Geithner Lied Under Oath - Administration in Bed with Banks
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What happened was a failure of the government to exercise proper regulatory control over mortgage banking and securities. Between 2004 and 2006, banks and mortgage lenders made millions of high-risk, subprime loans (i.e., 100% "piggyback" loans with adjustable interest rates "ARMs", etc.) to borrowers that were unqualified for conventional financing and without due-diligence requirements for collateralization on the assumption that the real estate market could only go up and no one could lose. These loans were then packaged and sold as debt securities on the financial markets worldwide.
You left out one very important piece. These loans would never have been made if the government was not guaranteeing them.
The government guarantees are the specific reason for the Volcker Rule under Dodd-Frank. Banks should be prohibited from speculating on high-risk securities (i.e., derivatives) - including trading their own debt securities - on the financial markets. The banking lobby’s argument that the banks should be given carte blanche to trade in financial derivative contracts to be competitive in world markets belies the responsibility for the risk of loss to be borne by the government, and, ultimately, the taxpayer; not to mention that derivatives are traded "over the counter" and carried "off balance sheet", which undisclosed transactions violate all rules of bank accountability. (Even to this day, the government does not know where all the TARP money went!) It is up to Congress to act. The question is whether Congress has the political will to stand up to the banking lobby. Without a regulated banking system, there can be no security for commerce, and, ultimately, financial collapse and economic chaos.
The government guarantees are the specific reason for the Volcker Rule under Dodd-Frank. Banks should be prohibited from speculating on high-risk securities (i.e., derivatives) - including trading their own debt securities - on the financial markets. The banking lobby’s argument that the banks should be given carte blanche to trade in financial derivative contracts to be competitive in world markets belies the responsibility for the risk of loss to be borne by the government, and, ultimately, the taxpayer; not to mention that derivatives are traded "over the counter" and carried "off balance sheet", which undisclosed transactions violate all rules of bank accountability. (Even to this day, the government does not know where all the TARP money went!) It is up to Congress to act. The question is whether Congress has the political will to stand up to the banking lobby. Without a regulated banking system, there can be no security for commerce, and, ultimately, financial collapse and economic chaos.
With many in government that pushed for the risky loans before once again pushing for starting this up again it's unlikely that the government will ever actually do what they need to do.
To me it's simple. If you are FDIC insured you can't put that money into markets with risk. Without the FDIC insurance people pull their money and you are out of business. You don't get to risk public guaranteed money.
If you as a financial institute want to open a branch that people put money into for the institute to put into markets that's none of my business. None of the money is going to be guaranteed by the government. You lose, you lose.
The money you deposit in a bank is not in the bank, and it’s not your money. When you open a bank account and make a deposit, you surrender legal title to the money deposited. The money deposited becomes an asset of the bank, and the depositor’s account is held as a liability of the bank. At best, the depositor has an unsecured contract claim against the bank for the funds deposited. Hence the need for insured deposits to maintain stability and confidence in the banking system.
The money you deposit in a bank is not in the bank, and it’s not your money. When you open a bank account and make a deposit, you surrender legal title to the money deposited. The money deposited becomes an asset of the bank, and the depositor’s account is held as a liability of the bank. At best, the depositor has an unsecured contract claim against the bank for the funds deposited. Hence the need for insured deposits to maintain stability and confidence in the banking system.
I didn't argue any different. I simply said that banks shouldn't be able to risk funds in the markets with money the government is insuring.
Pknopp, DetwahDJ is trolling. He can't respond to the facts of his side in bed with big banks so he will keep posting lies, accusations and etc.
You wrestle with a pig and you will get muddy...the only difference is the pig loves the mud.
DetwahDJ has already proven himself a liar and a close minded fool on this thread...we are wasting our time thinking that we are talking to a sane individual that wants a conversation. If you pin him down on a fact he will ignore it and change the topic.
You have some strange, rambling, incoherent agenda basically about one person whom you don't like. According to your track record, you seem to hate Obama and the citizens of Detroit for instance. By blaming Obama for Geithner, and ignoring all else, you have tried to build a case for your hatred and it fails. All you do is whine about the guy in the White House, and as a pathetic and feeble "argument" you can only condemn, then duck and dodge.
"Your side", "my side"? You can't even define "your side". What a joke.
Face the facts, the black guy with the big ears won two elections fair and square - just accept it.
Here's another suggestion - for mutual self-gratification, you and knopp just "converse" with each other. These "hate Obama" threads draw both of you like flies to excrement.
You want self-verification and an orgasmic high? Just call Limbaugh or any RW talk show - you'll be extremely well-received.
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