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Buzz
04-16-2010, 11:52 AM
Nice...

http://tpmcafe.talkingpointsmemo.com/2010/04/16/goldman_sachs_fraud/

Stocks taking a nice hit.

david gibson
04-16-2010, 12:23 PM
Nice...

http://tpmcafe.talkingpointsmemo.com/2010/04/16/goldman_sachs_fraud/

Stocks taking a nice hit.

Dodd and Frankeater need to go down as well....

Franco
04-16-2010, 02:13 PM
I am not surprised and this may be just the tip of the iceberg. Goldman Sachs top officials have been walking with billions of tax payer dollars and have avoided investigation/prosecution. As RTF's Henry V exposed a while back, they have had their hand in speculating on oil prices, packaging toxic mortgages and other fraud. It all started when Bill Clinton appointed x-Goldman Sachs Robert Rubin to the Fed. Bernacke should also be investigated. Lets not forget that it was Goldman Sachs that sold AIG billions in toxic loans.
http://www.rollingstone.com/videos/video/28915225/matt_taibbi_breaks_down_goldman_sachs_big_scam

Anyone have the figures of how much Goldman Sachs contributed to Obama's campaign?

Hew
04-16-2010, 02:59 PM
Anyone have the figures of how much Goldman Sachs contributed to Obama's campaign?
In the '08 election cycle 75% of Goldman Sachs money went to Democrats. http://www.opensecrets.org/orgs/summary.php?id=D000000085

Buzz
04-16-2010, 03:10 PM
I am not surprised and this may be just the tip of the iceberg. Goldman Sachs top officials have been walking with billions of tax payer dollars and have avoided investigation/prosecution. As RTF's Henry V exposed a while back, they have had their hand in speculating on oil prices, packaging toxic mortgages and other fraud. It all started when Bill Clinton appointed x-Goldman Sachs Robert Rubin to the Fed. Bernacke should also be investigated. Lets not forget that it was Goldman Sachs that sold AIG billions in toxic loans.
http://www.rollingstone.com/videos/video/28915225/matt_taibbi_breaks_down_goldman_sachs_big_scam

Anyone have the figures of how much Goldman Sachs contributed to Obama's campaign?

Thanks for posting that link again. I remember when it went up here the first time and didn't get around to reading it. I remember when Clinton got props from Wall Street when he appointed Rubin. I clearly remember that as oil was rising on a daily basis, who was being quoted on the likes of MSNBC, Goldman Sachs analysts.


Crap, that just goes to a video. I need to dig up that article...

Franco
04-16-2010, 03:31 PM
Crap, that just goes to a video. I need to dig up that article...



I have the link that goes directly to the article at home and will post later today. Or, get the info from the video and do a search on Rolling Stone.

Hoosier
04-16-2010, 03:35 PM
I think the article was called the Bubble Machine

Hoosier
04-16-2010, 03:37 PM
Here it is

http://www.rollingstone.com/politics/story/28816321/inside_the_great_american_bubble_machine

Franco
04-16-2010, 03:53 PM
The dirty dozen at the time of the article's writing. We can certainly add to the list!
http://www.rollingstone.com/politics/story/26868968/the_dirty_dozen

road kill
04-16-2010, 03:54 PM
Wasn't that loon Beck saying something about this mess some time back????

http://www.youtube.com/watch?v=ERBmoV_WQU8





rk

Franco
04-16-2010, 03:59 PM
Beck must read Rolling Stone since the RS article was our 4 months prior to Beck touching the subjest. And, Michael Savage was on to Goldman Sachs before Rolling Stone.

Goose
04-16-2010, 04:00 PM
"Our assets are our people, capital and reputation. If any of these is ever diminished, the last is the most difficult to restore." What a joke!

Some little 29 year-old turd rips off 'sophisticated' European banks who end up losing a billion dollars? With a synthetic product:) That's great!

Does anybody have a flame thrower?

road kill
04-16-2010, 04:01 PM
Beck must read Rolling Stone since the RS article was our 4 months prior to Beck touching the subjest.

Maybe, but I don't think that Rolling Stone suffered the massive msm abuse, degradation & personal attacks Beck did for approaching the subject.






rk

Franco
04-16-2010, 04:17 PM
[quote=road kill;600407]Maybe, but I don't think that Rolling Stone suffered the massive msm abuse, degradation & personal attacks Beck did for approaching the subject.

[\quote]

Nothing compared to the heat Michael Savage has taken for his exposing of Goldman Sachs, Bosnia (we backed the wrong side) and coroprate bailouts.

I've always thought of Beck as a Savage wanna-be.

road kill
04-16-2010, 04:31 PM
[quote=road kill;600407]Maybe, but I don't think that Rolling Stone suffered the massive msm abuse, degradation & personal attacks Beck did for approaching the subject.

[\quote]

Nothing compared to the heat Michael Savage has taken for his exposing of Goldman Sachs, Bosnia (we backed the wrong side) and coroprate bailouts.

I've always thought of Beck as a Savage wanna-be.
You could be right.....but O'Reilly decided to back Beck!!;-)



rk

cotts135
04-17-2010, 07:15 AM
Goldman Sachs is surely not alone in what could be the greatest theft of all time. Numerous Wall St. banking firms were along for the ride including Cite, JP Morgan Chase and others. I have no doubt that many of the employees within these firms were just pawns of the Board of there respective companies so I think it is important that the focus of these investigations be concentrated on the decision makers.
The lawmakers shaping financial reform must I believe have in their bill 1) Transparency 2) Raise the amount of Capital a company must have on hand 3 address to big to fail and 4) An independent and autonamous regulatory agency which is completely free of political influence to look over the financial markets.
Anything less is a sell out to Wall St. in my opinion

Gerry Clinchy
04-17-2010, 08:32 AM
From the comments section:


A sophisticated discussion would put Magnetar Capital (http://www.nakedcapitalism.com/2010/04/rahm-emanuel-and-magnetar-capital-the-definition-of-compromised.html) in the crosshairs and would look at the difference between going short against subprime CDOs (what Paulson's firm did) and purposefully constructing toxic CDOs and CDO^CDOs to set up "correlation trades" (what Magnetar (http://www.nakedcapitalism.com/2010/04/doth-magnetar-speak-with-forked-tongue.html) did).


Thanks for the links on Magnetar. Why I am not surprised that Rahm seems to be involved up to his neck in this...and thusly Magnetar was a major contributor to the Obama presidential campaign.

floatinghat
04-19-2010, 01:30 PM
Throw them all in jail

aandw
04-19-2010, 02:03 PM
cotts135 "Goldman Sachs is surely not alone in what could be the greatest theft of all time. Numerous Wall St. banking firms were along for the ride including Cite, JP Morgan Chase and others. I have no doubt that many of the employees within these firms were just pawns of the Board of there respective companies so I think it is important that the focus of these investigations be concentrated on the decision makers.
The lawmakers shaping financial reform must I believe have in their bill 1) Transparency 2) Raise the amount of Capital a company must have on hand 3 address to big to fail and 4) An independent and autonamous regulatory agency which is completely free of political influence to look over the financial markets.
Anything less is a sell out to Wall St. in my opinion"[

i think all should be thrown in jail, if they broke the law. your other three points i would agree to, if we apply them to our gov't first.

menmon
04-19-2010, 03:57 PM
I'm sure GS is guilty as charged, but it will be hard to make the case.

Having said this, this fraud is not what hurt American's. What hurt us was unbridled securitizations. In other words, these securities were sold with no concern to if the underlying debt could be repaid.

This is the root of the bad mortages. Had the investment banks had to have held part of these securitization on their balance sheets, they would have cared about credit quality and the high flying mortgage lenders could not have sold them to them.

There is a requirement for these banks to hold part of the debt offering on their balance sheet, so if it passes, someone will be paying attention.

Buzz
04-19-2010, 04:27 PM
Do you mean that in the reform bill, there is a requirement for banks to hold some of the debt on their books instead of selling it lock stock & barrel?

In the past 20 years I have had 2 mortgages. I can't even begin to tell you how many banks have owned them. Last time I built a house was in 2001. I dealt with a small local bank for the construction loan and the mortgage. I made exactly one payment to that bank before getting a letter from Washington Mutual that payments in the future would go to them. Now it's owned by Chase.

menmon
04-19-2010, 04:36 PM
Do you mean that in the reform bill, there is a requirement for banks to hold some of the debt on their books instead of selling it lock stock & barrel?

In the past 20 years I have had 2 mortgages. I can't even begin to tell you how many banks have owned them. Last time I built a house was in 2001. I dealt with a small local bank for the construction loan and the mortgage. I made exactly one payment to that bank before getting a letter from Washington Mutual that payments in the future would go to them. Now it's owned by Chase.

That's right...I think it is calling for them to hold 5%...I like 10%

Cody Covey
04-19-2010, 05:15 PM
Thats not near as bad as student loans. I have had my student loans sold 6 different times in 9 months i have had them. Now its held by the federal government so i guess it won't be getting sold any more.

road kill
04-19-2010, 08:35 PM
Does anyone think "Honest Obe" (after "Honest Abe") will return the $994,000 in campaign contributions he recieved from Goldman Sachs??


I know I'm doubtful.:cool:



rk

Franco
04-19-2010, 08:41 PM
Does anyone think "Honest Obe" (after "Honest Abe") will return the $994,000 in campaign contributions he recieved from Goldman Sachs??


I know I don't think he will.:cool:



rk

I know this, if the Republicans fight Wall Street reform, they will lose points they earned with the public during the Health Care brawl.

Wall Street has been allowed to legally steal billions of dollars. Billions that have long been deposited in foreign banks by the major stock holders and company officials. They have stolen from Pension Funds, stock investors, tax payers, you name it! They did it legally, taking advantage of poorly advised Presidents and with Wall Street insiders making the rules/laws.

BonMallari
04-19-2010, 09:05 PM
the Goldman Sachs debacle is not a Dem or Rep mess its about greed and corruption, you had a very unqualified, inept, corrupt, Chris Cox as the head of the SEC who basically looked the other way, added to the fact he had no idea what he was doing and should not have been placed there by GWB...if he could be strung up for being incompetent the yard arms would already have him swinging..as mentioned before a lot of firms besides GS got fat and the Bernie Madoffs came along and made quick work of the greedy ones

Franco
04-19-2010, 09:25 PM
This is a great prospective on how Wall St/banking reform should be approached. Hoenig is with the Federal Reserve Bank in Kansas City.

http://www.nytimes.com/2010/04/18/opinion/18hoenig.html

and the other investment banks are admitting thier part.
http://blogs.wsj.com/marketbeat/2010/04/19/goldman-sachs-vs-the-sec-what-fellow-wall-streeters-think/?mod=yahoo_free

YardleyLabs
04-20-2010, 04:35 AM
Gallup just published an interesting, but not surprising, poll on the semantics of bank regulation. As noted below, there is strong opposition to the generic notion of greater government regulation of "large banks and financial institutions." However, that opposition melts away when it comes to regulating "Wall Street Banks."

http://sas-origin.onstreammedia.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/rmf3o2k_wecvomek9lhw4w.gif

Matt McKenzie
04-20-2010, 05:38 AM
But of course most Americans don't know what Wall Street is, where it is, or what the financial institutions there do. They just hear sound bites on the news about "Wall Street" and assume it must be bad and it needs to be "fixed".

cotts135
04-20-2010, 07:38 AM
Transparency, Higher Capital requirements for Investment Banks and Regulators who are not in bed or have obvious conflicts of interest with the people they are regulate is what it's needed.
As for to big to fail problem the current Dodd proposal as I understand it only addresses it after it has happened which is totally different then allowing a company to get to big to fail. It is like extinguishing a fire instead of preventing it.

aandw
04-20-2010, 08:28 AM
if they broke the law throw them in jail. if they made a lot of money from risky investment s get over it. if it makes you mad that they did it with bail out money, get over it . we shouldn't have given it to them in the first place. giving those guys money is like giving a gambking addict a slot machine for christmas.

menmon
04-20-2010, 10:24 AM
Their greed is what moves capital to its needed destination. There needs to be financial reform and it needs to begin with systemic risk. Glass Steagall is what prevented it before. The asset back market is a very beneficial market for the public, because it allows for more financing since banks securitize the debt and sell it to the public, but the issuers need to be required to hold a piece of the offerings so that they will not just sell the public debt that is not credit worthy. Leaving it up to the rating agencies to police it has been proven not to work. Capital requirements should be imposed more rigid on the commercial banks and restricting them from risky trading activity. While the investment banks that earn the majority of their money through fees income as opposed to their assets should be able to operate without as much capital, thus allowing them the ability to make markets that are pro growth, and if they don't manage their risk they fail, and someone else picks up their pieces. This way the only people that suffer are the people that own their stock and that is a consious decision.

This free wheeling financial system only began after Glass Steagall was repealed. Investment banks would get in trouble in the past and someone would step up and recapitalize them or they went out of business. The big difference was they were not associated with banks and the publics deposits. When they allowed these big institutions to play in the investment banking world, they put all of our money at risk, leaving us no choice but to bail them out, because all of our savings would have been lost if they had failed. And I assure you they would have if they had not recapitalized them, and it would have made the great depression seem like a small downturn.

You need to ask why the rest of the world bailed their financial institutions out too, before you start making unfounded comments like we should have let them fail. With Glass Steagall, we could have let the poorly managed fail and it would have hurt only those people and the FDIC Insurance would have worked, but $1M trillion in bailout loans that ultimatly will be repaid, is much better than tens of trillions in debt obligations to depositors who had lost everything.

This is serious business, and the party of Status Quo needs to own up that their deregulating agenda is not always the best thing.

Franco
04-20-2010, 10:38 AM
This is serious business, and the party of Status Quo needs to own up that their deregulating agenda is not always the best thing.



Another incorrect assumption. Glass Steagell was repealed under the Clinton Administration in 1999. It may have been authored mostly by Republicans but, it was Willie Clinton that signed it.

In regards to Wall St reform; The Republican plan is much better than the knee-jerk plan the Dems are trying to push through. Just read the two links in my previous post. However, will all the hysteria surrounding reform, the Dems will likley get thier package through and just like Health Care reform, there will be no meaningful debate on the subject. The Dems know that if Health Care or Wall St reform were debated, thier ideas of how to do it would be exposed for the failure that it is.

Hew
04-20-2010, 10:56 AM
The act that repealed portions of the Glass-Steagall Act of '32 was done it '99. It was spearheaded by Clinton Treasury Secretary Robert Rubin (who unbeknownst to anyone at the time was simultenously negotiating with Citicorp to be their CEO). The legislation passed on a bi-partisan vote (90-8 in the Senate) and was signed by Clinton. If, as you claim, the partial repeal of Glass-Steagall is what put us on the road to ruination, then there's more than enough blame to be laid on your heroes' side of the aisle as well.

depittydawg
04-20-2010, 11:38 AM
Apparently it wasn't enough

:)

On a serious note: Goldman Sach's has had a former executive in each of the last 4 administrations that I know of.

menmon
04-20-2010, 11:49 AM
Another incorrect assumption. Glass Steagell was repealed under the Clinton Administration in 1999. It may have been authored mostly by Republicans but, it was Willie Clinton that signed it.

In regards to Wall St reform; The Republican plan is much better than the knee-jerk plan the Dems are trying to push through. Just read the two links in my previous post. However, will all the hysteria surrounding reform, the Dems will likley get thier package through and just like Health Care reform, there will be no meaningful debate on the subject. The Dems know that if Health Care or Wall St reform were debated, thier ideas of how to do it would be exposed for the failure that it is.

You are right Clinton signed it...but we had a majority rebublican congress both houses and a senator from TX named Phil Gramm was the driving force of it and if I remember right, he was McCain's financial advisor during the election.

Don't point me to websites, give me a real arguement about reform, not what football team you want to win. If repubicans had the answers, why didn't they do something before the world came tumbling down?

Franco
04-20-2010, 12:31 PM
Don't point me to websites, give me a real arguement about reform, not what football team you want to win. If repubicans had the answers, why didn't they do something before the world came tumbling down?



The real agruement is on post #27 on this thread with the New York Times link. The Republican plan for reform is better at protecting investors. Too lazy to read it? Or, do you just like making stuff up and throwing it out?

What's the matter, is your football team a looser?

Buzz
04-20-2010, 12:37 PM
What's the matter, is your football team a looser?

Does Houston have a football team?

Oops, I guess they do!

I shouldn't talk, I grew up in Detroit, and for some reason I'm still rooting for them to have a winner again someday... :(

Jim Danis
04-20-2010, 01:00 PM
The lawmakers shaping financial reform must I believe have in their bill 1) Transparency 2) Raise the amount of Capital a company must have on hand 3 address to big to fail and 4) An independent and autonamous regulatory agency which is completely free of political influence to look over the financial markets.
Anything less is a sell out to Wall St. in my opinion

Cotts135 - The last 3 parts of what you believe should stay in the bill are rediculous. Here's why.

2. Raise the amont of Capital a company must have on hand. This is called Risk Retention. Sound good but is disasterous for our housing and finance market. This is why. I am a small Independent Mortgage Banker. I did 200 Million dollars worth of loans last year. Dodd and Frank's bill would require me to retain 5% or in this case $10 Million liquid cash on hand just for that year. The amount of cash required is per years worth of business. Under that model EVERY Independent Mortgage Banker in the country would have to shut their doors. I am not exaggerateing one bit either. Independent Mortgage Bankers originate 40% of all home loans in the country. You will notice I did not say Broker. I am a Banker. Also local community banks would not have enough liquid cash on hand to satisfy those requirements either. They would back out of the home loan business also. The unintended/probal intended consequnce would be that the mortgage market qould be consolidated to only the very largets banks. There are maybe 8 - 10 banks that would have enough liquid assets to meet those requirements. There is a J.P. Morgan study out now that predicts interest rates would increase at least 3% to allow those banks to keep on lending for home loans. What this means is that at todays rates of 5% if the bill passes overnight rates would go to 8% on a 30yr fixed rate mortgage. Also what would happen is that 10's of thousand's of jobs would dissappear over night. There are almost 400,000 people employed in the total mortgage and mortgage related businesses. If the independent mortgage banker has to shut it's doors that would mean that at least 160,000 people would be out of work as soon as the bill is signed by the President.

3. Address too big to fail. Ok now that the mortgage market has consolidated to only 8 - 10 big banks providing home loans the government now has created a "Too Big to fail" situation themselves. This bill allows the Govt. to go in and break up those corporations. So the Govt. now would go in and take over those 8 - 10 largest too big to fail banks and break them up according to the bill. So this means that the Govt. now owns those banks and our whole banking system completely. They wouldn't need to use the TARP $$ issues as an excuse to own the banking system.

4. Creat an independent autonomous regulatory agency. Consumer Finnance Protection Agency. The CFPA would not have pre-emptive authority of any of the banking agencies, ie: FDIC, Treasur, Federal Reserve, OTC, OCC etc. The CFPA would be in addition to those agencies and would not have disciplinary authority. It could only recommend punishment to it's board who would have to consult with the other agencies to dole out punishment. Also the CFPA would only place minimum rules for operation. The individual states would also be allowed to add onto those rules as they see fit. This would creat so much uncertanity in the markets rates would also go up because of that. Businesses, all businesses that lend $$ wouold not know how and what kind of regulations would affect them. What needs to be done is that one of the already existing regulatroy agencies needs to take over regulation. Those regulations need to be preemptive of the states regulations and need to be uniform around the country. This would give the lenders, all types of lenders the security in knowing how to structure their businesses and what rules actually do apply to them. This would also reduce costs greatly meaning reduce rates for all types of loans. CFPA would not be free from political influence in anyway. It's board and employees would just be another part of the Govt. beaurocracy!!

So Financial Regulatory Reform is a very dangerous bill for this country in it's present state. It means a complete take over of the private markets and businesses. It gives the Govt. the right to move into every aspect of the free market and take it over. This is so because 100% of all businesses use credit in some way or another to finance operations. The Govt. would control it all. The title of the bill sounds great but the unintended/intended consequences are very very scary!!

Jim Danis
04-20-2010, 01:03 PM
That's right...I think it is calling for them to hold 5%...I like 10%

No the bill is not calling for that. The bill calls for a mortgage company to hold at least 5% in liquid assets on hand to cover any loan. Loans will still be sold. For example if I do 200 Milliom in loan volume I will have to have at least $10 Million dollars cash in our accounts to cover any potential losses if the loan goes into foreclosure.

Franco
04-20-2010, 02:07 PM
Does Houston have a football team?

Oops, I guess they do!

I shouldn't talk, I grew up in Detroit, and for some reason I'm still rooting for them to have a winner again someday... :(

You and my collegue. His hope springs eternal for the Lions and MLB Tigers.
Heck, the Jets or Texans are my picks to win the AFC next season.;-)
Lions are doing much better, I really like what they have done since Swartz arrived as HC.

YardleyLabs
04-20-2010, 02:08 PM
Cotts135 - The last 3 parts of what you believe should stay in the bill are rediculous. Here's why.

....
From your perspective, what would be a more appropriate way to prevent repetition of the wanton disregard of risk that characterized our mortgage market between 2001 and 2006? I agree that the market was hugely efficient at issuing financing. However, a large part of the efficiency and the profit and the volume resulted directly from the types of transactions that caused to collapse.

It seems to me that the financial system has founded much of its growth on profiting from a level of leverage that is healthy only for the bankers and almost inherently relies on obfuscating the level of risk for those providing the capital.

Henry V
04-20-2010, 02:33 PM
Reform should:
1) Re-separate traditional banks from commercial banks.
2) Move the high-end financiers with their hedge funds, derivatives, credit default swaps, etc. to Atlantic City or Vegas. This stuff is nothing but pure gambling that adds no real wealth to this country and puts the rest of us at risk.

cotts135
04-20-2010, 03:15 PM
Cotts135 - The last 3 parts of what you believe should stay in the bill are rediculous. Here's why.

2. Raise the amont of Capital a company must have on hand. This is called Risk Retention. Sound good but is disasterous for our housing and finance market. This is why. I am a small Independent Mortgage Banker. I did 200 Million dollars worth of loans last year. Dodd and Frank's bill would require me to retain 5% or in this case $10 Million liquid cash on hand just for that year. The amount of cash required is per years worth of business. Under that model EVERY Independent Mortgage Banker in the country would have to shut their doors. I am not exaggerateing one bit either. Independent Mortgage Bankers originate 40% of all home loans in the country. You will notice I did not say Broker. I am a Banker. Also local community banks would not have enough liquid cash on hand to satisfy those requirements either. They would back out of the home loan business also. The unintended/probal intended consequnce would be that the mortgage market qould be consolidated to only the very largets banks. There are maybe 8 - 10 banks that would have enough liquid assets to meet those requirements. There is a J.P. Morgan study out now that predicts interest rates would increase at least 3% to allow those banks to keep on lending for home loans. What this means is that at todays rates of 5% if the bill passes overnight rates would go to 8% on a 30yr fixed rate mortgage. Also what would happen is that 10's of thousand's of jobs would dissappear over night. There are almost 400,000 people employed in the total mortgage and mortgage related businesses. If the independent mortgage banker has to shut it's doors that would mean that at least 160,000 people would be out of work as soon as the bill is signed by the President.

3. Address too big to fail. Ok now that the mortgage market has consolidated to only 8 - 10 big banks providing home loans the government now has created a "Too Big to fail" situation themselves. This bill allows the Govt. to go in and break up those corporations. So the Govt. now would go in and take over those 8 - 10 largest too big to fail banks and break them up according to the bill. So this means that the Govt. now owns those banks and our whole banking system completely. They wouldn't need to use the TARP $$ issues as an excuse to own the banking system.

4. Creat an independent autonomous regulatory agency. Consumer Finnance Protection Agency. The CFPA would not have pre-emptive authority of any of the banking agencies, ie: FDIC, Treasur, Federal Reserve, OTC, OCC etc. The CFPA would be in addition to those agencies and would not have disciplinary authority. It could only recommend punishment to it's board who would have to consult with the other agencies to dole out punishment. Also the CFPA would only place minimum rules for operation. The individual states would also be allowed to add onto those rules as they see fit. This would creat so much uncertanity in the markets rates would also go up because of that. Businesses, all businesses that lend $$ wouold not know how and what kind of regulations would affect them. What needs to be done is that one of the already existing regulatroy agencies needs to take over regulation. Those regulations need to be preemptive of the states regulations and need to be uniform around the country. This would give the lenders, all types of lenders the security in knowing how to structure their businesses and what rules actually do apply to them. This would also reduce costs greatly meaning reduce rates for all types of loans. CFPA would not be free from political influence in anyway. It's board and employees would just be another part of the Govt. beaurocracy!!

So Financial Regulatory Reform is a very dangerous bill for this country in it's present state. It means a complete take over of the private markets and businesses. It gives the Govt. the right to move into every aspect of the free market and take it over. This is so because 100% of all businesses use credit in some way or another to finance operations. The Govt. would control it all. The title of the bill sounds great but the unintended/intended consequences are very very scary!!

Ok you present what seems to be a reasoned argument. I do have a few questions thought. You state that increasing capital requirements would put all independent mortgage reps out of business. Why would that be............do you hold any cash in reserve? And what would be your solution to this? I am assuming that you are completely independent of large Wall st. investment banks and if that is true I would also assume that regulation could be tailored to each type of banking.

8-10 banks providing home loans? Your kidding me right................ There are that many local banks in my area alone providing loans for homes.
On pt #4 I completely agree except I just don't see the Govt controlling all of the banking industry.

menmon
04-20-2010, 03:31 PM
The real agruement is on post #27 on this thread with the New York Times link. The Republican plan for reform is better at protecting investors. Too lazy to read it? Or, do you just like making stuff up and throwing it out?

What's the matter, is your football team a looser?

Tell me why it is better.

road kill
04-20-2010, 03:38 PM
Does anyone know who the defense for Goldman Sachs is???

Anyone??:cool:



rk

Goose
04-20-2010, 04:20 PM
Does anyone know who the defense for Goldman Sachs is???

Anyone??:cool:



rk

A friend of Fidel Castro:)

Franco
04-20-2010, 04:27 PM
Because;

The big banks and investment companies hold a significant advantage in the competition for funds (for example, from depositors and bond holders), because creditors know that they will be bailed out when a crisis occurs. This advantage has systematically undermined the competitive position of every smaller bank, and has enabled the largest banking organizations to more than double their share of industry assets since the 1990s. These trends serve neither the national economy nor local communities. And in the end, they are a burden on taxpayers. Unfortunately, does not eliminate the concept of too-big-to-fail, and it deliberately narrows the central bank’s focus to Wall Street alone.

Also, the proposed financial reform legislation would significantly narrow the supervisory role of the Federal Reserve, so that it would oversee only the very largest institutions, most of which are headquartered in New York City. Congress established the Federal Reserve System in 1913 with 12 banks in a federated structure, like our political system, so that it would include regional perspectives to counterbalance the influence of Wall Street and Washington. To now narrow the Fed’s supervision to just the largest banks would be to devalue those broader perspectives. The Federal Reserve would no longer be the central bank of the United States, but only the central bank of Wall Street.

Obama has the right idea but, the wrong plan again!

BonMallari
04-20-2010, 04:48 PM
Does anyone know who the defense for Goldman Sachs is???

Anyone??:cool:



rk

yup the same lawyer that saved Clinton from getting impeached, former BHO White House counsel Greg Craig....( John Paul Stevens isnt available yet):rolleyes:

dnf777
04-20-2010, 04:51 PM
yup the same lawyer that saved Clinton from getting impeached, former BHO White House counsel Greg Craig....( John Paul Stevens isnt available yet):rolleyes:

How'd ya like to have his retainer fee for this one to put in your IRA?? Or buy bumpers with. You could have one helluva pile, I bet!

Jim Danis
04-20-2010, 05:09 PM
From your perspective, what would be a more appropriate way to prevent repetition of the wanton disregard of risk that characterized our mortgage market between 2001 and 2006? I agree that the market was hugely efficient at issuing financing. However, a large part of the efficiency and the profit and the volume resulted directly from the types of transactions that caused to collapse.

It seems to me that the financial system has founded much of its growth on profiting from a level of leverage that is healthy only for the bankers and almost inherently relies on obfuscating the level of risk for those providing the capital.

What caused the mortgage market collapse started way before 2001. It started with Jimmy Carter and his Community Reinvestment Act. In 1993 Clinton and Cuomo doubled the CRA requirements for depository institutions and then again in 1998. What compounded the problem was the Dems, Barney Frank and Maxine Waters mainly, refusal to reign in Fannie Mae and Freddie Mac in 2003 and 2005. The straw that broke the camels back started in 2003 when the refinance boom ended on June 26th. Interest rates went from 5% to 6.5% in 3 weeks. The refi volume dried up. That initiated the invention of Pay Option Arms, No Doc loans, and Sub Prime 2yr and 3yr Arms. Countrywide was the main outlet for those type of loans. Along with Indy Mac. IndyMac was started by Angelo Mozzilo's son. Mozzilo owned Countrywide. WAMU also piled on top of that pile. Mozzilo also wined and dined the rating agencies and fed them a load of bull about the soundness of those securities to get a AAA rating. That is how those products came to be a relatively big part of the market. As everyone knows they are all gone now. Actually ALL of the companies that did those types of loans are gone now. What is left are the well ran ethical companies doing standard FHA, VA, USDA and Conventional mortgages. How do we keep those products from coming back. 1st off you make sure the rating agencies never rate those products above junk bond status. There will not be a market place for them at all. 2nd you put legislation in place to make sure anyone wanting to purchase a home using such a product has to jump through major hoops to qualify for them. Lastly you make sure that mortgage companies that sell those products can't make a dime off of them. Basically they become loans of last resort.

Buzz
04-20-2010, 05:25 PM
I'm curious where the statistics are to support those claims about CRA?


Some legal and financial experts note that CRA regulated loans tend to be safe and profitable, and that subprime excesses came mainly from institutions not regulated by the CRA. In the February 2008 House hearing, law professor Michael S. Barr, a Treasury Department official under President Clinton,[65][111] stated that a Federal Reserve survey showed that affected institutions considered CRA loans profitable and not overly risky. He noted that approximately 50% of the subprime loans were made by independent mortgage companies that were not regulated by the CRA, and another 25% to 30% came from only partially CRA regulated bank subsidiaries and affiliates. Barr noted that institutions fully regulated by CRA made "perhaps one in four" sub-prime loans, and that "the worst and most widespread abuses occurred in the institutions with the least federal oversight".[112] According to Janet L. Yellen, President of the Federal Reserve Bank of San Francisco, independent mortgage companies made risky "high-priced loans" at more than twice the rate of the banks and thrifts; most CRA loans were responsibly made, and were not the higher-priced loans that have contributed to the current crisis.[113] A 2008 study by Traiger & Hinckley LLP, a law firm that counsels financial institutions on CRA compliance, found that CRA regulated institutions were less likely to make subprime loans, and when they did the interest rates were lower. CRA banks were also half as likely to resell the loans.[114] Emre Ergungor of the Federal Reserve Bank of Cleveland found that there was no statistical difference in foreclosure rates between regulated and less-regulated banks, although a local bank presence resulted in fewer foreclosures.[115]

Jim Danis
04-20-2010, 05:40 PM
Ok you present what seems to be a reasoned argument. I do have a few questions thought. You state that increasing capital requirements would put all independent mortgage reps out of business. Why would that be............do you hold any cash in reserve? And what would be your solution to this? I am assuming that you are completely independent of large Wall st. investment banks and if that is true I would also assume that regulation could be tailored to each type of banking.

8-10 banks providing home loans? Your kidding me right................ There are that many local banks in my area alone providing loans for homes.
On pt #4 I completely agree except I just don't see the Govt controlling all of the banking industry.


This is why the 5% risk retention piece would put all Independent Mortgage Bankers out of business and als cause all but the largest banks to provide mortgage loans. Average net profit on a mortgage loan is only about .5%
Meaning on a $100,000.00 loan net profit runs about $500. The risk retention requirement is a full 5%. Meaning on that same $100,000.00 loan the mortgage company would have to have at least $5000.00 to cover the requirement. There is a $4500.00 difference on the same loan. How is a mortgage company to make up the difference? It's not possible. Like I said earlier I would have to have at least $10 Million in cash in the bank to meet just 1 yrs requirement. If I did the same volume the next year there would be another $10 Million requirement. This is absolutely impossible. There are only 8 - 10 Banks in the country that could meet those requirements. These are nationwide banks. Local community banks will not have the CASH on hand to meet the requirements. They would back out of mortgage lending all together. So with Independent Mortgage Bankers gone and Community and most State Chartered banks backing out of mortgage lending all of that volume is consolidated into the largest banks. The cost of the required CASH is passed on to the consumer. This means that those banks raise the rates to generate the cash. Fewer and Fewer potentially well qualiffied homeowners will no longer qualify because of the higher rates. You add to that the huge job losses and the lack of funding for housing there goes any potential economic recovery.

As far as the Govt. taking over the banking industry they are close now. All of those banks that received TARP monies have pledged stock as collateral against those monies. Meaning the Govt owns some part of those banks. This Regulatory Reform bill makes it infinitely easier for the Govt to come in and take over the banks as they see fit. All they need to do is deem that the bank is showing and unreasonable amount of risk of failure and they take it over.

menmon
04-20-2010, 05:48 PM
I'm curious where the statistics are to support those claims about CRA?

I'll say this much about CRA, every major bank I ever worked for cared about CRA credits, but acheived them by making hospital and church loans, that typically were good credits....more propaganda that CRA is the reason for the mortgage crisis...unbriddled securitization...I could have mortgaged my duck camp and they would have given me a loan, because the holder of the debt did not know what he was holding for collateral. Those that have been to my duck camp, might take it as collateral, but not for its resale value

Jim Danis
04-20-2010, 05:52 PM
I'm curious where the statistics are to support those claims about CRA?

Buzz, I was up on the Hill all last week speaking about this bill. Michael Barr is still with Treasury. We had dinner with him Last Tuesday night. He is vehemently against the Independent Mortgage Banking industry. He basically said in his presentation that this reform bill is designed to run the Independent Mortgagae Banker out of business. Needless to say he was the bell of the ball that night.

The cover stats saying that CRA loans are less risky are just that. Think of it this way. Depositories are required to lend a certain percentage of their overall mortgage volume in CRA designated neighborhoods. They are usually down trodden neighborhoods and the people buying homes in these neighborhoods are in the lower/lower middle class income brackets. They typically have very high debt to income ratios and low credit scores. They do not know how to manage their debt loads. 90% of all conventional loans that go into foreclosure happen with people who have credit scores below 640. Of those loans 100% of the foreclosures that have come about the people have credit scores below 580. I'm not saying if your score is 580 your going into foreclosure. It means that when you look at the foreclosure and run credit that person has a score below 580. By the way depsoitories get double credits for their CRA numbers when they lend in project areas for multi family projects. Even riskier loans.

menmon
04-20-2010, 06:11 PM
Because;

The big banks and investment companies hold a significant advantage in the competition for funds (for example, from depositors and bond holders), because creditors know that they will be bailed out when a crisis occurs. This advantage has systematically undermined the competitive position of every smaller bank, and has enabled the largest banking organizations to more than double their share of industry assets since the 1990s. These trends serve neither the national economy nor local communities. And in the end, they are a burden on taxpayers. Unfortunately, does not eliminate the concept of too-big-to-fail, and it deliberately narrows the central bankís focus to Wall Street alone.

Also, the proposed financial reform legislation would significantly narrow the supervisory role of the Federal Reserve, so that it would oversee only the very largest institutions, most of which are headquartered in New York City. Congress established the Federal Reserve System in 1913 with 12 banks in a federated structure, like our political system, so that it would include regional perspectives to counterbalance the influence of Wall Street and Washington. To now narrow the Fedís supervision to just the largest banks would be to devalue those broader perspectives. The Federal Reserve would no longer be the central bank of the United States, but only the central bank of Wall Street.

Obama has the right idea but, the wrong plan again!

Franco, A Central Bank has been present since Hamilton, but there were times when it got in the way of some politicians agenda. These facts are not acurate, the democrats are trying to give him more jurisdiction and many question that, as I do. The feds role should be to manage the money supply through his various means, and manage the banking system. For the record, this is not the first time we have had banks fail, and the government did not bail them out. They bailed them out this time, because of the risk to the economy. The last time was in the 80s and these failures are what gave banks like Bank of America their wings. Paul Volcker is the only untarnished fed chairman living and he wants Glass Steagall back, but both sides as someone has already stated gets their campaign money from these banks, and Glass Steagall means breaking them up again, which they all oppose. So be carefull who you take your advice from, because most of what you hear is feed to them by the ones with the most to lose.

It disappoints me that the democrats are tiptoeing around what needs done too, but at the end of the day, I think we will get more meaningfull regulation out of the democrats. We need this and I have been one that has benefited from the lack of regulation, so when I say this, it is not political, it is because I don't what people to ever experience this again. If it inhibits a fews ability to make more money, so be it. It is not worth the risk ever again.

depittydawg
04-20-2010, 06:21 PM
Nice try. But not really very accurate. What caused the crash was simple. In 1998 I believe it was, the Republican Congress passed the banking reforms. It was signed by Clinton so it was not a partisan issue. Among other things, this act made it legal to repackage high risk mortgages in CMO's that hid the risk from consumers. Compounding this issue was the reduction in reserves that banks had been required to maintain to protect against rapid market swings, runs and bankruptcies resulting in a cyclical economy.
And finally, as to put the icing on the cake, the Bush Administration carried the "hands off Wall Street" approach to regulation to a new extreme. Eventually, as predicted by a whole lot of people, it finally came crashing to a halt. Of the perpetrators, I believe only Allan Greenspan has openly admitted that what they did, in hindsight, was a huge mistake.
The rest of the scum, are still trying to figure out how to milk the system.

road kill
04-22-2010, 09:51 AM
How cozy.......
http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html





rk

YardleyLabs
04-22-2010, 10:18 AM
What caused the mortgage market collapse started way before 2001. It started with Jimmy Carter and his Community Reinvestment Act. In 1993 Clinton and Cuomo doubled the CRA requirements for depository institutions and then again in 1998. What compounded the problem was the Dems, Barney Frank and Maxine Waters mainly, refusal to reign in Fannie Mae and Freddie Mac in 2003 and 2005. The straw that broke the camels back started in 2003 when the refinance boom ended on June 26th. Interest rates went from 5% to 6.5% in 3 weeks. The refi volume dried up. That initiated the invention of Pay Option Arms, No Doc loans, and Sub Prime 2yr and 3yr Arms. Countrywide was the main outlet for those type of loans. Along with Indy Mac. IndyMac was started by Angelo Mozzilo's son. Mozzilo owned Countrywide. WAMU also piled on top of that pile. Mozzilo also wined and dined the rating agencies and fed them a load of bull about the soundness of those securities to get a AAA rating. That is how those products came to be a relatively big part of the market. As everyone knows they are all gone now. Actually ALL of the companies that did those types of loans are gone now. What is left are the well ran ethical companies doing standard FHA, VA, USDA and Conventional mortgages. How do we keep those products from coming back. 1st off you make sure the rating agencies never rate those products above junk bond status. There will not be a market place for them at all. 2nd you put legislation in place to make sure anyone wanting to purchase a home using such a product has to jump through major hoops to qualify for them. Lastly you make sure that mortgage companies that sell those products can't make a dime off of them. Basically they become loans of last resort.
The only problem with laying blame on a bill passed in 1993 is that no mortgages issued prior to 2001 played a significant role in the financial collapse. The fact is that those mortgages were a trivial part of the market until unbridled securitization of the mortgage market resulted in more and more esoteric vehicles for expanding capital investments while concealing risk. Virtually every mortgage in the country was refinanced and there was still so much capital lying around waiting to be lost that financial institutions became the biggest lobbyists for eliminating all barriers to the investment instruments that killed the golden goose. Yes, it is possible to find instances of people asking for greater control over Freddie and Fannie, but it was never anyone's priority. Instead, the Bush administration preferred to focus on the miracle of the new ownership society and to take credit for al those new home owners. Too many people weremaking too much money writing checks that no one could afford to cash, and high on the list of abusers were mortgage bankers writing hundreds of million in loans for which they held no real liability. Given that we had a massive industry that expanded to make it possible to flip mortgages in the blink of an eye, contributing to the bubble that popped, why should we now worry about a regulatory structure that might hurt that industry by making repetition impossible? We don't recover by recreating the same circumstances that led to collapse. All that will happen is another collapse. For the same reason, recovery in the housing market is not measured by having prices return to their former levels. Those levels were insane.

Recovery happens when we have fully absorbed the losses brought on by speculative borrowing and speculative lending so that market values can find their economic level. The market can then resume normal levels of trading which will be far lower than what was seen during the bubble. People that bought overvalued houses will lose their investments. Banks that wrote mortgages that are now far greater than the value of the properties will be stuck with the write-offs. Governments that saw tax receipts soar on the wings of inflated real estate values have already seen their revenues plummet. It will be years before the are able to recover from the impact. All of these are parts of the cost of a busted bubble. It's worth some effort to avoid creating another one.

M&K's Retrievers
04-22-2010, 10:48 AM
How cozy.......
http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html





rk

This might be fun to watch as it plays out.

Eric Johnson
04-22-2010, 11:27 AM
This stuff is beyond me but I have to ask....why are Freddie and Fannie being excluded from any attempt at reform?

Eric