $250 a megawatt hour."
[Harder Laughing]

Enron Tapes Anger Lawmakers - CBS News

 

[Raoul_Duke]

There were periods in our history where that was the case. Try looking at James Grant's history of banking in America.
Later on they did, but the S&Ls were primarily the mortgage companies. They all went belly up in the crisis of about 1990, well before George W Bush ever became president.

I'm talking specifically about the events of the last decade so the stuff about S and ls irrelevant..

Why did S and ls go belly up?

Also, too. I've posted a whole bunch of stuff showing that mortgage lending standards declined dramatically during the Bush years and articles by Wall Street fund managers and state Attorney generals that show that the Bush administration either chose not to enforce existing regulations or literally took a chainsaw to them, or even prevented individual states from enforcing various regulations that would have prevented a lot of the bad lending. I've also asked you to reply to these posts. I don't want to cut and paste all the actual stuff again but how about clicking the quote button on these particular posts and replying to what I've actually posted?

Here they are again. Just click the quote button and reply to the stuff in the post :

http://www.usmessageboard.com/polit...te-profits-1-went-to-wages-4.html#post4154905


http://www.usmessageboard.com/polit...te-profits-1-went-to-wages-9.html#post4156919

S&Ls went under because they could not sell their loans, as there was no standardized underwriting, making equal comparisons difficult.

So you agree that you have not posted a single piece of evidence that George W Bush deregulated the mortgage industry. Declining standards have nothing to do with deregulation. You understand that, right?

I've posted stuff from a variety of sources including a Wall Street fund manager, the new York Attorney general, and George W Bush that clearly show that Bush either deregulated, didn't enforce regulations that were already on the books or actively prevented state authorities taking legal action to enforce regulations that were still on the books. I can completely understand why you don't want to reply to the two posts I linked to. There's not really a lot you can say, is there?

Reagan deregulating the Savings and loans didn't have anything to do with them going bust?

 

[Raoul_Duke]

So you agree that you have not posted a single piece of evidence that George W Bush deregulated the mortgage industry. Declining standards have nothing to do with deregulation. You understand that, right?

You need to research Bush's ownership society. Watch this video. He lays out a comprehensive plan to put minorities in homes. One of his big achievements was lowering the down payment required by lenders. He spells out his goals for low income home ownership very clearly. Listen to his plans for Fannie/Freddie. This is unambiguous. (Rabbi: housing expansion was one of the ways America came out of the great depression (in addition to war manufacturing). America's great suburban postwar expansion contributed to an unprecedented economic boom - we built the greatest patchwork of suburbs in the world. Presidents from both parties have used housing to stimulate the economy. Bush went too far by tapping non-creditworthy borrowers. Watch the video: it is very clear what happened)

[ame=http://www.youtube.com/watch?v=kNqQx7sjoS8]Home Ownership and President Bush - YouTube[/ame]

Regarding regulations. I agree with you. I don't think this was a simple case of deregulation. I think the regulatory system had long been captured before Bush came to office. There was no need to deregulate because regulations were not enforced in the first place.

FYI: Clinton, Rubin, and Greenspan were chiefly responsible for removing FDR's Glass-Stegal act, which built a Chinese wall between investment and commercial banks, thus making it easier for large financial frankensteins to gamble with America's savings. The nation paid a dear price for removing FDR's regulations. Let's face it: America became seduced by the Reagan war on government regulation. Clinton was a centrist Democrat who believed deeply in free markets and the Reagan deregulatory approach. He is as much to blame as anybody.

Regarding the S&Ls. It seems like we got the worst of both worlds. Originally, they were too tightly regulated in both the services and rates they could offer. This lead to their failure. Then Reagan came in and should have shut them down. Instead, he freed them to make overly-specualtive investments, mostly in commercial real estate. This turned into a disaster. Regardless, saying that it was a simple matter of regulation/deregulation doesn't quite capture it, IMHO.

There was a tremendous amount of deregulation by reagan, Bush and Clinton before Bush the Lesser took office. But in choosing not to bother regulating firms like Countrywide and Ameriquest and actually preventing individual states from taking legal action against predatory lending, putting former bank lobbyists in charge of the federal regulation agencies and letting securities firms lever up their debt:assets ratios from ten to thirty and forty to one, Bush has a lot to answer for.

 

[Toddsterpatriot]

Who said she pays 30% in income taxes? Where did you get that from?

Buffett said it.

Where did he say that? Got a linky?

Google

 

[The Rabbi]

I'm talking specifically about the events of the last decade so the stuff about S and ls irrelevant..

Why did S and ls go belly up?

Also, too. I've posted a whole bunch of stuff showing that mortgage lending standards declined dramatically during the Bush years and articles by Wall Street fund managers and state Attorney generals that show that the Bush administration either chose not to enforce existing regulations or literally took a chainsaw to them, or even prevented individual states from enforcing various regulations that would have prevented a lot of the bad lending. I've also asked you to reply to these posts. I don't want to cut and paste all the actual stuff again but how about clicking the quote button on these particular posts and replying to what I've actually posted?

Here they are again. Just click the quote button and reply to the stuff in the post :

http://www.usmessageboard.com/polit...te-profits-1-went-to-wages-4.html#post4154905


http://www.usmessageboard.com/polit...te-profits-1-went-to-wages-9.html#post4156919

S&Ls went under because they could not sell their loans, as there was no standardized underwriting, making equal comparisons difficult.

So you agree that you have not posted a single piece of evidence that George W Bush deregulated the mortgage industry. Declining standards have nothing to do with deregulation. You understand that, right?

I've posted stuff from a variety of sources including a Wall Street fund manager, the new York Attorney general, and George W Bush that clearly show that Bush either deregulated, didn't enforce regulations that were already on the books or actively prevented state authorities taking legal action to enforce regulations that were still on the books. I can completely understand why you don't want to reply to the two posts I linked to. There's not really a lot you can say, is there?

Reagan deregulating the Savings and loans didn't have anything to do with them going bust?

You've posted a bunch of stuff, true. None of it proves what you think it proves, however.
When did Reagan deregulate the S&L industry? What killed S&Ls were the sudden spike in interest rates. They were locked into 30 year loans at 4.5% and the Discount Rate was over 10%.

 

[Toddsterpatriot]

I already provided it. Read the post again then go and read the archives of the site i linked to. You'll find endless stuff there. now then, how about answering my question. here it is again ; now that you've read all this and seen the guys with the chainsaw and the tree shears chopping up a bunch of mortgage regulations, what's your opinion on the whole thing?

No, nothing in there said that before Bush took office, banks had to hold mortgages until maturity.
No, nothing in there about Bush suddenly allowing banks, for the first time, to sell mortgages after they create them.

Try again?

Read my link again. Banks traditionally held a lot of their mortgages to maturity. It meant they had skin in the game and wouldn't go hog wild writing bad loans and then dumping them on somebody else, like what happened in the 2000s. When lending standards were relaxed from 2002 onwards the only regulation was the the loans not default for 90 or 180 days.

Banks and mortgage priginators no longer cared whether the loans they were making were safe or not. The mortgagees only had to make their payments for three or six months and then it was somebody else's problem. That's why new mortgage products with cheap teaser monthly rates for the first couple of years of the mortgage were heavily promoted around then. People could buy a two or three hundred thousand dollar home for rent money, and they were told by the mortgage seller "don't worry about the loan rate resetting, just come back to us and refinance the loan!". Except in 2005 or 6 the Fed started to raise rates and it was impossible to refinance the loans. Which led to the string of mortgage defaults which led to the meltdown.

"Read my link again. Banks traditionally held a lot of their mortgages to maturity."

Tradition?
Who cares about tradition?
You claimed Bush eliminated the regulation.
There was no regulation?
Were you lying?
Or were you just stupid?

 

[The Rabbi]

No, nothing in there said that before Bush took office, banks had to hold mortgages until maturity.
No, nothing in there about Bush suddenly allowing banks, for the first time, to sell mortgages after they create them.

Try again?

Read my link again. Banks traditionally held a lot of their mortgages to maturity. It meant they had skin in the game and wouldn't go hog wild writing bad loans and then dumping them on somebody else, like what happened in the 2000s. When lending standards were relaxed from 2002 onwards the only regulation was the the loans not default for 90 or 180 days.

Banks and mortgage priginators no longer cared whether the loans they were making were safe or not. The mortgagees only had to make their payments for three or six months and then it was somebody else's problem. That's why new mortgage products with cheap teaser monthly rates for the first couple of years of the mortgage were heavily promoted around then. People could buy a two or three hundred thousand dollar home for rent money, and they were told by the mortgage seller "don't worry about the loan rate resetting, just come back to us and refinance the loan!". Except in 2005 or 6 the Fed started to raise rates and it was impossible to refinance the loans. Which led to the string of mortgage defaults which led to the meltdown.

"Read my link again. Banks traditionally held a lot of their mortgages to maturity."

Tradition?
Who cares about tradition?
You claimed Bush eliminated the regulation.
There was no regulation?
Were you lying?
Or were you just stupid?

You pose that like they are mutually exclusive.

He cannot read something and draw reasonable conclusions from it. An interview with a mortgage person who says that lenders were watering down criteria suddenly becomes "Bush deregulated the mortgage industry."
I worked in the industry for 9 years. Criteria are always shifting. The artificially low interest rates of the mid 2000s (and starting with 1999 and Y2K) made mortgage lending very profitable. Eventually you run out of good credit risks so you have to ease. With rising property values it isn't a bad bet because your equity cusion is growing as well. But eventually you reach a point where you're writing crap and crap goes bad in about 18 months. Which is what happened. Initially the melt down was limited to subprime. Eventually they figured out that even the A vanilla loans were really subprime.

 

[Quantum Windbag]

Remember how Enron used newly deregulated energy markets to gouge their customers and dodgy accounting to blow up their own compnay? Remember Adelphia, Worldcom, Tyco and other accounting scandals? Sarbanes-Oxley was introduced to try and re-regulate what had previously been deregulated and stop more Enrons from happening. Same goes for Dodd-Frank, which unfortunately is basically a waste of time and is basically endless loopholes. But the clear trend over the past thirty years is one of deregulation, especially in the financial industry, and this has led to the biggest economic meltdown since the 1920s, the last time we had such lax financial regulation.

No. What I remember is Enron using newly created energy markets. They did ask for deregulation in the financial reporting laws. I have no idea why, but I do know it had nothing to do with deregulating the energy market.

The California electricity crisis, also known as the Western U.S. Energy Crisis of 2000 and 2001 was a situation in which California had a shortage of electricity caused by market manipulations and illegal shutdowns of pipelines by Texas energy consortiums. The state suffered from multiple large-scale blackouts, one of the state's largest energy companies collapsed, and the economic fall-out greatly harmed Governor Gray Davis's standing.

Drought and delays in approval of new power plants[4] and market manipulation decreased supply. This caused 800% increase in wholesale prices from April 2000 to December 2000.[5] In addition, rolling blackouts adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers.

California had an installed generating capacity of 45GW, but at the time of the blackouts demand was 28GW. A demand supply gap was created by energy companies, mainly Enron, to create an artificial shortage. Energy traders took power plants offline for maintenance in days of peak demand to increase the price.[6][7] Traders were thus able to sell power at premium prices, sometimes up to a factor of 20 times its normal value. Because the state Government had a cap on retail electricity charges, this market manipulation squeezed the industry's revenue margins, causing the bankruptcy of Pacific Gas and Electric Company (PG&E) and near bankruptcy of Southern California Edison in early 2001.[8]

The financial crisis was possible because of partial deregulation legislation instituted in 1996 by Governor Pete Wilson. Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.[9] The crisis cost $40 to $45 billion.

California electricity crisis - Wikipedia, the free encyclopedia


Ken Lay has been dead almost two years and Jeffrey Skilling is several years into his 24 year prison sentence, but one legacy of the Enron era lives on.

It’s the "Enron loophole," which exempts energy speculators who make trades electronically from US regulation. Some argue that the unregulated energy speculation, codified in 2000, can account for $20 to $25 in the jump in oil prices.

But now, 8 years after energy traders were able to push legislation exempting their electronic trades of energy futures from US regulation, a measure in the Farm Bill aims to close the loophole and subject futures trades made electronically inside the United States to US law.

“This bill is really our best bet to deter unscrupulous traders from manipulating energy prices and engaging in excessive speculation. This has been a long, hard road – and this is a major legislative victory," Said California Democrat Sen. Dianne Feinstein after the Senate passed the underlying Farm Bill on a broad, bipartisan basis.

Specifically, according to her office, the bill would "require electronic energy traders to provide an audit trail and record-keeping, monitor for market manipulation, and increase financial penalties for cases of market manipulation and excessive speculation."

Congress Seeks to Close the ‘Enron Loophole’ - ABC News

Here are examples of the kind of unscupulous trading and market manipulation. From evidence made public during the Enron trials :


One trader is heard on tapes obtained by CBS News saying, "Just cut 'em off. They're so f----d. They should just bring back f-----g horses and carriages, f-----g lamps, f-----g kerosene lamps."



and my favourite :

Trader 1: “They’re fucking taking all the money back from you guys? All the money you guys stole from those poor grandmothers in California?”
Trader 2: "Yeah, Grandma Millie man. But she’s the one who couldn’t figure out how to fucking vote on the butterfly ballot."
[Laughing from both sides]
Trader 1: "Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her ass for fucking $250 a megawatt hour."
[Harder Laughing]

Enron Tapes Anger Lawmakers - CBS News

Interesting articles.

Still does not change what I remember about energy futures being a new market. Nor does it change the fact that I remember the problem being with the financial reporting, not the trading itself. Enron created that fake energy crisis to hide their fraud, not to manipulate the market. The strange thing is that some people still think it is the fake crisis that was the problem, not the fraud.

By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of ENRON, the executives of ENRON embezzled funds funneling in from investments while reporting fraudulent earnings to those investors; this not only proliferated more investments from current stockholders, but also attracted new investors desiring the enjoy the apparent financial gains enjoyed by the ENRON corporation.

Easy Guide to Understanding ENRON Scandal Summary

 

[Raoul_Duke]

No. What I remember is Enron using newly created energy markets. They did ask for deregulation in the financial reporting laws. I have no idea why, but I do know it had nothing to do with deregulating the energy market.

The California electricity crisis, also known as the Western U.S. Energy Crisis of 2000 and 2001 was a situation in which California had a shortage of electricity caused by market manipulations and illegal shutdowns of pipelines by Texas energy consortiums. The state suffered from multiple large-scale blackouts, one of the state's largest energy companies collapsed, and the economic fall-out greatly harmed Governor Gray Davis's standing.

Drought and delays in approval of new power plants[4] and market manipulation decreased supply. This caused 800% increase in wholesale prices from April 2000 to December 2000.[5] In addition, rolling blackouts adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers.

California had an installed generating capacity of 45GW, but at the time of the blackouts demand was 28GW. A demand supply gap was created by energy companies, mainly Enron, to create an artificial shortage. Energy traders took power plants offline for maintenance in days of peak demand to increase the price.[6][7] Traders were thus able to sell power at premium prices, sometimes up to a factor of 20 times its normal value. Because the state Government had a cap on retail electricity charges, this market manipulation squeezed the industry's revenue margins, causing the bankruptcy of Pacific Gas and Electric Company (PG&E) and near bankruptcy of Southern California Edison in early 2001.[8]

The financial crisis was possible because of partial deregulation legislation instituted in 1996 by Governor Pete Wilson. Enron took advantage of this deregulation and was involved in economic withholding and inflated price bidding in California's spot markets.[9] The crisis cost $40 to $45 billion.

California electricity crisis - Wikipedia, the free encyclopedia


Ken Lay has been dead almost two years and Jeffrey Skilling is several years into his 24 year prison sentence, but one legacy of the Enron era lives on.

It’s the "Enron loophole," which exempts energy speculators who make trades electronically from US regulation. Some argue that the unregulated energy speculation, codified in 2000, can account for $20 to $25 in the jump in oil prices.

But now, 8 years after energy traders were able to push legislation exempting their electronic trades of energy futures from US regulation, a measure in the Farm Bill aims to close the loophole and subject futures trades made electronically inside the United States to US law.

“This bill is really our best bet to deter unscrupulous traders from manipulating energy prices and engaging in excessive speculation. This has been a long, hard road – and this is a major legislative victory," Said California Democrat Sen. Dianne Feinstein after the Senate passed the underlying Farm Bill on a broad, bipartisan basis.

Specifically, according to her office, the bill would "require electronic energy traders to provide an audit trail and record-keeping, monitor for market manipulation, and increase financial penalties for cases of market manipulation and excessive speculation."

Congress Seeks to Close the ‘Enron Loophole’ - ABC News

Here are examples of the kind of unscupulous trading and market manipulation. From evidence made public during the Enron trials :


One trader is heard on tapes obtained by CBS News saying, "Just cut 'em off. They're so f----d. They should just bring back f-----g horses and carriages, f-----g lamps, f-----g kerosene lamps."



and my favourite :

Trader 1: “They’re fucking taking all the money back from you guys? All the money you guys stole from those poor grandmothers in California?”
Trader 2: "Yeah, Grandma Millie man. But she’s the one who couldn’t figure out how to fucking vote on the butterfly ballot."
[Laughing from both sides]
Trader 1: "Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her ass for fucking $250 a megawatt hour."
[Harder Laughing]

Enron Tapes Anger Lawmakers - CBS News

Interesting articles.

Still does not change what I remember about energy futures being a new market. Nor does it change the fact that I remember the problem being with the financial reporting, not the trading itself. Enron created that fake energy crisis to hide their fraud, not to manipulate the market. The strange thing is that some people still think it is the fake crisis that was the problem, not the fraud.

By misrepresenting earnings reports while continuing to enjoy the revenue provided by the investors not privy to the true financial condition of ENRON, the executives of ENRON embezzled funds funneling in from investments while reporting fraudulent earnings to those investors; this not only proliferated more investments from current stockholders, but also attracted new investors desiring the enjoy the apparent financial gains enjoyed by the ENRON corporation.

Easy Guide to Understanding ENRON Scandal Summary

This is another thing Enron were doing illegally. But they were also manipulating markets and gouging customers due to the deregulation of California's energy markets. It's there in black and white.

 

[Raoul_Duke]

Read my link again. Banks traditionally held a lot of their mortgages to maturity. It meant they had skin in the game and wouldn't go hog wild writing bad loans and then dumping them on somebody else, like what happened in the 2000s. When lending standards were relaxed from 2002 onwards the only regulation was the the loans not default for 90 or 180 days.

Banks and mortgage priginators no longer cared whether the loans they were making were safe or not. The mortgagees only had to make their payments for three or six months and then it was somebody else's problem. That's why new mortgage products with cheap teaser monthly rates for the first couple of years of the mortgage were heavily promoted around then. People could buy a two or three hundred thousand dollar home for rent money, and they were told by the mortgage seller "don't worry about the loan rate resetting, just come back to us and refinance the loan!". Except in 2005 or 6 the Fed started to raise rates and it was impossible to refinance the loans. Which led to the string of mortgage defaults which led to the meltdown.

"Read my link again. Banks traditionally held a lot of their mortgages to maturity."

Tradition?
Who cares about tradition?
You claimed Bush eliminated the regulation.
There was no regulation?
Were you lying?
Or were you just stupid?

You pose that like they are mutually exclusive.

He cannot read something and draw reasonable conclusions from it. An interview with a mortgage person who says that lenders were watering down criteria suddenly becomes "Bush deregulated the mortgage industry."
I worked in the industry for 9 years. Criteria are always shifting. The artificially low interest rates of the mid 2000s (and starting with 1999 and Y2K) made mortgage lending very profitable. Eventually you run out of good credit risks so you have to ease. With rising property values it isn't a bad bet because your equity cusion is growing as well. But eventually you reach a point where you're writing crap and crap goes bad in about 18 months. Which is what happened. Initially the melt down was limited to subprime. Eventually they figured out that even the A vanilla loans were really subprime.

The Bush administration regulatos chose not to regulate firms like Countrywide and Ameriquest and these firms gradually lessened their lending standards, resulting in huge amounts of bad loans which in turn led to the meltdown. It's all there in black and white described by a Wall Street fund manager who covered the whole thing as it happened, predicted the bursting of the bubble and then wrote a bestselling book about the whole thing. That's the facts on my side of the argument, along with other sources like the New York AG and George W Bush himself making speeches where he scraps regulations for new loans.

On your side of the argument is your claim to have worked in the mortgage industry and, uh, standards are always shifting. So yeah, i'm happy with the way this debate is going.

 

[Raoul_Duke]

No, nothing in there said that before Bush took office, banks had to hold mortgages until maturity.
No, nothing in there about Bush suddenly allowing banks, for the first time, to sell mortgages after they create them.

Try again?

Read my link again. Banks traditionally held a lot of their mortgages to maturity. It meant they had skin in the game and wouldn't go hog wild writing bad loans and then dumping them on somebody else, like what happened in the 2000s. When lending standards were relaxed from 2002 onwards the only regulation was the the loans not default for 90 or 180 days.

Banks and mortgage priginators no longer cared whether the loans they were making were safe or not. The mortgagees only had to make their payments for three or six months and then it was somebody else's problem. That's why new mortgage products with cheap teaser monthly rates for the first couple of years of the mortgage were heavily promoted around then. People could buy a two or three hundred thousand dollar home for rent money, and they were told by the mortgage seller "don't worry about the loan rate resetting, just come back to us and refinance the loan!". Except in 2005 or 6 the Fed started to raise rates and it was impossible to refinance the loans. Which led to the string of mortgage defaults which led to the meltdown.

"Read my link again. Banks traditionally held a lot of their mortgages to maturity."

Tradition?
Who cares about tradition?
You claimed Bush eliminated the regulation.
There was no regulation?
Were you lying?
Or were you just stupid?

The Bush administration regulators chose not to regulate mortgage firms and, like the link says, from 2002-8 there was basically no effective lending standards at all, and the securitisation of the bad loans made in this period led to the meltdown. What part of this don't you understand?

 

[Raoul_Duke]

S&Ls went under because they could not sell their loans, as there was no standardized underwriting, making equal comparisons difficult.

So you agree that you have not posted a single piece of evidence that George W Bush deregulated the mortgage industry. Declining standards have nothing to do with deregulation. You understand that, right?

I've posted stuff from a variety of sources including a Wall Street fund manager, the new York Attorney general, and George W Bush that clearly show that Bush either deregulated, didn't enforce regulations that were already on the books or actively prevented state authorities taking legal action to enforce regulations that were still on the books. I can completely understand why you don't want to reply to the two posts I linked to. There's not really a lot you can say, is there?

Reagan deregulating the Savings and loans didn't have anything to do with them going bust?

You've posted a bunch of stuff, true. None of it proves what you think it proves, however.
When did Reagan deregulate the S&L industry? What killed S&Ls were the sudden spike in interest rates. They were locked into 30 year loans at 4.5% and the Discount Rate was over 10%.

Savings and loan crisis in which 747 institutions failed and had to be rescued with $160 billion of taxpayer monies.[28] Reagan's "elimination of loopholes" in the tax code included the elimination of the "passive loss" provisions that subsidized rental housing. Because this was removed retroactively, it bankrupted many real estate developments which used this tax break as a premise, which in turn bankrupted 747 Savings and Loans, many of whom were operating, moreorless, as banks, thus requiring the Federal Deposit Insurance Corporation to cover their debts and losses with tax payer money. This with some other "deregulation" policies, ultimately led to the largest political and financial scandal in U.S. history to that date. The savings and Loan crisis. The ultimate cost of the crisis is estimated to have totaled around USD $150 billion, about $125 billion of which was directly subsidized by the U.S. government, which further increased the large budget deficits of the early 1990s. See Keating Five.

As an indication of this scandal's size, Martin Mayer wrote at the time, "The theft from the taxpayer by the community that fattened on the growth of the savings and loan (S&L) industry in the 1980s is the worst public scandal in American history. Teapot Dome in the Harding administration and the Credit Mobilier in the times of Ulysses S. Grant have been taken as the ultimate horror stories of capitalist democracy gone to seed. Measuring by money, [or] by the misallocation of national resources... the S&L outrage makes Teapot Dome and Credit Mobilier seem minor episodes." [29]

Economist John Kenneth Galbraith called it "the largest and costliest venture in public misfeasance, malfeasance and larceny of all time."[30]

Reagan administration scandals - Wikipedia, the free encyclopedia

 

[Raoul_Duke]

Buffett said it.

Where did he say that? Got a linky?

Google

Have you got an actual direct link to a cite which backs up your claim that the secretary was paying 30% income tax?

 

[Soggy in NOLA]

Read my link again. Banks traditionally held a lot of their mortgages to maturity. It meant they had skin in the game and wouldn't go hog wild writing bad loans and then dumping them on somebody else, like what happened in the 2000s. When lending standards were relaxed from 2002 onwards the only regulation was the the loans not default for 90 or 180 days.

Banks and mortgage priginators no longer cared whether the loans they were making were safe or not. The mortgagees only had to make their payments for three or six months and then it was somebody else's problem. That's why new mortgage products with cheap teaser monthly rates for the first couple of years of the mortgage were heavily promoted around then. People could buy a two or three hundred thousand dollar home for rent money, and they were told by the mortgage seller "don't worry about the loan rate resetting, just come back to us and refinance the loan!". Except in 2005 or 6 the Fed started to raise rates and it was impossible to refinance the loans. Which led to the string of mortgage defaults which led to the meltdown.

"Read my link again. Banks traditionally held a lot of their mortgages to maturity."

Tradition?
Who cares about tradition?
You claimed Bush eliminated the regulation.
There was no regulation?
Were you lying?
Or were you just stupid?

The Bush administration regulators chose not to regulate mortgage firms and, like the link says, from 2002-8 there was basically no effective lending standards at all, and the securitisation of the bad loans made in this period led to the meltdown. What part of this don't you understand?

The Bush administration regulators?

I recall Bush screaming from the rooftops about these problems and Frank, Waters, etc. basically calling him racist.

 

[The Rabbi]

"Read my link again. Banks traditionally held a lot of their mortgages to maturity."

Tradition?
Who cares about tradition?
You claimed Bush eliminated the regulation.
There was no regulation?
Were you lying?
Or were you just stupid?

You pose that like they are mutually exclusive.

He cannot read something and draw reasonable conclusions from it. An interview with a mortgage person who says that lenders were watering down criteria suddenly becomes "Bush deregulated the mortgage industry."
I worked in the industry for 9 years. Criteria are always shifting. The artificially low interest rates of the mid 2000s (and starting with 1999 and Y2K) made mortgage lending very profitable. Eventually you run out of good credit risks so you have to ease. With rising property values it isn't a bad bet because your equity cusion is growing as well. But eventually you reach a point where you're writing crap and crap goes bad in about 18 months. Which is what happened. Initially the melt down was limited to subprime. Eventually they figured out that even the A vanilla loans were really subprime.

The Bush administration regulatos chose not to regulate firms like Countrywide and Ameriquest and these firms gradually lessened their lending standards, resulting in huge amounts of bad loans which in turn led to the meltdown. It's all there in black and white described by a Wall Street fund manager who covered the whole thing as it happened, predicted the bursting of the bubble and then wrote a bestselling book about the whole thing. That's the facts on my side of the argument, along with other sources like the New York AG and George W Bush himself making speeches where he scraps regulations for new loans.

On your side of the argument is your claim to have worked in the mortgage industry and, uh, standards are always shifting. So yeah, i'm happy with the way this debate is going.

Well, first you said Bush deregulated the mortgage industry. That wasn't true and you failed to show it.
Now you say Bush regulators (who?) chose not to regulate Countrywide and Ameriquest. Please show where they chose not to. Much of Countrywide's loans were sold to Fannie/Freddie, which set credit terms. Those in turn are regulated by Congress, not the President.

Your credibility here is slipping.

 

[Seawytch]

Go ahead Republicans...keep thinking this income inequality doesn't matter. It hasn't been this high since the 20s.

 

[The Rabbi]

Go ahead Republicans...keep thinking this income inequality doesn't matter. It hasn't been this high since the 20s.

See, most people would rather go up the income scale than drag others down. That's what Democrats don't understand.