New Banking Crisis In The Works

[Dr Gregg]

mudwhistle, if Goldman Sachs did what it has been alleged they did, they deliberately uprated failing mortgage securities and pandered them to clients, causing losses in excess of $1 Billion. If pursuing wrong-doing on that scale is unwise, I'd love to hear your reasoning for this. In my view, if this occurred, several GS executives need to go to federal prison...civil judgments are not enough.

As for the size of banks, the mergers being complained of now occurred during the Bush administration or before. The three biggest -- Citigroup, Bank of America and J.P.Morgan -- were absorbing smaller institutions throughout the 1990's and beyond. Citigroup itself is a result of mergers between Citicorp and Travelers in 1998, under Clinton.

Obama does need to tackle the question of breaking up the megabanks, but it is not true that he designed them.

Just your usual, run of the mill, Obama bashing thread, not rooted in any reality.

If Goldman's is guilty, then the people involved should be prosecuted. If they did no wrong, then they will be exonerated. And that's all there is to know, no secret agenda, not evil plot to purposely cause the banks to fail. Holding people accountable for deceptive actions. Our justice system will determine it.

it's the fantasy view of many conservatives here that business can't do no wrong, although history shows they will fuck us and be deceptive any chance they get.

 

[Dr Gregg]

Do the morons on this forum ever get tired of looking like idiots by calling Obama a marxists? Give it a rest you pathetic hacks

 

[Dr Gregg]

I'll bite. What is the 'real agenda" and how does prosecuting wrong-doers at Goldman Sacs fit into it?

Oh! Sorry, Obama does one thing right with regards to GS, after screwing this nation into the ground, and all is forgiven? I think NOT. And you ask, "What is the 'real agenda'? OMG, you really have no clue do you?

I am sure as heck not going into pages of dialog to explain that.

I disgree. I think it's high time all you people start explaining EXACTLY what you mean instead of just throwing out a right wing noise machine talking point and expecting it will stick as unforeseen evil approaching.

Have at it.

That would require logic, reasoning, and actual facts, as well as intellectual honesty, something not synonymous with the conservative talking points.

 

[MaggieMae]

To be specific....Obama is using Marxist rhetoric to gain access to each and every one of our bank accounts. This new bill contains regulations that will allow the federal government to spy on us by monitoring our bank accounts.

How's that for specifics?


And the worst part about it is every time somebody discovers what Obama and the Democrats are up to it's so ridiculously crazy that nobody will believe them when they expose it. So it happens with the help of useless idiots like yourself.

You're so full of shit.

When the top 10 banks control the entire economy, it's a serious situation. They need to stop trying to figure out ways to line their own pockets and start freeing up credit to small banks and small businesses. THAT is the primary purpose of the new regulations. It has zero to do with emptying your personal bank account. Other than you, who else is saying such a stupid thing?

 

[MaggieMae]

I remember when they weren't in power the Dems were always mouthing off in the news about something.

It was always one attack after another.....which basically appeared like a constant deception campaign.

It was always "How Do We Fool Them Today"

Now it's "How Do We Fuck Them Today"

Newsflash, genius: That hasn't changed in 200 years.

 

[boedicca]

You're so full of shit.

When the top 10 banks control the entire economy, it's a serious situation. They need to stop trying to figure out ways to line their own pockets and start freeing up credit to small banks and small businesses. THAT is the primary purpose of the new regulations. It has zero to do with emptying your personal bank account. Other than you, who else is saying such a stupid thing?

The Federal Reserve enables this control - so let's get rid of it.

 

[MaggieMae]

Poor babies. There are going to be new rules in the banking and securities exchanges.

Ironically, if there were NOT new regulations put in place, the noise from the right would be deafening. The attitudes by some on the right are truly an enigma, since even after those banks nearly crushed the entire world's economy, not to mention our own (which includes many Republican/Conservatives obviously), they're now supporting the continuation of Wall Street shenanigans. Go figure.

 

[MaggieMae]

So many sheeple & so little time. I have a busy weekend & have zero time to re-explain the Big Bank, Federal Reserve, GSEs & Government relationship. These are all tools to rob & decieve you. The government wanted this & pushed to cause it. Yes the governments plan is always to make corporations larger merging or wiping out the competition. This concentrates the power at the top so they can control everything. STUDY THE HISTORY OF SOCIALISM!!! Then look at how it was pulled off behind the sceens.

September 1999 - New York Times

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Well when you return from your busy weekend, you must explain how YOU would "fix" the immediate situation, and omit the historical data which does nothing more than affix blame but offers no teeth. For any historical data you can produce, there are counter arguments, so it's really not worth your time. Give us a solution for what to do RIGHT NOW.

 

[MaggieMae]

September 1999 - New York Times

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Yep. And ol' George Bush went even further, which opened the door wide for all those independent mortgage companies, like Countrywide, to profit off the backs of people who in a real world would not even be considered for a home mortgage at all. There were so many of these bogus mortgagors, as a result of the new Bush policy, they were like carnival barkers wooing people off the streets, knowing full well those mortgages would soon get lost in the Wall Street securities bundling debacle:
1/20/2004

Bush seeks to increase minority homeownership
By Thomas A. Fogarty, USA TODAY
USATODAY.com - Bush seeks to increase minority homeownership

In a bid to boost minority homeownership, President Bush will ask Congress for authority to eliminate the down-payment requirement for Federal Housing Administration loans.
In announcing the plan Monday at a home builders show in Las Vegas, Federal Housing Commissioner John Weicher called the proposal the "most significant FHA initiative in more than a decade." It would lead to 150,000 first-time owners annually, he said.

Nothing-down options are available on the private mortgage market, but, in general, they require the borrower to have pristine credit. Bush's proposed change would extend the nothing-down option to borrowers with blemished credit.

The FHA isn't a direct lender, but guarantees loan payments for mortgages on moderately priced owner-occupied property. The FHA guarantee now permits private lenders to finance as much as 97% of the purchase price of a home for millions of low- and middle-income borrowers.

In the proposal soon to be delivered to Congress, Bush would allow the FHA to guarantee loans for the full purchase price of the home, plus down-payment costs. As a practical matter, the FHA would guarantee mortgages as high as 103% of the value of the underlying property.

Weicher says the change is aimed at potential home buyers whose credit excludes them from the private mortgage market. Borrowers would need sufficient income to meet monthly payments. But, he said, the plan would eliminate the single largest impediment to homeownership for millions of households — lack of money for a down payment.

The most recent government figures show a national home ownership rate of 68.4%, the highest ever. But less than half of black and Latino householders own the home in which they live. Bush has a goal of 5.5 million new minority homeowners this decade.

FHA loans carry higher risks of delinquency and foreclosure than do private mortgages, and the proposed change presumably will lead to greater losses to the government than the current program does.

Weicher said the added risk will be offset by higher fees charged to borrowers who opt to make no down payment.

On a $100,000 mortgage with an interest rate of about 6%, the nothing-down borrower could expect closing costs $750 higher than other FHA customers. Monthly house payments would be slightly higher.

Mortgage analyst Keith Gumbinger of financial publishers HSH Associates says the Bush plan "would fill at least a small niche in the mortgage market" — first-time buyers with somewhat impaired credit.

Affordable-housing advocate Scott Syphax, CEO of Nehemiah Corp., called the proposal "revolutionary." It marks the clearest official acknowledgment that millions of potential homeowners are being blocked by high down-payment costs, he says.

 

[froggy]

The next banking crisis is being orchestrated by the Obama White House.

Obama's new push is to punish banks...Goldman Sachs to start with.

Somebody explain how this helps job growth. Isn't that the biggest problem in the economy today? To many are ether collecting unemployment or simply giving up on trying to find a job. Everyone knows someone who lost a job in the last couple of years but Obama doesn't seem to care. He's focusing on health care....and having done that he's after banks now.

A funny thing has been happening. Big banks are getting bigger and small banks are closing their doors. Is Obama really for the little guy or is he just using Marxist rhetoric to cause one crisis after another to help his friends and takeover more and more of the private sector*. He did receive over $900k in campaign donations from Goldman Sachs.....why would he try to prosecute them in the headlines yet tell them behind the scenes that all of this "Fat-Cat" talk is gonna help them in the long run. That is what he's doing folks.

Financial Debate Renews Scrutiny on Banks’ Size

WASHINGTON — One question has vexed the Obama administration and Congress since the start of the financial crisis: how to prevent big bank bailouts.


In the last year and a half, the largest financial institutions have only grown bigger, *mainly as a result of government-brokered mergers.* They now enjoy borrowing at significantly lower rates than their smaller competitors, a result of the bond markets’ implicit assumption that the giant banks are “too big to fail.”
Breaking News and Opinion on The Huffington Post

All these things that he's doing is in preparation of the one to come (666) ring a bell.

 

[MaggieMae]

The "wrong-doers" at Goldman Sachs will never see the inside of a courtroom.

This is just more Kabuki theater from the Boyking empire.

You heard it here first.

Bookmark this post.

The entire process has been very suspicious:

- No letter from the SEC notifying the company in advance.
- No attempt to negotiate a settlement.
- Release of info to press during market hours.

And then there's the bit about how GS has told the investment community that it will benefit from the regulation at the expense of competitors.

Yes. This is Kabuki Theater - with the one alteration that the 30 year old will be sacrificed to the The One.

Your first two allegations are pure speculation, based on blog comments. If you have a credible source, please post it.

The third item is of course ignoring the fact that for the press to hold back on a story that could effect the stock market would be even more disengenuous. Isn't it you guys who are constantly saying "the market will take care of itself"?? And it did.

 

[MaggieMae]

You're so full of shit.

When the top 10 banks control the entire economy, it's a serious situation. They need to stop trying to figure out ways to line their own pockets and start freeing up credit to small banks and small businesses. THAT is the primary purpose of the new regulations. It has zero to do with emptying your personal bank account. Other than you, who else is saying such a stupid thing?

The Federal Reserve enables this control - so let's get rid of it.

And allow those ten banks to really run amok? Oh, okay.

A little history. The feds did exactly what it should have done in the type of situation where these banks did NOT have reserves to cover their loans or deposits.

The Federal Reserve, Monetary Policy and the Economy - Everyday Economics - FRB Dallas

Runs and Financial Panic. During a run, even the healthiest and most conservative bank could not redeem all of its notes at once. Banks then, just as now, used most of the money deposited with them to make loans. As a result, the money was not sitting in the banks’ vaults but was circulating in the community. In other words, the banks may have been solvent but not liquid. So when a bank run occurred, many times a bank had to close because it could not exchange the large number of notes presented in a single day.

Bankers tried to prepare for increasing depositor withdrawals by building up their reserves of gold or silver and by restricting credit. They stopped making loans, and panic ensued as everyone scrambled to redeem notes. Businesses had difficulty operating normally. The country’s economic activity slowed, and many people lost their jobs and life savings.

And of course that is exactly what happened.

 

[KissMy]

All the problems with Wall Street could be fixed with 3 rules changes. The SEC did not catch Madoff under Clinton or Bush. Madoff turned himself in. OFHEO, & most republicans tried to stop Fannie but Democrats blocked them. GOVERNMENT IS INCOMPETENT. Enron, Madoff, trading floors & mortgage scams were assisted by Accounting Firms & Ratings Agencies. This is because the criminals chose & pay these agencies based upon their willingness to play ball. Executive pay is determined by Executive selected compensation boards. CORPORATE GOVERNANCE IS IN THE WRONG HANDS.

Shareholders should choose the Accounting Firms, Ratings Agencies, & Executive Compensation. Since it is their money that is on the line they will chose the best & most thorough Accountants & Ratings Professionals. Shareholders hate getting left holding the bag while the Execs glide to safety with their golden parachutes. Investors will chose tight standards & limits on Executive pay that will terminate or claw-back compensation if Execs have raided pension funds or built a house of cards. Shareholders should also decide if new shares, warrants, or options are issued that would dilute their ownership.

Racist Affirmative Action Lending was behind the governments push for no down bad credit loans. The problem was not race but credit ratings.

A study by Freddie Mac, confirming earlier Federal Reserve and FDIC studies, contradicts race discrimination arguments for CRA. The study found that African-Americans with annual incomes of $65,000-$75,000 have on average worse credit records than whites making under $25,000. This showed that the difficulty in qualifying was not because of race but bad credit records. Accordingly, the Federal Reserve Bank of Dallas entitled a paper "Red Lining or Red Herring?"

Instead of having groups like ACORN suing banks & training people how to get lier loans ACORN should train want-a-be borrowers how to be responsible with credit, paying bills, & live within their means thus improve their credit scores.

 

[Toro]

I'm sure another banking crisis is coming, but not for the reasons in the OP. The financial reform bill will mitigate another financial crisis, but Wall Street will find a way to leverage itself up to make enormous profits so they can pay themselves billions of dollars then collapse down knowing that the taxpayer will bail them out. It seems that many think this is OK, so they are opposed to the financial reform bill. Also, the Fed flooding the financial system with enormous amounts of money destabilizes the entire financial system.

 

[Vast LWC]

You people on the right are really, really desperate to block financial reform, aren't you?

The Orwellian tactics you're trying to employ are truly breathtaking in the scope of the pure and utter disregard for facts they employ.

The bank regulation bill will create bailouts!
Goldman shouldn't be investigated because it's "Political"!
Up is Down!
2 + 2 = 5!
War is Peace!

 

[The T]

(Image: EIB)

'Nuff Said on this.

 

[mudwhistle]

You people on the right are really, really desperate to block financial reform, aren't you?

The Orwellian tactics you're trying to employ are truly breathtaking in the scope of the pure and utter disregard for facts they employ.

The bank regulation bill will create bailouts!
Goldman shouldn't be investigated because it's "Political"!
Up is Down!
2 + 2 = 5!
War is Peace!

Problem is we can't trust these assholes.

Everything they do is underhanded....sneaky...and always a friggen secret till it's too late for us to stop them.

 

[FireFly]

All the problems with Wall Street could be fixed with 3 rules changes. The SEC did not catch Madoff under Clinton or Bush. Madoff turned himself in. OFHEO, & most republicans tried to stop Fannie but Democrats blocked them. GOVERNMENT IS INCOMPETENT. Enron, Madoff, trading floors & mortgage scams were assisted by Accounting Firms & Ratings Agencies. This is because the criminals chose & pay these agencies based upon their willingness to play ball. Executive pay is determined by Executive selected compensation boards. CORPORATE GOVERNANCE IS IN THE WRONG HANDS.

Shareholders should choose the Accounting Firms, Ratings Agencies, & Executive Compensation. Since it is their money that is on the line they will chose the best & most thorough Accountants & Ratings Professionals. Shareholders hate getting left holding the bag while the Execs glide to safety with their golden parachutes. Investors will chose tight standards & limits on Executive pay that will terminate or claw-back compensation if Execs have raided pension funds or built a house of cards. Shareholders should also decide if new shares, warrants, or options are issued that would dilute their ownership.

Racist Affirmative Action Lending was behind the governments push for no down bad credit loans. The problem was not race but credit ratings.

A study by Freddie Mac, confirming earlier Federal Reserve and FDIC studies, contradicts race discrimination arguments for CRA. The study found that African-Americans with annual incomes of $65,000-$75,000 have on average worse credit records than whites making under $25,000. This showed that the difficulty in qualifying was not because of race but bad credit records. Accordingly, the Federal Reserve Bank of Dallas entitled a paper "Red Lining or Red Herring?"

Instead of having groups like ACORN suing banks & training people how to get lier loans ACORN should train want-a-be borrowers how to be responsible with credit, paying bills, & live within their means thus improve their credit scores.

This is the best solution I have seen yet. Thanks for this Kiss

 

[Vast LWC]

All the problems with Wall Street could be fixed with 3 rules changes. The SEC did not catch Madoff under Clinton or Bush. Madoff turned himself in. OFHEO, & most republicans tried to stop Fannie but Democrats blocked them. GOVERNMENT IS INCOMPETENT. Enron, Madoff, trading floors & mortgage scams were assisted by Accounting Firms & Ratings Agencies. This is because the criminals chose & pay these agencies based upon their willingness to play ball. Executive pay is determined by Executive selected compensation boards. CORPORATE GOVERNANCE IS IN THE WRONG HANDS.

Shareholders should choose the Accounting Firms, Ratings Agencies, & Executive Compensation. Since it is their money that is on the line they will chose the best & most thorough Accountants & Ratings Professionals. Shareholders hate getting left holding the bag while the Execs glide to safety with their golden parachutes. Investors will chose tight standards & limits on Executive pay that will terminate or claw-back compensation if Execs have raided pension funds or built a house of cards. Shareholders should also decide if new shares, warrants, or options are issued that would dilute their ownership.

Racist Affirmative Action Lending was behind the governments push for no down bad credit loans. The problem was not race but credit ratings.

A study by Freddie Mac, confirming earlier Federal Reserve and FDIC studies, contradicts race discrimination arguments for CRA. The study found that African-Americans with annual incomes of $65,000-$75,000 have on average worse credit records than whites making under $25,000. This showed that the difficulty in qualifying was not because of race but bad credit records. Accordingly, the Federal Reserve Bank of Dallas entitled a paper "Red Lining or Red Herring?"

Instead of having groups like ACORN suing banks & training people how to get lier loans ACORN should train want-a-be borrowers how to be responsible with credit, paying bills, & live within their means thus improve their credit scores.

This is the best solution I have seen yet. Thanks for this Kiss

While I'll have to of course disagree with many of the points made in FireFly's statement, I will say that the last point about community help groups teaching people how to improve their credit instead of arranging for high-risk loans is a good idea.

 

[MaggieMae]

All the problems with Wall Street could be fixed with 3 rules changes. The SEC did not catch Madoff under Clinton or Bush. Madoff turned himself in. OFHEO, & most republicans tried to stop Fannie but Democrats blocked them. GOVERNMENT IS INCOMPETENT. Enron, Madoff, trading floors & mortgage scams were assisted by Accounting Firms & Ratings Agencies. This is because the criminals chose & pay these agencies based upon their willingness to play ball. Executive pay is determined by Executive selected compensation boards. CORPORATE GOVERNANCE IS IN THE WRONG HANDS.

Shareholders should choose the Accounting Firms, Ratings Agencies, & Executive Compensation. Since it is their money that is on the line they will chose the best & most thorough Accountants & Ratings Professionals. Shareholders hate getting left holding the bag while the Execs glide to safety with their golden parachutes. Investors will chose tight standards & limits on Executive pay that will terminate or claw-back compensation if Execs have raided pension funds or built a house of cards. Shareholders should also decide if new shares, warrants, or options are issued that would dilute their ownership.

Racist Affirmative Action Lending was behind the governments push for no down bad credit loans. The problem was not race but credit ratings.

A study by Freddie Mac, confirming earlier Federal Reserve and FDIC studies, contradicts race discrimination arguments for CRA. The study found that African-Americans with annual incomes of $65,000-$75,000 have on average worse credit records than whites making under $25,000. This showed that the difficulty in qualifying was not because of race but bad credit records. Accordingly, the Federal Reserve Bank of Dallas entitled a paper "Red Lining or Red Herring?"

Instead of having groups like ACORN suing banks & training people how to get lier loans ACORN should train want-a-be borrowers how to be responsible with credit, paying bills, & live within their means thus improve their credit scores.

[Sigh...] A day without blaming Acorn (or Fannie & Freddie) for all the nation's woes is like a day without sunshine to some people.