Should the Glass Steagall Act be brought back?

[Dad2three]

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

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

Weird you don't know BUSH ADMIN WAS REGULATOR OF F/F 2001-2009. Executive branch! WHO do you think FORCED F/F to purchase $440 BILLION in MBS's in 2002 to meet THEIR 'housing goals'?


One president controlled the regulators that not only let banks stop checking income but cheered them on. And as president Bush could enact the very policies that caused the Bush Mortgage Bubble and he did. And his party controlled congress.


HERE WAS BUSH IN 2004 FORCING F/F TO UP THEIR GOALS FROM 50% TO 56% 'LOW INCOME'


"(In 2000, CLINTON) HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay."

How HUD Mortgage Policy Fed The Crisis

"In 2004 (BUSH) , the 2000 rules were dropped and high‐risk loans were again counted toward affordable housing goals."


http://www.prmia.org/sites/default/files/references/Fannie_Mae_and_Freddie_Mac_090911_v2.pdf


June 17, 2004

Builders to fight Bush's low-income plan

Groups ask HUD to rethink plan that would increase financing of homes to low-income people.




Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.



Home builders fight Bush's low-income housing - Jun. 17, 2004

 

[Contumacious]

WORLD WIDE CREDIT BUBBLE AND BUST. Let me guess, the federal reserves worked together? lol

Yes, LOL

The Great Depression was a severe ****worldwide***** economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s.[1] It was the longest, deepest, and most widespread depression of the 20th century.[2]


Unfortunately the retards peg their currency to the dollar.

.

 

[Dad2three]

The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation.

Excuse me dingle berry

In 2007 the Federal Government fully controlled banking and credit via the Federal Reserve Board,

So either you do not know the meaning of deregulation or you have gone full retard.

.

Got it Bubba, you 'believe in' free markets that NEVER existed or ever will, and the closest time was when the US had a major recession every 3-5 years 1800-1913 somewhere in the US... How many bank failures from the start of FDIC until Reagan ignoring regulator warnings?



Weird how Banksters did a WORLD WIDE PONZI SCHEME ON US (AIDED BY DUBYA) AND YOU THINK IT WAS GOV'T? LOL


Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."

Q HOLY JESUS! DID YOU JUST PROVE THAT OVER 50 % OF ALL MORTGAGES IN 2006 DIDN’T REQUIRE BORROWERS TO DOCUMENT THEIR INCOME?!?!?!?

A Yes.

Q WHO THE HELL LOANS HUNDREDS OF THOUSANDS OF DOLLARS TO PEOPLE WITHOUT CHECKING THEIR INCOMES?!?!?

A Banks.

Q WHY??!?!!!?!

A Two reasons, greed and Bush's regulators let them.


FRB: Finance and Economics Discussion Series: Screen Reader Version - 200899

 

[Dad2three]

WORLD WIDE CREDIT BUBBLE AND BUST. Let me guess, the federal reserves worked together? lol

Yes, LOL

The Great Depression was a severe ****worldwide***** economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s.[1] It was the longest, deepest, and most widespread depression of the 20th century.[2]


Unfortunately the retards peg their currency to the dollar.

.

Got it ASSHOLES hang onto AEI and Lew rockwell talking points!

 

[eagle1462010]

Private sector loans, not Fannie or Freddie, triggered crisis

Fannie and Freddie

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

.

Got it,. MORE MYTHS


Weird, the GSE's worked for 70 years to bring about higher home ownership rates, what happened?

Center for Public Integrity reported in 2011, mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie.


Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf



Conservative Ideas Can't Escape Blame for the Financial Crisis


The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed


Politics Most Blatant | Center for American Progress

The CRA happened under Clinton. Then he appointed a lot of new Dems to manage it.

Then under Bush, this happened.

Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. In fact, it was Congress that flatly rejected President Bush's call more than five years ago to reform the GSEs. Over the years, the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.

Continue reading all the requests and rejections of regulating the GSE's and Democratic Responses.

17 ATTEMPTS to regulate GSE's

 

[Contumacious]

Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."[/B]

So much bullshit, so little time.

The Government-Created Subprime Mortgage Meltdown

The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

.

 

[Dad2three]

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


First off, there was never any point at which there were no rules. Never. Sorry, didn't happen.

Second, when you buy a bond, a bond is basically you loaning money to someone else, instead of someone loaning you money.

I was using a very loose definition of 'loan'. Banks give money to things they think will earn them back more money than they give.

That's how the entire financial system works.

But regardless of all of that..........

I stand by my original question:

Name for me more than one bank that would have been prevented from crashing during the sub-prime melt down, because of Glass-Steagall.

I know of only one bank that even would have been AFFECTED by Glass Steagall, and there is little chance it would not have crashed even with it.

WTF2? How was GS supposed to stop the S&L crash when they weren't under banking rules and thus could offer interest rates banks could not. The " 70's housing crash"...WTF does that have to do with banking rules? And BONDS? Bonds are issued by government entities not banks! Seriously, you're blithering and wasting our time.

It's funny, because everyone says this stuff, and then when I read about it, the opposite is true.

Savings and Loan Crisis: The Concise Encyclopedia of Economics | Library of Economics and Liberty

Regulation Q was extended to S&Ls.
Usury laws were extended to S&Ls.
Restrictions on branching, prevented S&Ls from diversifying.

Over and over, regulations caused the S&Ls to die. Not to mention Freddie and Fannie undercutting the S&Ls, even while interest rates on deposits were still high from the 1970s.

Again.... I am asking a question... which banks would you point to, that Glass Steagall would have prevented from crashing? Name them.

OVER REGULATION CAUSED THE S&L CRISIS? Wow I thought I heard everything from wing nuts!


The Savings and Loans Crisis in the late 1980s resulted in the bankruptcy of half of the Savings and Loan banks in the U.S


What both the S&L crisis and current financial crisis share are their root causes: Clever manipulation of the banking system that allowed financial firms to reap huge profits while shifting the risks, and ultimately the costs, onto taxpayers. Deregulation allowed S&Ls to deviate dramatically from their fiscally conservative missions, and that deviation led them to create all sorts of investments that purported to generate higher returns but were really just bad deals.

Today's Financial Meltdown Vs. the 1990s S&L Crisis: Which Was Worse? - DailyFinance


The former chairman of the Federal Home Loan Bank Board yesterday called the national savings and loan crisis a tragic "debacle" that didn't have to happen.

In a fiery speech similar to others he has delivered in recent months, Edwin J. Gray strongly defended his role in the crisis and blasted Congress and the Reagan administration, quoting specific dates on which he warned government officials of the impending disaster.


S&l Crisis Avoidable, Ex-thrift Official Says - Morning Call

 

[Contumacious]

WORLD WIDE CREDIT BUBBLE AND BUST. Let me guess, the federal reserves worked together? lol

Yes, LOL

The Great Depression was a severe ****worldwide***** economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in 1930 and lasted until the late 1930s or middle 1940s.[1] It was the longest, deepest, and most widespread depression of the 20th century.[2]


Unfortunately the retards peg their currency to the dollar.

.

Got it ASSHOLES hang onto AEI and Lew rockwell talking points!

Got it CUM SWALLOWER, hang onto The Communist Manifesto and Obama's talking points.

.

.

 

[Dad2three]

Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."[/B]

So much bullshit, so little time.

The Government-Created Subprime Mortgage Meltdown

The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

.

Got it, You'll hang onto discredited AEI talking points


Private sector loans, not Fannie or Freddie, triggered crisis


The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets

Private sector loans, not Fannie or Freddie, triggered crisis | Economics | McClatchy DC



Most subprime lenders weren't subject to federal lending law

Community Reinvestment Act, blamed for home market crash, didn't apply to the banks that did the most lending.


BANKSTER:

Bob Davis, executive vice president of the American Bankers Association, which lobbies Congress to streamline community reinvestment rules, said "it just isn't credible" to blame the law CRA for the crisis.

"Institutions that are subject to CRA - that is, banks and savings asociations - were largely not involved in subprime lending," Davis said. "The bulk of the loans came through a channel that was not subject to CRA."

Most subprime lenders weren't subject to federal lending law - The Orange County Register


The historical "originate and hold" mortgage model was replaced with the "originate and distribute" model. Incentives were such that you could get paid just to originate and sell the mortgages down the pipeline, passing the risk along. The big investment banks simply connected the investors to the originators, helped by the AAA ratings




Nobody forced the big five investment banks to do what they did; they were not subject to CRA or other regulations common to depository banks. In fact, they mainly bought and sold loans rather than originate them. They did it because they thought they would make money.




Given CEOs' proclivity for government bashing, any lenders being driven to write bad loans by the CRA would have been on CNBC screaming at the top of their lungs.

But that dog that didn't bark.




The same exact thing happened at the exact same time in the sub prime auto finance business. And it was done by the same exact people. Difference is that there are buybacks in auto finance ABSs much stricter than in the mortgage industry.



Out of Control Financial Innovation


By now the litany is familiar: the old model of banking, in which banks held on to the loans they made, was replaced by the new practice of originate-and-distribute. Mortgage originators—which in many cases had no traditional banking business—made loans to buy houses, then quickly sold those loans off to other firms. These firms then repackaged those loans by pooling them, then selling shares of these pools of securities; and rating agencies were willing to label the resulting product chicken—that is, to bestow their seal of approval, the AAA rating, on the more senior of these securities, those that had first claim on interest and principal repayment.

Everyone ignored both the risks posed by a general housing bust and the degradation of underwriting standards as the bubble inflated (that ignorance was no doubt assisted by the huge amounts of money being made). When the bust came, much of that AAA paper turned out to be worth just pennies on the dollar.




The Slump Goes On: Why? by Paul Krugman and Robin Wells | The New York Review of Books

 

[Dad2three]

Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."[/B]

So much bullshit, so little time.

The Government-Created Subprime Mortgage Meltdown

The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

.

Examining the big lie: How the facts of the economic crisis stack up


The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.


A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.” It is highly unlikely that a simultaneous boom and bust everywhere else in the world was caused by one set of factors (ultra-low rates, securitized AAA-rated subprime, derivatives) but had a different set of causes in the United States. Indeed, this might be the biggest obstacle to pushing the false narrative.





•Nonbank mortgage underwriting exploded from 2001 to 2007, along with the private label securitization market, which eclipsed Fannie and Freddie during the boom.



Private lenders not subject to congressional regulations collapsed lending standards.




Examining the big lie: How the facts of the economic crisis stack up | The Big Picture


IDIOT

 

[Contumacious]

Another form of easing facilitated the rapid rise of mortgages that didn't require borrowers to fully document their incomes. In 2006, these low- or no-doc loans comprised 81 percent of near-prime, 55 percent of jumbo, 50 percent of subprime and 36 percent of prime securitized mortgages."[/B]

So much bullshit, so little time.

The Government-Created Subprime Mortgage Meltdown

The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

.

Got it, You'll hang onto discredited AEI talking points


Private sector loans, not Fannie or Freddie, triggered crisis

Easy does it Vern.

Is it a FACT that the 1977 Community Reinvestment Act (CRA), compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.?


.

 

[Dad2three]

Fannie and Freddie

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

.

Got it,. MORE MYTHS


Weird, the GSE's worked for 70 years to bring about higher home ownership rates, what happened?

Center for Public Integrity reported in 2011, mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie.


Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf



Conservative Ideas Can't Escape Blame for the Financial Crisis


The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed


Politics Most Blatant | Center for American Progress

The CRA happened under Clinton. Then he appointed a lot of new Dems to manage it.

Then under Bush, this happened.

Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. In fact, it was Congress that flatly rejected President Bush's call more than five years ago to reform the GSEs. Over the years, the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.

Continue reading all the requests and rejections of regulating the GSE's and Democratic Responses.

17 ATTEMPTS to regulate GSE's

Got it, CRA had NOTHING to do with Bush's Subprime crisis


BANKSTER:

Bob Davis, executive vice president of the American Bankers Association, which lobbies Congress to streamline community reinvestment rules, said "it just isn't credible" to blame the law CRA for the crisis.

"Institutions that are subject to CRA - that is, banks and savings asociations - were largely not involved in subprime lending," Davis said. "The bulk of the loans came through a channel that was not subject to CRA."



Most subprime lenders weren't subject to federal lending law - The Orange County Register




WEIRD, YOU SAYING THE GOP CONGRESS IGNORED DUBYA'S 'WARNINGS'? LOL



Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac.


Oxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch


Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,



The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley (R), now vice-chairman of Nasdaq.”

“What did we get from the White House? We got a one-finger salute.”


STATEMENT OF ADMINISTRATION POLICY

The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers.

George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005

Yes, he said he was against it because it "would lessen the housing GSEs' commitment to low-income homebuyers"


LOL

June 17, 2004


NEW YORK (CNN/Money) - Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.



LOL

Home builders fight Bush's low-income housing - Jun. 17, 2004




Bush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform). And then he stopped it again. A million quotes cant change that.



Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s 2004

“
Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“

 

[Dad2three]

So much bullshit, so little time.

The Government-Created Subprime Mortgage Meltdown

The thousands of mortgage defaults and foreclosures in the "subprime" housing market (i.e., mortgage holders with poor credit ratings) is the direct result of thirty years of government policy that has forced banks to make bad loans to un-creditworthy borrowers. The policy in question is the 1977 Community Reinvestment Act (CRA), which compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.

.

Got it, You'll hang onto discredited AEI talking points


Private sector loans, not Fannie or Freddie, triggered crisis

Easy does it Vern.

Is it a FACT that the 1977 Community Reinvestment Act (CRA), compels banks to make loans to low-income borrowers and in what the supporters of the Act call "communities of color" that they might not otherwise make based on purely economic criteria.?


.

RIGHT WING GARBAGE. I'm shocked



George W. Bush was a major proponent of the kind of mortgages that banks had started making under the CRA. He urged low-to-no doc mortgages and the elimination of downpayments, just like the CRA regulators had long done. “We certainly don't want there to be a fine print preventing people from owning their home,” the President said in a 2002 speech. “We can change the print, and we've got to.”




Given CEOs' proclivity for government bashing, any lenders being driven to write bad loans by the CRA would have been on CNBC screaming at the top of their lungs.

But that dog that didn't bark.






CRA had little to do with the Subprime Crisis.Less than 6% of all foreclosures since 2006.


Big Lie is, blaming someone else. Then you activate your PR groups, starting with Fox and the RW think tanks. Then you go further and have the Wallisons of the world throw pure bs into the mix. Stir frequently.


The same exact thing happened at the exact same time in the sub prime auto finance business. And it was done by the same exact people. Difference is that there are buybacks in auto finance ABSs much stricter than in the mortgage industry.

The big players all went down. HSBC lost billions and went out of the business. Americredit all but went bankrupt and only survived with a buyout. Cap One went through the basement and was only kept alive because of their credit card profits. Dozens of others, some backed by huge corps, went under.

Needless to say, there was no CRA for auto finance, and there was no government car ownership policies for them to blame.

All by themselves, the investment banks created systemic risk, and that risk ruined them in the auto finance market.

Sadly, the same thing did not happen in the mortgage market.

 

[eagle1462010]

Gramm?Leach?Bliley Act - Wikipedia, the free encyclopedia

On November 4, the final bill resolving the differences was passed by the Senate 90–8,[16][note 4] and by the House 362–57.[17][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999.[18]

This removed a key provision in the Glass Steagall Act. It was supported by both sides and signed by Clinton. It allowed mergers between Commercial and Investment banks which were illegal before this time. They had already granted waivers to companies like Citigroup to merge combining commercial and Investment banking. This helped create more Too big to fail companies Most of the mergers were at the heart of the crisis as the ones that needed to be saved after the crash.

The Enron loop hole was formed, and the Too Big to Fail companies were now SELF REGULATED. They were able to trade out of SEC controls, as regulators were taken out of the loop.

Add in these factors................CRA under new management and now lowering the standards on home ownership loans. GSE's went postal as the Gov't was on the hook for much of the loans........So these loans went up by a factor of 10.

Enter the Feds Back Door, with Commercial Banking were they have a Fiat Currency creating machine and the speculation went to the next universe.


We allowed them off of a leash. The Gov't basically ordered them to loan. We gave them a Fiat Currency to play with.............

and then they crashed the dang system........................

Our Gov't fucked up with the laws...............Then we refused to look at the damage ongoing saying it wasn't happening, and then we nearly had another Great Depression.

It's not over, as the fix is the same dang thing that got us here. They have jacked up the markets again on Fiat Currency, and we are headed for a bigger fall.

 

[Dad2three]

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

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

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

They did. S&Ls were making, and keeping mortgages. They were not sold to Fannie and Freddie. Countrywide too, held mortgages, although they sold most.

Based on the preceding discussion, we would argue that the proximate causes of the crisis can be found in two shifts in the structure of the mortgage finance field. First, the easy credit available to all forms of financial investors after 2000 meant that money could be made by borrowing money at a low interest rate and then turning around and buying MBS.

This process of leveraging was the core strategy of banks and many other financial institutions. Investors worldwide
who were not leveraged were also searching for higher, but safe returns and American mortgages looked good to them. These strategies brough t all of the major banks aggressively into mortgage securitization, and brought mortgage securitization to the center of the financial sector. It also made the financial position of these firms especially sensitive to the credit markets that would become
negatively impacted by the core of the market, along with millions of households and the rest of the American economy.

The steep decline in mortgage originations after 2003 reflected neither weakness in the housing market nor slackening demand from the secondary market. Rather, a saturated prime market and an interest rate hike led to a significant drop off in the refinancing activity that had driven the 2003 boom


The second cause (which is not well understood) is as important as the first. By 2004, there were simply not enough prime or conventional mortgages left in the U.S. to package into MBS


So, while those who had money to buy MBS were looking for product, those who were originating and packaging MBS lacked enough to sell them. This meant that there wa
s a huge incentive to increase the number of mortgages. This incentive sent loan originators looking for new mortgage markets to feed the securitization machine and led to the rapid growth of the subprime and Alt-A markets.

The aggressive pursuit of those markets by banks of all kinds has led us to the current situation. The main role that regulators played was to refuse to intervene into these markets


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

 

[eagle1462010]

Got it,. MORE MYTHS


Weird, the GSE's worked for 70 years to bring about higher home ownership rates, what happened?

Center for Public Integrity reported in 2011, mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie.


Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf



Conservative Ideas Can't Escape Blame for the Financial Crisis


The onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.

Predictably, many conservatives sought to blame the bogeymen they always blamed


Politics Most Blatant | Center for American Progress

The CRA happened under Clinton. Then he appointed a lot of new Dems to manage it.

Then under Bush, this happened.

Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. In fact, it was Congress that flatly rejected President Bush's call more than five years ago to reform the GSEs. Over the years, the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.

Continue reading all the requests and rejections of regulating the GSE's and Democratic Responses.

17 ATTEMPTS to regulate GSE's

Got it, CRA had NOTHING to do with Bush's Subprime crisis


BANKSTER:

Bob Davis, executive vice president of the American Bankers Association, which lobbies Congress to streamline community reinvestment rules, said "it just isn't credible" to blame the law CRA for the crisis.

"Institutions that are subject to CRA - that is, banks and savings asociations - were largely not involved in subprime lending," Davis said. "The bulk of the loans came through a channel that was not subject to CRA."



Most subprime lenders weren't subject to federal lending law - The Orange County Register




WEIRD, YOU SAYING THE GOP CONGRESS IGNORED DUBYA'S 'WARNINGS'? LOL



Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac.


Oxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch


Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,



The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley (R), now vice-chairman of Nasdaq.”

“What did we get from the White House? We got a one-finger salute.”


STATEMENT OF ADMINISTRATION POLICY

The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers.

George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005

Yes, he said he was against it because it "would lessen the housing GSEs' commitment to low-income homebuyers"


LOL

June 17, 2004


NEW YORK (CNN/Money) - Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.



LOL

Home builders fight Bush's low-income housing - Jun. 17, 2004




Bush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform). And then he stopped it again. A million quotes cant change that.



Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s 2004

“
Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“

The CRA did take part in the crash, because of GSE's.............You are spouting the Democratic response to their part in the crash..........

In other words, they Lied their asses off saying they didn't do it, which is the same as you are doing now.

Allowing the banks to merge, and use commercial assets was BS. It was voted for by Dems and Reps. It was signed by Clinton. Graham pushed it to the extreme for self serving measures.

IT ALLOWED SELF REGULATION IN THE MARKETS..................

And the rest is history.

At a minimum, the GLA should be repealed, but at a maximum the Glass Steagall act should be restored.

 

[Dad2three]

Gramm?Leach?Bliley Act - Wikipedia, the free encyclopedia

On November 4, the final bill resolving the differences was passed by the Senate 90–8,[16][note 4] and by the House 362–57.[17][note 5] The legislation was signed into law by President Bill Clinton on November 12, 1999.[18]

This removed a key provision in the Glass Steagall Act. It was supported by both sides and signed by Clinton. It allowed mergers between Commercial and Investment banks which were illegal before this time. They had already granted waivers to companies like Citigroup to merge combining commercial and Investment banking. This helped create more Too big to fail companies Most of the mergers were at the heart of the crisis as the ones that needed to be saved after the crash.

The Enron loop hole was formed, and the Too Big to Fail companies were now SELF REGULATED. They were able to trade out of SEC controls, as regulators were taken out of the loop.

Add in these factors................CRA under new management and now lowering the standards on home ownership loans. GSE's went postal as the Gov't was on the hook for much of the loans........So these loans went up by a factor of 10.

Enter the Feds Back Door, with Commercial Banking were they have a Fiat Currency creating machine and the speculation went to the next universe.


We allowed them off of a leash. The Gov't basically ordered them to loan. We gave them a Fiat Currency to play with.............

and then they crashed the dang system........................

Our Gov't fucked up with the laws...............Then we refused to look at the damage ongoing saying it wasn't happening, and then we nearly had another Great Depression.

It's not over, as the fix is the same dang thing that got us here. They have jacked up the markets again on Fiat Currency, and we are headed for a bigger fall.

GAWD, RIGHT WING GARBAGE. I'm shocked

Only thing Gov't did was ignore REGULATOR warnings and DUBYA forced F/F to buy up $440 BILLION in MBS's to meet his goals'. Those MBS's CAME from the private sector




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

More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations.


The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations.


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




What caused the financial crisis? The Big Lie goes viral

One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.

Rather than admit the error of their ways — Repent! — these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so.


What caused the financial crisis? The Big Lie goes viral - The Washington Post




Examining the big lie: How the facts of the economic crisis stack up


The boom and bust was global. Proponents of the Big Lie ignore the worldwide nature of the housing boom and bust.

A McKinsey Global Institute report noted “from 2000 through 2007, a remarkable run-up in global home prices occurred.” It is highly unlikely that a simultaneous boom and bust everywhere else in the world was caused by one set of factors (ultra-low rates, securitized AAA-rated subprime, derivatives) but had a different set of causes in the United States. Indeed, this might be the biggest obstacle to pushing the false narrative.


Examining the big lie: How the facts of the economic crisis stack up | The Big Picture

 

[Dad2three]

The CRA happened under Clinton. Then he appointed a lot of new Dems to manage it.

Then under Bush, this happened.

Setting the Record Straight: Six Years of Unheeded Warnings for GSE Reform

Over the past six years, the President and his Administration have not only warned of the systemic consequences of failure to reform GSEs but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. In fact, it was Congress that flatly rejected President Bush's call more than five years ago to reform the GSEs. Over the years, the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems with the GSEs.

Continue reading all the requests and rejections of regulating the GSE's and Democratic Responses.

17 ATTEMPTS to regulate GSE's

Got it, CRA had NOTHING to do with Bush's Subprime crisis


BANKSTER:

Bob Davis, executive vice president of the American Bankers Association, which lobbies Congress to streamline community reinvestment rules, said "it just isn't credible" to blame the law CRA for the crisis.

"Institutions that are subject to CRA - that is, banks and savings asociations - were largely not involved in subprime lending," Davis said. "The bulk of the loans came through a channel that was not subject to CRA."



Most subprime lenders weren't subject to federal lending law - The Orange County Register




WEIRD, YOU SAYING THE GOP CONGRESS IGNORED DUBYA'S 'WARNINGS'? LOL



Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac.


Oxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch


Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,



The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley (R), now vice-chairman of Nasdaq.”

“What did we get from the White House? We got a one-finger salute.”


STATEMENT OF ADMINISTRATION POLICY

The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers.

George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005

Yes, he said he was against it because it "would lessen the housing GSEs' commitment to low-income homebuyers"


LOL

June 17, 2004


NEW YORK (CNN/Money) - Home builders, realtors and others are preparing to fight a Bush administration plan that would require Fannie Mae and Freddie Mac to increase financing of homes for low-income people, a home builder group said Thursday.



LOL

Home builders fight Bush's low-income housing - Jun. 17, 2004




Bush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform). And then he stopped it again. A million quotes cant change that.



Testimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s 2004

“
Mr. Frank: ...Are we in a crisis now with these entities?

Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“

The CRA did take part in the crash, because of GSE's.............You are spouting the Democratic response to their part in the crash..........

In other words, they Lied their asses off saying they didn't do it, which is the same as you are doing now.

Allowing the banks to merge, and use commercial assets was BS. It was voted for by Dems and Reps. It was signed by Clinton. Graham pushed it to the extreme for self serving measures.

IT ALLOWED SELF REGULATION IN THE MARKETS..................

And the rest is history.

At a minimum, the GLA should be repealed, but at a maximum the Glass Steagall act should be restored.

Loans that were under government regulation did better than private loans, especially if they were regulated by the "Community Reinvestment Act."


Center for Public Integrity reported in 2011, mortgages financed by Wall Street from 2001 to 2008 were 4½ times more likely to be seriously delinquent than mortgages backed by Fannie and Freddie


Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

 

[eagle1462010]

Dad...........You are touting your usual BS on it's all Bush's fault and that the Dems had no part in the meltdown.

That is BS. Period.

Your side voted to allow Self Regulation in the banking system.
Same as the GOP.

Your side voted to end the restrictions of the Glass Steagall Act.
Same as the GOP.

Both sides created this mess, and removed the regulations. They both agreed to allow the mergers and were openly granting waivers to allow these mergers before the law was passed.

Under Clinton, what gave them the right to allow mergers that were against the law...................

Face it. Our Gov't allowed the lobbyist bankers to manipulate our regulations so they could play with commercial Fiat Currency in the Markets and they fucked the entire economy.

Under the Constitution our Gov't is tasked with regulating Interstate Commerce, and Global Commerce.

They were, and still are, MISERABLE FAILURES at their job. And we still keep electing them and allow them to make up excuses for their failures.

Same as now.

 

[Dad2three]

Dad...........You are touting your usual BS on it's all Bush's fault and that the Dems had no part in the meltdown.

That is BS. Period.

Your side voted to allow Self Regulation in the banking system.
Same as the GOP.

Your side voted to end the restrictions of the Glass Steagall Act.
Same as the GOP.

Both sides created this mess, and removed the regulations. They both agreed to allow the mergers and were openly granting waivers to allow these mergers before the law was passed.

Under Clinton, what gave them the right to allow mergers that were against the law...................

Face it. Our Gov't allowed the lobbyist bankers to manipulate our regulations so they could play with commercial Fiat Currency in the Markets and they fucked the entire economy.

Under the Constitution our Gov't is tasked with regulating Interstate Commerce, and Global Commerce.

They were, and still are, MISERABLE FAILURES at their job. And we still keep electing them and allow them to make up excuses for their failures.

Same as now.

Got it, 'both sides' meme

Government has encouraged home ownership for decades; why suddenly in 2002-07 was it so important?


Which branch of Gov't was in charge of the SEC, FBI, HUD, GSE'S, ETC FROM 2001-2009?


Right-wingers Want To Erase How George Bush's "Homeowner Society" Helped Cause The Economic Collapse


2004 Republican Convention:

Another priority for a new term is to build an ownership society, because ownership brings security and dignity and independence.
...

Thanks to our policies, home ownership in America is at an all- time high.

(APPLAUSE)

Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."




The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets OCT 2008



DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!
Eliot Spitzer - Predatory Lenders' Partner in Crime


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


A top official warned of widening mortgage fraud in 2004, but the agency focused its resources elsewhere.

"It has the potential to be an epidemic,"



They ended up with fewer resources, rather than more.


FBI saw threat of loan crisis - Los Angeles Times


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

The SEC Rule That Broke Wall Street

The SEC Rule That Broke Wall Street



Bush drive for home ownership fueled housing bubble


He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.

Concerned that down payments were a barrier, Bush persuaded Congress to spend as much as $200 million a year to help first-time buyers with down payments and closing costs.

And he pushed to allow first-time buyers to qualify for government insured mortgages with no money down



How George Bush and the Private Mortgage Market Created The Perfect Storm


Conclusion: Even though Fannie, Freddie and FHA had much less to do with new loans in the Bush administration they bought huge amounts of MBS in those years to meet President Bush’s 56% housing requirement.

Additionally, the President encouraged the GSEs to “focus” their “core housing mission” “with respect to low-income Americans and first-time homebuyers” in the following statement from the White House,

The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers.[xix]

Conclusion: President Bush had directed HUD to require the GSEs to meet the 56% low income housing requirement. This pressured the GSEs to buy massive MBS. This created a massive market for junk mortgages.



How George Bush and the Private Mortgage Market Created The Perfect Storm | Musings




One president controlled the regulators that not only let banks stop checking income but cheered them on. And as president Bush could enact the very policies that caused the Bush Mortgage Bubble and he did. And his party controlled congress.


REGULATOR FAILURE OF DUBYA, NOT REGULATION FAILURE CAUSED DUBYA'S SUB PRIME CRASH