The S&L Crisis Ripoff and Rape of America

[Neubarth]

The Savings and Loan Crisis of 1988 - 1991 in which the taxpayers paid multi Billions to bail out the Federally chartered institutions. What was it all about?

Easy, bad loans on Real Estate and unsecured loans to "friends of the banks" (I.e. Republiscams.) You might remember, Republiscam John McCain was rebuked by the Senate Ethics Committee for his role in the corruption. Neil Bush, son of the former President was directly responsible for the multi-Billion dollar loss of one savings and loan because he loaned hundreds of millions to his corrupt "friends" without informing the board of directors of his complicity in their criminal behavior. Over a hundred million of that money was lost. Bush being the son of the Republiscam President was not indicted and was allowed to pay a ridiculous $50,000 fine for his outrageous behavior. His friends had paid him Millions to get the illegal loans in the first place.

Gosh it must be great to be totally corrupt in a totally corrupt administration! Reagan allowed the S&L's to operate as banks under Federal Charter and the industry was repeatedly raped by Republiscam bankers who were all "new found friends of the President."

Gosh that reminds me of what happened recently under the horribly corrupt administration of Dubya Bush. The entire family was and is corrupt as hell and they all belong in Prison for life. But then again, the entire Republiscam Party is corrupt as hell.

When Dubya was elected in 2000, we just knew that we would be revisited with unbelievable banking corruption just like we had under Reagan-Bush (up to that time the most corrupt administration in American History! Dubya, of course, surpassed that in spades!). Only this time it wasn't hundreds of Billions in losses the taxpayers had to pick up, it was TRILLIONS of Dollars that we had to add to the national debt to bail out all of the horribly corrupt money institutions. We need to put the entire Dubya administration on trial for Treason against these United States.

When are we going to eliminate the open criminality in this country? When?

 

[rdean]

The right wing calls this "good business" and "how capitalism works" and they say, "Let the market sort it out".

 

[skookerasbil]

The Savings and Loan Crisis of 1988 - 1991 in which the taxpayers paid multi Billions to bail out the Federally chartered institutions. What was it all about?

Easy, bad loans on Real Estate and unsecured loans to "friends of the banks" (I.e. Republiscams.) You might remember, Republiscam John McCain was rebuked by the Senate Ethics Committee for his role in the corruption. Neil Bush, son of the former President was directly responsible for the multi-Billion dollar loss of one savings and loan because he loaned hundreds of millions to his corrupt "friends" without informing the board of directors of his complicity in their criminal behavior. Over a hundred million of that money was lost. Bush being the son of the Republiscam President was not indicted and was allowed to pay a ridiculous $50,000 fine for his outrageous behavior. His friends had paid him Millions to get the illegal loans in the first place.

Gosh it must be great to be totally corrupt in a totally corrupt administration! Reagan allowed the S&L's to operate as banks under Federal Charter and the industry was repeatedly raped by Republiscam bankers who were all "new found friends of the President."

Gosh that reminds me of what happened recently under the horribly corrupt administration of Dubya Bush. The entire family was and is corrupt as hell and they all belong in Prison for life. But then again, the entire Republiscam Party is corrupt as hell.

When Dubya was elected in 2000, we just knew that we would be revisited with unbelievable banking corruption just like we had under Reagan-Bush (up to that time the most corrupt administration in American History! Dubya, of course, surpassed that in spades!). Only this time it wasn't hundreds of Billions in losses the taxpayers had to pick up, it was TRILLIONS of Dollars that we had to add to the national debt to bail out all of the horribly corrupt money institutions. We need to put the entire Dubya administration on trial for Treason against these United States.

When are we going to eliminate the open criminality in this country? When?

another dolt who doesnt understand the effect of regulations on the market.


Interested parties need to read Thomas Sowell's "The Housing Market: Boom and Bust". You'll get good iea of what facilitates corporate greed. ( operative term being "facilitates")


When the government injects itself into the market, it always looks like a good idea to the hopelessly duped, until the necessary tradeoffs hit the marketplace years later.

 

[Neubarth]

another dolt who doesnt understand the effect of regulations on the market.


Interested parties need to read Thomas Sowell's "The Housing Market: Boom and Bust". You'll get good iea of what facilitates corporate greed. ( operative term being "facilitates")


When the government injects itself into the market, it always looks like a good idea to the hopelessly duped, until the necessary tradeoffs hit the marketplace years later.

Your comment is absolutely ludicrous. It was the deregulation of the Savings and Loan industry that resulted in the rape of same by the corrupt Republiscams. Prior to the deregulation they were essentially a means for the common man to finance a home loan at practical interest rates. Under Reagan the Savings and loans became banks and were run into the ground by Fat Cat Republiscam Bankers.

The shooting is going to start either this summer or the next. We need to remove that horrible class of crooks from this country and redistribute their ill-gotten gains among the former middle class. Watch, it will become open season on "Card Carrying Republiscams." I will not shed a tear for them, as they will well deserve what they get.

 

[francoHFW]

Blind, ignorant ideology and BS propaganda vs facts and truth. Excellent!

 

[Neubarth]

There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other Republiscam politicians

Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which eventually cost American tax payers over ONE TRILLION dollars (This is what really pushed the national debt over the edge. Clinton could not make headway against it even though he was very frugal with taxpayer dollars).

Between 1981 and 1989, when George Bush finally announced that there was a "Savings and Loan Crisis" to the world (After the Republiscams raped the Savings and Loans for as much as they could get.), the Reagan/Bush administration worked to cover up Savings and Loan problems by reducing the number and depth of examinations required of S&Ls as well as attacking political opponents who were sounding early alarms about the S&L industry.

Industry insiders were aware of significant S&L problems as early 1986 that they felt would require a bailout. This information was conveniently kept from the media until after Bush had won the 1988 elections.

Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings in Sunrise, Florida. After federal regulators closed the S&L, the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his corrupt partners paid. The taxpayers had to pay back the remaining 4 million plus dollars.

Neil Bush was the most widely targeted member of the Bush family by the press in the S&L scandal. Because of his father's connections, Neil became director of Silverado Savings and Loan at the young age of 30 in 1985. Three years later the institution was belly up at a cost of $1.6 billion to tax payers to bail out. Corruption run rampant!

 

[boilermaker55]

There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other Republiscam politicians

Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which eventually cost American tax payers over ONE TRILLION dollars (This is what really pushed the national debt over the edge. Clinton could not make headway against it even though he was very frugal with taxpayer dollars).

Between 1981 and 1989, when George Bush finally announced that there was a "Savings and Loan Crisis" to the world (After the Republiscams raped the Savings and Loans for as much as they could get.), the Reagan/Bush administration worked to cover up Savings and Loan problems by reducing the number and depth of examinations required of S&Ls as well as attacking political opponents who were sounding early alarms about the S&L industry.

Industry insiders were aware of significant S&L problems as early 1986 that they felt would require a bailout. This information was conveniently kept from the media until after Bush had won the 1988 elections.

Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings in Sunrise, Florida. After federal regulators closed the S&L, the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his corrupt partners paid. The taxpayers had to pay back the remaining 4 million plus dollars.

Neil Bush was the most widely targeted member of the Bush family by the press in the S&L scandal. Because of his father's connections, Neil became director of Silverado Savings and Loan at the young age of 30 in 1985. Three years later the institution was belly up at a cost of $1.6 billion to tax payers to bail out. Corruption run rampant!

You see, that is the typical response from most of the Right-wing posters on this board. They don't care for facts and if they cannot argue them they insult the poster.
Ty for posting this subject.

 

[georgephillip]

At least there was a measure of accounting after the S&L Crisis; that doesn't appear to be the case regarding our most recent looting:

"ZERO INDICTMENTS, ZERO CONVICTIONS

"William Black:

"'In the savings and loan crisis… we had over 1,000 convictions of senior insiders…. At this stage (March 2010) among the subprime lending specialists, we have zero convictions. We have zero indictments.…

"'In September 2004, the FBI began publicly warning that there was an "epidemic" of mortgage fraud, and it predicted that it would produce an economic crisis, if it were not dealt with.

"'The FBI has also said that 80 percent of the mortgage fraud losses occur when lender personnel are involved.

"'So, Fitch looks at a small sample of these loans, finally, in November 2007….And what did they find? They said…that there was the appearance of fraud in nearly every file we examined. And they said that normal underwriting would have detected all of those frauds.'"

The Case Against Bernanke and Greenspan » Counterpunch: Tells the Facts, Names the Names

 

[skookerasbil]

another dolt who doesnt understand the effect of regulations on the market.


Interested parties need to read Thomas Sowell's "The Housing Market: Boom and Bust". You'll get good iea of what facilitates corporate greed. ( operative term being "facilitates")


When the government injects itself into the market, it always looks like a good idea to the hopelessly duped, until the necessary tradeoffs hit the marketplace years later.

Your comment is absolutely ludicrous. It was the deregulation of the Savings and Loan industry that resulted in the rape of same by the corrupt Republiscams. Prior to the deregulation they were essentially a means for the common man to finance a home loan at practical interest rates. Under Reagan the Savings and loans became banks and were run into the ground by Fat Cat Republiscam Bankers.

The shooting is going to start either this summer or the next. We need to remove that horrible class of crooks from this country and redistribute their ill-gotten gains among the former middle class. Watch, it will become open season on "Card Carrying Republiscams." I will not shed a tear for them, as they will well deserve what they get.

The Mother of All Deregulation

THE CLINTON administration’s free-market program culminated in two momentous deregulatory acts. Near the end of his eight years in office, Clinton signed into law the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, one of the most far-reaching banking reforms since the Great Depression. It swept aside parts of the Glass-Steagall Act of 1933 that had provided significant regulatory firewalls between commercial banks, insurance companies, securities firms, and investment banks.


IT MAY be helpful to consider what has become of the old Federal Reserve Regulations W and X, the old margin requirements on consumer and housing loans. Since the gutting of Glass-Steagall, the new Regulation W deals with transactions between commercial banks and their securities affiliates. Federal regulatory resources, which in the past were directed to the safety and soundness of mortgage and consumer loans, are now redirected to the opaque transactions between affiliates within financial conglomerates. The former regulatory effort was prudential and preventive in nature, the latter more akin to monitoring the problem only after the horse had left the barn.

Wall Street had been lobbying for years for an end to Glass-Steagall, but it had not received much support before Clinton. Among those with a personal interest in the demise of Glass-Steagall was Robert Rubin, who had months earlier stepped down as treasury secretary to become chair of Citigroup, a financial-services conglomerate that was facing the possibility of having to sell off its insurance underwriting subsidiary. Although Rubin openly boasted of his lobbying efforts to abolish Glass-Steagall, the Clinton administration never brought charges against him for his obvious violations of the Ethics in Government Act.

Rubin also appealed to liberal sentiment. He claimed to have urged Congress and the White House to preserve the Community Reinvestment Act (CRA), which sought to prod banks to channel a portion of their lending to poor, inner city areas. But there was already widespread evidence that CRA was falling short by permitting banks to engage in meaningless reporting requirements in place of substantive investment in low- and moderate-income communities. The real action was not CRA renewal but the demise of the Glass-Steagall firewalls. Banks were suddenly free to load up on riskier investments as long as they did so through affiliated entities such as their own hedge funds and special investment vehicles. Those riskier investments included exotic financial innovations, such as the complex derivatives that were increasingly difficult for even experts to understand or value.

In 1998, the sudden meltdown and bailout of the Long-Term Capital Management hedge fund showed the dangers of large derivative bets staked on borrowed money. But by March 1999, Greenspan was once again praising derivatives as hedging instruments and as enhancing the ability “to differentiate risk and allocate it to those investors most able and willing to take it.”

In 1993, the Securities and Exchange Commission (SEC) had considered extending capital requirements to derivatives, but such proposals went nowhere, and Wall Street lobbied to prevent any regulation of derivatives. Then in December 2000, in his final weeks in office, Bill Clinton signed into law the Commodity Futures Modernization Act, which shielded the markets for derivatives from federal regulation.

Since then, derivatives have grown in size and become gigantic wagers on the movement of interest rates, commodity prices, and currency values. First came the CDO bubble, which acted as a transmission belt by which the subprime mortgage cancer metastasized and spread through financial institutions around the globe. Warren Buffett, legendary investor and chair of Berkshire Hathaway, would soon refer to such derivatives as “weapons of mass destruction.”

Since the collapse of the CDO market, the next derivatives bubble may be the market for credit default swaps, which are credit insurance contracts designed to cover losses to banks and bondholders when companies fail to pay their debts. Today the notional amount of the credit default swap market is at least $45 trillion, about half the total U.S. household wealth and about five times the national debt.

When Bear Stearns melted down this past spring, it was holding $2.5 trillion in credit default swaps that were worth perhaps $40.3 billion in fair market value. The run on Bear Stearns was largely caused by the collapsing mortgage and CDO markets. But it was the market for credit default swaps that may have led the Federal Reserve to intervene. If Bear Stearns had been allowed to fail, countless counterparties on these credit default swaps would have faced enormous losses. The shock waves could have taken down major insurance companies.

This is why George Soros, billionaire hedge-fund manager, has voiced his fears about the unregulated market for credit default swaps. According to Soros, the prospect of cascading defaults hangs over the financial system like a sword of Damocles. He has not called for outlawing the market but for its regulation by establishing a clearinghouse or exchange for the market, capital requirements, and strict margin requirements for all existing and future credit default swap contracts.


Dissent Magazine - Summer 2008 Issue - The Legacy of the Clin...

 

[skookerasbil]

Many liberals simply dont understand the difference between deregulation and misguided regulation and its unintended consequences.

Thus..........for those looking for a total education of the matter, I urge them to read this book >>>>>

[ame=http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/0465018807]Amazon.com: The Housing Boom and Bust (9780465018802): Thomas Sowell: Books[/ame]

 

[skookerasbil]

 

[eflatminor]

...the taxpayers paid...to bail out the Federally chartered institutions.

Well there's your problem right there. Stop with the bailouts, stop with the Federally chartered institutions, stop with the moral hazards that always come back to bite us in the ass. Next.

 

[Neubarth]

...the taxpayers paid...to bail out the Federally chartered institutions.

Well there's your problem right there. Stop with the bailouts, stop with the Federally chartered institutions, stop with the moral hazards that always come back to bite us in the ass. Next.

That is the essence of the Republiscam plan of getting fantabulously wealthy. They will never allow a bill in Congress that would curtail the refunding of the corrupt banks. That is the reason why they carefully calculated the present economic but to happen a year before Bush was to leave office, so the monetary insurance to the corrupt banks would be paid and/or guaranteed up to the last day Dubya Bush was in office.

IT IS ALL ABOUT GETTING FILTHY RICH AT TAXPAYER EXPENSE.

 

[uscitizen]

The bonds sold to finance the S&L bailout just matured a few years ago and some of current Obama debt is from paying them off.

 

[eflatminor]

They will never allow a bill in Congress that would curtail the refunding of the corrupt banks.

And you think the Democrats will? Both parties have supported this crap for generations. Until the sheeple stop voting for the very same big government politicians that caused the problem, you deserve what you get. There is only one presidential candidate and a handful of house members that will stop the bailouts. Join us or stop your bitching about the other side doing exactly what your side is doing. It's boring.

 

[uscitizen]

A handful can do nothing.

 

[Decepticon]

another dolt who doesnt understand the effect of regulations on the market.


Interested parties need to read Thomas Sowell's "The Housing Market: Boom and Bust". You'll get good iea of what facilitates corporate greed. ( operative term being "facilitates")


When the government injects itself into the market, it always looks like a good idea to the hopelessly duped, until the necessary tradeoffs hit the marketplace years later.

Your comment is absolutely ludicrous. It was the deregulation of the Savings and Loan industry that resulted in the rape of same by the corrupt Republiscams. Prior to the deregulation they were essentially a means for the common man to finance a home loan at practical interest rates. Under Reagan the Savings and loans became banks and were run into the ground by Fat Cat Republiscam Bankers.

The shooting is going to start either this summer or the next. We need to remove that horrible class of crooks from this country and redistribute their ill-gotten gains among the former middle class. Watch, it will become open season on "Card Carrying Republiscams." I will not shed a tear for them, as they will well deserve what they get.

The Mother of All Deregulation

THE CLINTON administration’s free-market program culminated in two momentous deregulatory acts. Near the end of his eight years in office, Clinton signed into law the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, one of the most far-reaching banking reforms since the Great Depression. It swept aside parts of the Glass-Steagall Act of 1933 that had provided significant regulatory firewalls between commercial banks, insurance companies, securities firms, and investment banks.


IT MAY be helpful to consider what has become of the old Federal Reserve Regulations W and X, the old margin requirements on consumer and housing loans. Since the gutting of Glass-Steagall, the new Regulation W deals with transactions between commercial banks and their securities affiliates. Federal regulatory resources, which in the past were directed to the safety and soundness of mortgage and consumer loans, are now redirected to the opaque transactions between affiliates within financial conglomerates. The former regulatory effort was prudential and preventive in nature, the latter more akin to monitoring the problem only after the horse had left the barn.

Wall Street had been lobbying for years for an end to Glass-Steagall, but it had not received much support before Clinton. Among those with a personal interest in the demise of Glass-Steagall was Robert Rubin, who had months earlier stepped down as treasury secretary to become chair of Citigroup, a financial-services conglomerate that was facing the possibility of having to sell off its insurance underwriting subsidiary. Although Rubin openly boasted of his lobbying efforts to abolish Glass-Steagall, the Clinton administration never brought charges against him for his obvious violations of the Ethics in Government Act.

Rubin also appealed to liberal sentiment. He claimed to have urged Congress and the White House to preserve the Community Reinvestment Act (CRA), which sought to prod banks to channel a portion of their lending to poor, inner city areas. But there was already widespread evidence that CRA was falling short by permitting banks to engage in meaningless reporting requirements in place of substantive investment in low- and moderate-income communities. The real action was not CRA renewal but the demise of the Glass-Steagall firewalls. Banks were suddenly free to load up on riskier investments as long as they did so through affiliated entities such as their own hedge funds and special investment vehicles. Those riskier investments included exotic financial innovations, such as the complex derivatives that were increasingly difficult for even experts to understand or value.

In 1998, the sudden meltdown and bailout of the Long-Term Capital Management hedge fund showed the dangers of large derivative bets staked on borrowed money. But by March 1999, Greenspan was once again praising derivatives as hedging instruments and as enhancing the ability “to differentiate risk and allocate it to those investors most able and willing to take it.”

In 1993, the Securities and Exchange Commission (SEC) had considered extending capital requirements to derivatives, but such proposals went nowhere, and Wall Street lobbied to prevent any regulation of derivatives. Then in December 2000, in his final weeks in office, Bill Clinton signed into law the Commodity Futures Modernization Act, which shielded the markets for derivatives from federal regulation.

Since then, derivatives have grown in size and become gigantic wagers on the movement of interest rates, commodity prices, and currency values. First came the CDO bubble, which acted as a transmission belt by which the subprime mortgage cancer metastasized and spread through financial institutions around the globe. Warren Buffett, legendary investor and chair of Berkshire Hathaway, would soon refer to such derivatives as “weapons of mass destruction.”

Since the collapse of the CDO market, the next derivatives bubble may be the market for credit default swaps, which are credit insurance contracts designed to cover losses to banks and bondholders when companies fail to pay their debts. Today the notional amount of the credit default swap market is at least $45 trillion, about half the total U.S. household wealth and about five times the national debt.

When Bear Stearns melted down this past spring, it was holding $2.5 trillion in credit default swaps that were worth perhaps $40.3 billion in fair market value. The run on Bear Stearns was largely caused by the collapsing mortgage and CDO markets. But it was the market for credit default swaps that may have led the Federal Reserve to intervene. If Bear Stearns had been allowed to fail, countless counterparties on these credit default swaps would have faced enormous losses. The shock waves could have taken down major insurance companies.

This is why George Soros, billionaire hedge-fund manager, has voiced his fears about the unregulated market for credit default swaps. According to Soros, the prospect of cascading defaults hangs over the financial system like a sword of Damocles. He has not called for outlawing the market but for its regulation by establishing a clearinghouse or exchange for the market, capital requirements, and strict margin requirements for all existing and future credit default swap contracts.


Dissent Magazine - Summer 2008 Issue - The Legacy of the Clin...

Look at the second sentence.

He blames Clinton for SIGNING the GRAMM-Leach-Bliley act.

Yet no blame for the three REPUBLICONS who FRICKING WROTE THE FRICKING BILL.

What other legislation did Phil Gramm write? Oh, the Commodities and Futures Modernization Act. That didn't deregulate our financial system into chaos?

Way to try to blame Clinton for the bills Republicans WROTE and WORKED THOUGH CONGRESS.