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To those who believe that the removing of the Glass-Steagall act in 1999 contributed to our current financial collapse this info may cause you to rethink that. Basically as pointed out,the big investment banks(Lehman Brothers,Bear Stearns,and Merrill Lynch)that have collapsed weren't involved in commerical banking which Glass-Steagall was ment to seperate from commerical banks. So did repealing this act in 1999 really contribute to our current crisis?
" On several occasions last year, Summers said he believed the repeal of Glass-Steagall had little or nothing to do with the current financial crisis.
During a June speech, Summers pointed out that many of the financial institutions in trouble were independent investment banks, like Lehman Brothers, Bear Stearns or insurance firms like American International Group. (AIG, Fortune 500) None of those firms would have been impacted by the repeal of Glass-Steagall."
Very true indeed. Those were classical investment banking firms. They didn't use traditional consumer deposits and then engage in high risk gambling with them.
To those who believe that the removing of the Glass-Steagall act in 1999 contributed to our current financial collapse this info may cause you to rethink that. Basically as pointed out,the big investment banks(Lehman Brothers,Bear Stearns,and Merrill Lynch)that have collapsed weren't involved in commerical banking which Glass-Steagall was ment to seperate from commerical banks. So did repealing this act in 1999 really contribute to our current crisis?
" On several occasions last year, Summers said he believed the repeal of Glass-Steagall had little or nothing to do with the current financial crisis.
During a June speech, Summers pointed out that many of the financial institutions in trouble were independent investment banks, like Lehman Brothers, Bear Stearns or insurance firms like American International Group. (AIG, Fortune 500) None of those firms would have been impacted by the repeal of Glass-Steagall."
The current admin is unwilling to point the finger where it really belongs...
"Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A... It is easy to see how this misrepresentation was a principal cause of the financial crisis. Market observers, rating agencies and investors were unaware of the number of subprime and Alt-A mortgages infecting the financial system in late 2006 and early 2007. ...because of Fannie and Freddie's mislabeling, there were millions more high-risk loans outstanding. That meant default rates as well as the actual losses after foreclosure were going to be outside all prior experience." The Price for Fannie and Freddie Keeps Going Up - WSJ.com
Why do they need that unlimited bailout guarantee? How many millions more loans that Fannie and Freddie misrepresented and sold to investors and the rest of the financial system are out there? How many millions of those infected our financial system as investment banks bought intentionally misrepresented MBS's from Fannie and Freddie? Do we even have any idea how much worse this is going to get?
To those who believe that the removing of the Glass-Steagall act in 1999 contributed to our current financial collapse this info may cause you to rethink that. Basically as pointed out,the big investment banks(Lehman Brothers,Bear Stearns,and Merrill Lynch)that have collapsed weren't involved in commercial banking which Glass-Steagall was ment to separate from commercial banks. So did repealing this act in 1999 really contribute to our current crisis?
" On several occasions last year, Summers said he believed the repeal of Glass-Steagall had little or nothing to do with the current financial crisis.
During a June speech, Summers pointed out that many of the financial institutions in trouble were independent investment banks, like Lehman Brothers, Bear Stearns or insurance firms like American International Group. (AIG, Fortune 500) None of those firms would have been impacted by the repeal of Glass-Steagall."
Glass-Steigall, the CRA, misconduct at the GSEs, leveraging worthless CDOs with other equally worthless CDOs, the threatened Democratic filibuster of S.190, ACORN NINJA loans, etc. were all contributors to the financial collapse.
A lot of things had to happen before this event became possible. Repealing Glass-Steigal played a roll in that it allowed certain financial institutions to become "too big to fail". Actually, they became too big and too entangled with the rest of the economy to fail. Had Glass-Steigall never been repealed, Citibank and Traveler's Insurance could have both failed and many others like them since the well run companies could have simply purchased their assets when they were liquidated. But Citigroup is entirely different.
The smart thing for us to do is break up any financial institution that is too big to fail. Glass-Steigall successfully prevented these institutions from becoming too big and too entangled in the economy for some eighty years. Clinton should have left it alone.
Absolute bull, it and the Bush Tax Cuts allowed the Rich to triple their wealth at the cost of 40% OF EVERY DOLLOAR TO THE REST OF US.
wrong. the tax cuts actually brought mone money into the IRS
the problems are from BEFORE bush 1993, and 1995, and 1999/2000
December 1993 NATFA---passed by the democrat controlled congress, signed into law by Bill Clinton...the result 60 million jobs lost in the USA bewteen 1994 and 2009, because of nafta and its sisters cafta and gatt
1995 updated CRA..Pres. Clinton (through his chief of HUD (Henry Cisneros and later his second chief andrew coumo)) eased the rules on obtaining mortgages allowing more 'exotic' mortgages and 'no-doc/low doc' mortgages-----the consequence ......housing SKYROCKETED causing low inventories causing a 'not normal' increase in home prices, sellers got greedy, buyers got even greedier (looking to PROFIT in a skyrocketing market by flipping) and bought THINKING that prices would still increase and their ADJUSTABLE mortgage would pay it self off in MINIMUMAL years...EVEN THOUGH THESE INCREASES IN HOME VALUES WERE TOTALLY UNHEARD OF, AND MORTGAGE RATES WERE AT 40 YEAR LOWS( what did they think an adjustable mortgage gotten at 40 year lows would do in the term(3 months-3years) when it adjusted...of course it would go up, their CONTRACT even said after the term it would be 6% PLUS PRIME)))
For many potential homebuyers, the lack of cash available to accumulate the required downpayment and closing costs is the major impediment to purchasing a home. Other households do not have sufficient available income to to make the monthly payments on mortgages financed at market interest rates for standard loan terms. Financing strategies, fueled by the creativity and resources of the private and public sectors, should address both of these financial barriers to homeownership."
The above is the start of the mortgage meltdon: Clinton's National Homeownership Strategy
1999 the republican congress passes a bill and clinton signs it that DEREGULATES the banking industry
2000 clinton pushes and signs the China trade bill
2000 clinton signs the Commodity Futures Modernization Act of 2000..(which paves the way for ENRON)
2000/1 clinton pushes to get china into the world bank
all these things paved the way for our problems of today......if you think all the problems just happened under Bush, then you really need to take your head out of the sand
Well, a banking system that has been going strong for more then 50 years just fine and less then a decade after it's repealed we have a major economic crisis directly related to gambling with banks money and over leveraging by huge banks. Nope, not related.
Well, a banking system that has been going strong for more then 50 years just fine and less then a decade after it's repealed we have a major economic crisis directly related to gambling with banks money and over leveraging by huge banks. Nope, not related.
but the problem was the GOVERNMENT it self,,and before bush or obama
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999
WASHINGTON, Sept. 29— In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
HUD Secretary Andrew Cuomo said: "The good news as we mark National Homeownership Week is that homeownership in America is at record levels. But the bad news we face is that many of HUD?s homeownership and other programs are under attack by some members of Congress. The success of our homeownership initiatives proves that HUD in combination with local organizations can further our goal of even more homeownership and fulfill our commitment to liberty and equity for all."
------------------------------
Fed Stops Bank Merger; Cites Lending Concerns
By STEVEN GREENHOUSE,
Published: November 17, 1993
WASHINGTON, Nov. 16— In a move showing banking regulators' increased emphasis on ending loan discrimination, the Federal Reserve Board has, for the first time, blocked a large bank merger because of concern over possible bias against minority groups in mortgage lending.
The Federal Reserve's decision came after the the Justice Department, the Department of Housing and Urban Development and banking regulators all promised this month to step up efforts against discrimination in lending.
Over the last year Shawmut has begun several programs to increase lending to low-income Americans and minority groups that some community activists say have made Shawmut a leader in the industry.
These programs include establishing mortgages with down payments of as little as 2.5 percent that use more flexible income criteria, hiring more minority mortgage staff workers and sending around home buyers from minority groups to check that Shawmut employees are not discriminating.
"Absolute bull, it and the Bush Tax Cuts allowed the Rich to triple their wealth at the cost of 40% OF EVERY DOLLOAR TO THE REST OF US"
Your statement is absolute bull.
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