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Smaller banks already know they will never get a bailout so they aren't going to start taking on high risk loans. It will allow them to shrink their compliance budgets and compete more effectively with the larger banks. Increased competition in lending is good for the consumer.
fraud tends to prosper when regulations are either removed or are lax to begin with.
Both acts referenced expanded scope of offerings for the thrifts and reduced regulatory oversight....which led to the S&L facing similar problems to those in 08- lending vs borrowing mismatch, liquidity crunch, holding assets they didn't fully understand, etc...
The S and Ls understood exactly what they were holding. Garbage. lol I'm not following, how could they not understand the assets they held? They understood and lied imo. It's like a ponzy scheme.
The S and Ls went under not because of any regulations, they went under because they overstated assets.
I'm not understand how the removal of regulations or newer regulations that passed in 1980 and 1982 caused the S and L to go under when in fact by 1980 85% of all savings and loans were losing money. That they were over valued by 150 BILLION.
How does a new regulation that passed on March 31st 1980 cause that? I have no idea when it was implimented but if it was implimented the next day, how does the S and L industry go under that fast if what you're saying is true? It doesn't. How does something that passed in 1982 cause 85 percent of the S and Ls to loose money in 1980?
In other words, if you go into a cemetary, dig up a dead body and stab it 20 times you can't be charged for murder.
"Niskanen (1992, p. 45) cites a Federal Home Loan Bank Board (FHLBB) report released in July 1981 that determined the industry’s net worth to be “overstated by $152.3 billion, on a market-value versus book-value basis, at the end of 1980.” According to Niskanen, since the book value of the industry was only $32 billion at the end of 1980, this implies that the industry’s market value was –$120.3 billion. The National Commission on Financial Institution Reform, Recovery, and Enforcement (NCFIRRE) issued a report in 1993 that estimated that from 1981 to 1982, the S&L industry’s market value was around –$150 billion (Origins, 1993, p. 1)."
The S and Ls understood exactly what they were holding. Garbage. lol I'm not following, how could they not understand the assets they held? They understood and lied imo.
The S and Ls went under not because of any regulations, they went under because they overstated assets.
I'm not understand how the removal of regulations or newer regulations that passed in 1980 and 1982 caused the S and L to go under when in fact by 1980 85% of all savings and loans were losing money. That they were over valued by 150 BILLION.
How does a new regulation that passed on April 30th 1980 cause that? I have no idea when it was implimented but if it was implimented the next day, how does the S and L industry go under that fast if what you're saying is true? It doesn't. How does something that passed in 1982 cause 85 percent of the S and Ls to loose money in 1980?
In other words, if you go into a cemetary, dig up a dead body and stab it 20 times you can't be charged for murder.
how did buying junk bonds that evaporated in days that left them with worthless assets not hurt them? They thrifts didn't understand the junk bunds issues to fund the buyouts and takeovers of the 80's....go ask DBL and Milken about how they preyed on the S&L's. And if you don't think laws passed allowing them to invest n new riskier assets which ultimately buried them is relevant, well I dunno then.
When you lend long term at X and finance by borrowing short term at X-Y but suddenly your cost is now X+Y, you're in trouble. One way to try to fix that is to buy riskier investments with higher coupons that maybe you don't really understand...aka the S&L crisis of the 80's.
See any parallels between that the 08 crisis??? Just maybe???????
how did buying junk bonds that evaporated in days that left them with worthless assets not hurt them? They thrifts didn't understand the junk bunds issues to fund the buyouts and takeovers of the 80's....go ask DBL and Milken about how they preyed on the S&L's. And if you don't think laws passed allowing them to invest n new riskier assets which ultimately buried them is relevant, well I dunno then.
When you lend long term at X and finance by borrowing short term at X-Y but suddenly your cost is now X+Y, you're in trouble. One way to try to fix that is to buy riskier investments with higher coupons that maybe you don't really understand...aka the S&L crisis of the 80's.
See any parallels between that the 08 crisis??? Just maybe???????
I think they understood but took a bad gamble, Tried to delay a crash in hopes to get out. I agree with alot of what you've said, in that one shouldn't take absurd risks. but what does that have to do with regulation/deregulation? You're incorrectly identifying the cause of the problem. Blame vs cause.
You said "laws passed allowing them to invest n new riskier assets"
You ignored what I posted about regulations even though you quoted it.
How does a new regulation that passed on April 30th 1980 cause that? I have no idea when it was implimented but if it was implimented the next day, how does the S and L industry go under that fast if what you're saying is true? It doesn't. How does something that passed in 1982 cause 85 percent of the S and Ls to loose money in 1980?
How in the world does a regulation/deregulation, that happens after the fact, cause a collapse in the S and L industry?
I think they understood but took a bad gamble, Tried to delay a crash in hopes to get out. I agree with alot of what you've said, in that one shouldn't take absurd risks. but what does that have to do with regulation/deregulation? You're incorrectly identifying the cause of the problem. Blame vs cause.
You said "laws passed allowing them to invest n new riskier assets"
You ignored what I posted about regulations even though you quoted it.
How does a new regulation that passed on April 30th 1980 cause that? I have no idea when it was implimented but if it was implimented the next day, how does the S and L industry go under that fast if what you're saying is true? It doesn't. How does something that passed in 1982 cause 85 percent of the S and Ls to loose money in 1980?
How in the world does a regulation/deregulation, that happens after the fact, cause a collapse in the S and L industry?
So you’re answer is it wasn’t perfect so get rid of it all together and replace it with nothing?
DF did not address the stock market
DF did not address fannie/Freddie which were the biggest culprits
DF didn't address anything that led to the problems...its a waste of a bill
and it didn't have anything to do with GS either
they became 'too big to fail' before the repealing of G-S
1987 chemical bank merged in to jp morgan
1987 first fidelity into wells fargo
1988 fleet into norstar into bank of america
1990 bank of new england into BOA
1992 manufacturers Hanover and trust into jp Morgan
1996 chase manhattin into jp morgan
1996 Meridian Bancorp into wells fargo
1997 signet into first union into wells fargo
1998 travelers into citi
1988 Barclays into wells fargo
yes many happened after gs.. but the 'too big to fail' happened before Gs
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