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They banks were forced to make a small percentage of their loans available to risky customers. They went above and beyond with the sub prime loans.
Every industry takes risk with bad credit but they are smart enough to cap that percentage. Banks were told to make a small percentage of loans available for sub prime. You can't blame the government for a bank making 35% of their loans to low income when the requirement was 15% (hypothetically speaking).
The relaxed regulations for low income was used for middle americans and the wealthy. Everyone was flipping. Low income didnt crash the market. Greed across the board crashed the market.
How can bankers who bought and sold loans that were questionable to begin with assume no blame? Why does the guy that stands to lose or gain the least amount of money is held to a higher standard then the people who stand to gain or lose it all?
They banks were forced to make a small percentage of their loans available to risky customers. They went above and beyond with the sub prime loans.
Every industry takes risk with bad credit but they are smart enough to cap that percentage. Banks were told to make a small percentage of loans available for sub prime. You can't blame the government for a bank making 35% of their loans to low income when the requirement was 15% (hypothetically speaking).
The relaxed regulations for low income was used for middle americans and the wealthy. Everyone was flipping. Low income didnt crash the market. Greed across the board crashed the market.
How can bankers who bought and sold loans that were questionable to begin with assume no blame? Why does the guy that stands to lose or gain the least amount of money is held to a higher standard then the people who stand to gain or lose it all?
Obviously you've decided to go with the over simplified stance of blaming greed because you can then just dump the blame on the "evil rich."
The real truth is more like this: politicians such as Clinton and those who passed the legislation back in 1977 had, by all appearances, altruistic purposes in forcing banks to toss out their own lending rules to help those who couldn't attain "the American Dream" of home ownership. Those same politicians were convinced that the government could prop up the bad loans and told the banks as much. Their intentions were likely true but also naive about the market. Banks continued to give out the bad loans because Freddie and Franny kept buying them up; mortgage divisions became de facto "middle men" between those who couldn't afford loans and the government who was pushing for the loans AND (this is key) buying up the loans.
Ask yourself this: what purpose would it be for banks to make bad loans if they were not being coerced and propped up by the government? Banks stand to lose big time when a house goes into foreclosure. You seem to imply that banks make money on bad loans. Wrong; they lose on them. Without governmental involvement from 1977 on, the banks would have never made the loans. It would be a stupid business practice because every bad loan that they supposedly "tricked" people into would cost them money. They only make money when the loan is repaid in full. It's folly to say "greed" drove banks to give out bad loans because bad loans actually LOSE money - unless of course the government is on both sides of the deal, both pushing for it and then purchasing it.
In your scenario, it would be like blaming the auto makers for those who lost their cars because they couldn't pay for them. The government became the de facto guarantors of the very bad loans they were pushing, making the banks the "auto makers."
But with all of that said, I still can not for the life understand why you insult average Americans by calling them too stupid for their own good.
And again I add, that the banks likely knew that the loans were unsustainable but they were both financed and coerced by a government that may have been well-intentioned but also gravely ill-informed about market sustainability.
Last edited by lowercountry; 10-06-2011 at 08:56 PM..
The Endgame of Occupy Wall Street Is Critical Mass
John Wellington Ennis
Posted: 10/6/11 09:37 AM ET
What is surprisingly unique about the Occupy Wall Street demonstration, and supporting actions across the country, is the broad immediate support without an immediately stated objective. With so little coverage and a yet unspecified goal, major unions lent their support, supportive occupations cropped up nationwide, and the numbers in Liberty Park are growing despite NYPD crackdowns.
Unlike anti-war marches, Tea Party gatherings, or other well-worn modes of protest, the notion of an in-person response to Wall Street's unchecked looting of the economy apparently did not need much explaining. That is because many Americans have been living with painful awareness that their hardships in recent years are related in a myriad of ways to reckless trading, predatory loans, and manifold illegal banking practices, all perpetrated by the same executives still receiving multi-million dollar bonuses whose guilt is trumped by the notion that their companies are Too Big To Fail.
None of these many abuses by financial institutions collectively referred to as Wall Street are new information. It's not like people just flooded the streets upon hearing that Bank of America is trying to tack on another surcharge, just after laying off over 30,000 employees, just after widespread manipulation of their loan business was deemed not criminal, by their own accord. (No, that move by B of A was just easy pickings for Democrats trying to remember their purpose.)
It's not like Americans did not wait while the federal government negotiated good-faith interest-free loans to keep huge banks and firms afloat, at the price to taxpayers, many of whom were struggling to stay afloat themselves under variable interest or inflated mortgages foisted upon them by said financial giants. It's not like financial regulations weren't proposed to Congress, with larger reforms left by the wayside, and in the final decision by the Federal Reserve on the Durbin Amendment of the Dodd-Frank Finanical Act, credit card companies somehow get to charge more for debit swipes than they had even hoped. Bank lobbyists paid off, in more than one sense.
And, it's not like President Obama hasn't trotted out some fine rhetoric of late, angling the ongoing Republican obstructionism to fuel his re-election campaign as it gears up. Yes, it's math, not class warfare. But, if this were a metaphor of head to head competition between classes -- namely, the top 1% Super Rich that owns 40% of the wealth versus the 99% rest of Americans -- then Obama would be like a goalie, constantly swarmed by the offensive John Boehner, Mitch McConnell, Eric Cantor, Darrell Issa, bank lobbyists, and Goldman Sachs alumni in his own ranks. The Super Rich Team will continue to score point after point on Obama, because despite his considerable skill set, it's like he's playing at the company picnic, and really, you just don't make your bosses look bad when they underwrite your existence.
Obama is looking for $1 billion to fund his re-election campaign. That may seem extraordinary, but after the disastrous Supreme Court decision Citizens United vs. FEC, it is a given that there will be even more spent against him in anonymous corporate money. Karl Rove's American Crossroads and Crossroads GPS have announced plans to raise and spend record amounts, over $300 million in outside ads running across the country in the 2012 races.
Obama is not going to get one billion dollars from $5 donations, no matter how many email blasts. Obama and his team have been currying favor like a schoolboy with Wall Street throughout this administration because they are waiting for the pay-off in their campaign coffers. The slap on the wrist following the financial meltdown was more drying their hands like a bathroom attendant so they can get back to work making important deals without consequence.
While the financial meltdown and ensuing bailouts came before Obama, the lack of reform or accountability does not win him any gratitude from either side, it only serves as precedent that selling bundled crap mortgages to old people goes unpunished. In fact, it is richly rewarded. Obama's deference and endless capital to the banking industry has long made it clear where his priorities are. His jobs plan is well-intentioned, but probably a drop in the bucket and a few years late. For all the bitter clamor over health care reform, it's quite likely that it will be deemed impermissible by the Supreme Court. Clarence Thomas can't wait to sit silently through the arguments before he punts our healthcare system back to the wolves that employ his wife, Ginni.
As the crowds grow, this will become Obama's next oil spill. How long will he let Occupy Wall Street go on before addressing it as more than just a policy point to support his agenda? Many loyalists will defend the intentions and constraints on Obama, but this much is painfully clear: The President must act now. Because if he does not get in front of this parade, it's about to surpass him.
If Obama really does aspire to be like President Lincoln, then he must recognize that his country is rent apart and it requires a true leader to keep our union from collapsing under debt and looted public services.
Because when people show up at the gates of their oppressor, the response is not: "What do you want? Can you bullet-point it for me?" You know what this is about. Our country has been decimated over the past three years, with continual revelations of financial impropriety, concerted fraud, and executive compensation the amount of a small nation's GDP. This might be the one protest where, if asked why you were there, you could reply, "Are you ****ing kidding me?" and that would actually be understood.
To dispel media misconceptions, here's what Occupy Wall Street is not: it's not another Tea Party, a corporate PAC-backed stab at populism consisting of right wing extremists. It's not just young people in attendance, even though younger generations have more to lose anyway, and many are already crippled with student debt and no job possibilities. (Admittedly, younger people are better suited to sleep in inconvenient places and be fine with that. The kids call this "crashing," which should not be interpreted as a roughhousing sort of thing.)
Occupy Wall Street is not anti-capitalism. We don't live in capitalism. Capitalism is supposed to be merit based and left to the market -- consumers -- to decide where innovation and service is found. What has been foisted on us again and again is not a fair and open market. Massive companies spend huge sums to avoid paying taxes altogether. They then spend money to back politicians that will be friendly to them, in terms of regulations and tax breaks or pressure on rivals. This is a system of massive corporate welfare, where the biggest corporations pay the least to the country that allows them to prosper, while they spend their excess money in hopes of making more money through lower taxes, government jobs, or loosened environmental restrictions. Election cycles ensure ongoing opportunities for candidates to be wooed with money or threatened with ads. The more they spend on the race, the more indebted candidates become to their backers. Those that become elected repay their backers with loose oversight, no-bid contracts, and even accept their donors' legislation pre-written. We don't live in capitalism -- that's favoritism.
And most importantly, Occupy Wall Street is not one political party or part of a spectrum. This grassroots movement is fundamentally removed from both parties, because both parties accept vast fortunes from Wall Street to not rain on their parade. The reason abuses have thrived is because of the cost of running for office. Most people's political persuasion or identity is based on their own sense of what's just and fair. The nuance of foreign policy or civil liberties is lost when people are losing their homes due to manipulative mortgages from banks that have faced no discipline or reform and have been given federal money to loan to people which they still sit on.
Yet, it will take a political solution to retake our country from the Gollum of Wall Street. There's no way any of these banks or brokers will willingly accept reform measures, even after taking trillions of taxpayer money following their own colossal ****-ups. Wall Street execs thrive on extracting more and more profit per sale, and get off on boardroom backstabbing. Do you expect them to respond to people of all types camped outside their offices politely? The only thing they care about is if the market goes down.
Real financial overhaul will only happen if we reclaim our elections. We need real campaign reform, and we need to elect the people who will enact it. We do that through running and winning in primaries, where the party's pick usually prevails with the most money. We innovate low budget campaign strategies to support candidates not backed by Political Action Committees, fronts for corporate money. We do it through becoming the media and covering these candidates where we live and across the country. And it starts in the streets. Where else is there but the streets?
America was born in the streets. Our first president was sworn in on the steps of Wall Street, where Congress convened for years. The framer's dream of escaping monarchy is being eclipsed by the wealthiest 1% and their insatiable assault on anything the government provides to the public.
How can we not occupy Wall Street? Wall Street occupies US.
End disparate treatment of capital gains, except for limited exemptions for the sale of a primary residence (and structure this to allow for the average person to keep their home equity if they downsize late in life).
All income should be taxed as regular income.
The SEC/DOJ needs an independent enforcement division, staffed by both attorneys and licensed, experienced traders (who know how the system is gamed). Cross hiring by the entities they regulate needs to be prohibited as a conflict of interests/ethical issue.
Finally, his point about lobbyists authoring legislation will need a new law on the books to address it. The fact that most of our bills are introduced into either house after a lobbyist hands it to a Senator/Rep (who doesn't even read it), is so problematic and such a breach of fiduciary duty that it's hard to articulate without getting riled up.
Our first president was sworn in on the steps of Wall Street, where Congress convened for years. The framer's dream of escaping monarchy is being eclipsed by the wealthiest 1% and their insatiable assault on anything the government provides to the public.
And if the protestors have their way, we'll all once again be living as if it's 1790.
Last edited by lowercountry; 10-07-2011 at 05:45 AM..
The danger in the government's willful, intentional and repeated refusal to put an end to these abuses (Wall Street Fraud) is that there is a point at which the people have had enough and will simply not sit for it any more, nor will they believe they can vote for a change and actually receive that change. How many people voted for "change" in 2008 yet did not receive it?
Bottom line is that many crimes have been committed and the very people perpetrating them are rewarded and remain politically connected in a special class where profits are private and losses are subsidized by Taxpayers through a corrupted political class that covers both parties.
The Federal Reserve continues to print money, albeit in a backdoor fashion (buying our own debt), but at some point that capacity collapses and there are no more band aids.
We have seen HUGE inflation, with energy inflation at 33% according to the most recent CPI.... Once food costs double again we will start to see some people wake up.
I support the OWS protests... I don't support the people wanting freebies or a totalitarian government, but it is constructive to have people talking about it and upset about something.
The left wants to use these protests as a context to raise taxes... with no spending cuts of course.
Obviously you've decided to go with the over simplified stance of blaming greed because you can then just dump the blame on the "evil rich."
The real truth is more like this: politicians such as Clinton and those who passed the legislation back in 1977 had, by all appearances, altruistic purposes in forcing banks to toss out their own lending rules to help those who couldn't attain "the American Dream" of home ownership. Those same politicians were convinced that the government could prop up the bad loans and told the banks as much. Their intentions were likely true but also naive about the market. Banks continued to give out the bad loans because Freddie and Franny kept buying them up; mortgage divisions became de facto "middle men" between those who couldn't afford loans and the government who was pushing for the loans AND (this is key) buying up the loans.
Ask yourself this: what purpose would it be for banks to make bad loans if they were not being coerced and propped up by the government? Banks stand to lose big time when a house goes into foreclosure. You seem to imply that banks make money on bad loans. Wrong; they lose on them. Without governmental involvement from 1977 on, the banks would have never made the loans. It would be a stupid business practice because every bad loan that they supposedly "tricked" people into would cost them money. They only make money when the loan is repaid in full. It's folly to say "greed" drove banks to give out bad loans because bad loans actually LOSE money - unless of course the government is on both sides of the deal, both pushing for it and then purchasing it.
In your scenario, it would be like blaming the auto makers for those who lost their cars because they couldn't pay for them. The government became the de facto guarantors of the very bad loans they were pushing, making the banks the "auto makers."
But with all of that said, I still can not for the life understand why you insult average Americans by calling them too stupid for their own good.
And again I add, that the banks likely knew that the loans were unsustainable but they were both financed and coerced by a government that may have been well-intentioned but also gravely ill-informed about market sustainability.
So your telling me when these loans were bundled and sold off the banks didn't sell them at the price of the loan?
Loans made by lenders are almost immediately sold to third party investors. More recently, Wall Street began to package hundreds of those individual home loans into bundles worth billions.
If this was about the average american why did the whole world almost collapse when it all came falling down? Lenders and investors knew there was a % of home owners who would default.. they knew there was a percentage that couldn't honor their loans. Most thought they houses would stay at the bubble price but when it burst they were left with houses that were insanely over priced.
It was a sophisticated global investment scheme that burst...
Both sides are to blame.. Fannie and Freddie pushed for more loans but the deregulation of lending practices was abused by private lenders who had even less restrictions then Freddie and Fannie. Also remember the Bush administration replaced Fannie and Freddie's chief regulator in 2003 immediately after the regulator published a report warning of the risks.
There is no way something that was implemented in 1977 or 1986 was the reason for this mess. We didn't have global money crashes in the 80's or 90's.
Wall Street was allowed to use derivatives and packaged up these bad loans and sold them over and over again. Deregulation was the primary reason for the housing collapse. When the banks were allowed to run wild.. they ran wild.
"Wall St got drunk" - George W Bush
...as far as the banks being auto makers, if they were they were putting gold flakes in the dashboard trim, bose systems and 12 cylinder engines in the base models. Banks went above and beyond what Fannie and Freddie and the Gov't required them to do.
I never called Americans stupid... funny how the buyer, most of them first time home owners are expected to have all the knowledge in the world but those who work in the industry and took advantage of the lax regulations are being defended. It's time to stop defending the people responsible for crashing wall st. and making the tax payer foot the bill. Blame the first time home owners if you like but they are out of a house and have bad credit. I think that's punishment enough.. what about those who propped up the bubble, got their buddies to rate these loans as AAA and made off like fat cats? Those are the good guys huh?
Last edited by Feltdesigner; 10-07-2011 at 07:16 AM..
The danger in the government's willful, intentional and repeated refusal to put an end to these abuses (Wall Street Fraud) is that there is a point at which the people have had enough and will simply not sit for it any more, nor will they believe they can vote for a change and actually receive that change. How many people voted for "change" in 2008 yet did not receive it?
Bottom line is that many crimes have been committed and the very people perpetrating them are rewarded and remain politically connected in a special class where profits are private and losses are subsidized by Taxpayers through a corrupted political class that covers both parties.
The Federal Reserve continues to print money, albeit in a backdoor fashion (buying our own debt), but at some point that capacity collapses and there are no more band aids.
We have seen HUGE inflation, with energy inflation at 33% according to the most recent CPI.... Once food costs double again we will start to see some people wake up.
I support the OWS protests... I don't support the people wanting freebies or a totalitarian government, but it is constructive to have people talking about it and upset about something.
The left wants to use these protests as a context to raise taxes... with no spending cuts of course.
We will see.
This right here... I was listening to Hannity and he was trying to spin it into a left vs right argument and blamed it all on Obama. It doesn't matter who the president is he is beholden to Wall St.
There is no way Obama gets elected "out of nowhere" and keeps damn near every finance guy from the last administration.
I voted for him hoping, begging, believing that things could change. Ain't a damn thing changed but the date on the calender. The next guy will be the same way... the only one who would probably change something won't get elected. That would be Ron Paul.
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