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The banks lobbied Congress to immunize trading in derivatives, which was codified in the provisions of the Bankruptcy Abuse Prevention and Consumer Protection act of 2005 noted in Post# 17, supra. This set the stage in the marketing of securitized mortgages traded as debt securities on the financial markets, which precipitated the current economic crisis and necessitating the government bailout. The reason why the Congress should repeal the "safe harbor" provisions for derivatives is that, unlike their holding companies (e.g., Washington Mutual, Inc. vs. Washington Mutual Bank), banks are ineligible for bankruptcy reorganization. 11 U.S.C. § 109(b)(2). An insolvent bank gets taken over by the FDIC, which puts the risk of loss on the government, and, ultimately, the taxpayer. Banks should be in the business of lending and not gambling on the stock market.
They didn't have the audacity to put Barney, Bubba Clinton, Kerosene Maxine (thank you Larry Elder) or Greenspan on the hot seat after the housing bubble exploded a few years ago despite SEVERALYEARS of warnings, but will gladly trot out a Wall Street titan to unload on.
well obviously. it was the banks that caused the housing bubble, not Bill Clinton, Barney Frank or Maxine Waters.
The banks lobbied Congress to immunize trading in derivatives, which was codified in the provisions of the Bankruptcy Abuse Prevention and Consumer Protection act of 2005 noted in Post# 17, supra. This set the stage in the marketing of securitized mortgages traded as debt securities on the financial markets, which precipitated the current economic crisis and necessitating the government bailout. The reason why the Congress should repeal the "safe harbor" provisions for derivatives is that, unlike their holding companies (e.g., Washington Mutual, Inc. vs. Washington Mutual Bank), banks are ineligible for bankruptcy reorganization. 11 U.S.C. § 109(b)(2). An insolvent bank gets taken over by the FDIC, which puts the risk of loss on the government, and, ultimately, the taxpayer. Banks should be in the business of lending and not gambling on the stock market.
It's funny the way this is worded. "Primarily". Who cares who is "primarily" at fault. Both were at fault. Trying to argue who was the most at fault is an absolute waste of time.
I'll ask again. Why were none of these bankers ever charged with anything?
Because the now "top cops" of the DOJ, Eric Holder & Lanny Breuer, worked for the elite law firm which defended same banks from prosecution.
Now......back to Jamie Diamon and the thread topic, one poster screamed "fraud". I'm still waiting for him to back up that claim.
well obviously. it was the banks that caused the housing bubble, not Bill Clinton, Barney Frank or Maxine Waters.
Uh no, our federal government (under Democrat POTUSs) put into place the housing policies and lending policies/legalisation of derivatives trading, which brought about both the housing bubble and the mortgage derivative debacle. You see, the banks did what they were told to do via regulation in making those whom could not afford a home otherwise, homeowners. In fact, many were threatened to make those loans "or else".
Because the now "top cops" of the DOJ, Eric Holder & Lanny Breuer, worked for the elite law firm which defended same banks from prosecution.
Now......back to Jamie Diamon and the thread topic, one poster screamed "fraud". I'm still waiting for him to back up that claim.
We will have to wait for the lawsuits. The argument is that Dimon was not truthful in his statements. There were rumors that JPMC was on the hook for some big losses, but Dimon came out and said that there was absolutely nothing to the rumors which he knew was false.
Because of his statements people either bought or didn't sell. Less than the month later the losses were so big that no false statements were going to continue to cover for them.
Uh no, our federal government (under Democrat POTUSs) put into place the housing policies and lending policies/legalisation of derivatives trading, which brought about both the housing bubble and the mortgage derivative debacle. You see, the banks did what they were told to do via regulation in making those whom could not afford a home otherwise, homeowners. In fact, many were threatened to make those loans "or else".
No one forced the banks to make the bad loans; they did it on their own with a little help from Congress. What really happened was that there 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.
Then, predictably, things took a downturn. The interest rates on these loans went up, and borrowers started defaulting on their loans, precipitating a rash of foreclosures across the country. By August 2007, Countrywide Home Loans, the largest mortgage lender on the planet, was on the verge of bankruptcy; but was bought out by Bank of America in an effort to prevent its own equity position in the company from being extinguished. (A very risky move, for in taking over Countrywide, it had to assume a large portfolio of very bad loans.) The disintegration, however, continued with millions of defaults followed by foreclosures as real estate values plummeted. This in turn precipitated bank failures, including Indymac Bank (the largest since the crash of 1929), which was followed by the collapse of some of the biggest investment firms like Bear Sterns, Morgan Stanley, and Lehman Brothers (the biggest bankruptcy in history), the federal "conservatorship" of Fannie Mae and Freddie Mac, and finally the outright takeover of AIG. It had a cascading effect necessitating a government bailout with taxpayer funds just to stabilize the financial markets and prevent widespread, systemic economic chaos.
It was the fault of deregulation. The FDIC, FSLIC, HUD and FTC failed in regulating the banks and mortgage lenders, and the SEC had failed to exercise proper oversight of the sale of mortgage-backed securities. (Even Alan Greenspan was forced to admit that he was wrong in thinking that the market could be left to its own devices.) And, it will happen again because the Congress lacks the political will to establish regulatory control over financial markets. Dodd-Frank - which the banking lobby is working night and day to have repealed - is not the answer. Regulation must be measured, but effective; and not so heavy-handed as to stifle economic growth. To work, there must at least be a level playing field, which requires more transparency that will promote value over speculation. And, there has to be accountability; if there are no penalties for failure - if executives are rewarded for running their companies aground - there is no incentive to exercise restraint over irresponsible action.
blaming Barney Frank is ridiculous. All Frank did was interfere with the reform of the GSE's. Barney Frank didn't force firms like Countrywide to issue nonconforming loans to anyone who was remotely rumored to be breathing.
You see, the banks did what they were told to do via regulation in making those whom could not afford a home otherwise, homeowners. In fact, many were threatened to make those loans "or else".
the only loans anybody was forced to make were CRA loans, and CRA loans have nothing to do with the housing bubble. They are uncommon, they aren't defaulting at a notable rate, and they weren't made in geographic areas where the bubbles occured.
If you want to blame the government you have to look WAY further than these little Democrat "housing programs", and look into monetary policy and financial regulation (which conservatives are more responsible for IMO.). Reckless mortgage lending was going on in Spain, Ireland, Australia, Hong Kong, the UK, Italy.. all sorts of countries that have no ties to CRA or Fannie or Freddie.
The only way you can blame the government is for allowing banks to take irresponsible risks while lying about it.
Last edited by le roi; 07-13-2012 at 01:22 PM..
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