Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
The credit rating agencies did not rate each GSE mortgage pass through issue. GNMA has an explicit government guarantee while FNMA and FHLMC had an implied guarantee prior to being taken into conservation ship in 2008.
FNMA and FHLMC, the corporations were publicly- traded and both equity and corporate bond offering were rated by the credit rating agencies. Both have had a history of accounting and disclosure issues. FNMA had a revolving door of CFOs and CEOs in the 2000's. No way am I defending their behaviors.
My only point here is to make clear that the housing bubble was created and sustained by the private sector.
I absolutely disagree. Had Fannie and Freddie not been providing easy money (buying loans made to people who never should have qualified via their multiple HUD goals "Affordable Lending" programs), there would have been no housing bubble.
I absolutely disagree. Had Fannie and Freddie not been providing easy money (buying loans made to people who never should have qualified via their multiple HUD goals "Affordable Lending" programs), there would have been no housing bubble.
We can agree to disagree.
Saw The Big Short last night in a sold out theatre.
It was a tad too long and a bit boring although it contained some swell analogies for intentionally complex sounding Wall Street terminology.
The moral of the story was too Bernie Sanders for my taste, investment bankers and sleazy originators taking advantage of the poor, the stupid and immigrants.
It never got into the middle and those with income beyond economic classes who sucked the equity out of their homes to live substantially beyond their means for a blip in time- the absolute mania at the consumer level.
Saw The Big Short last night in a sold out theatre.
It was a tad too long and a bit boring although it contained some swell analogies for intentionally complex sounding Wall Street terminology.
The moral of the story was too Bernie Sanders for my taste, investment bankers and sleazy originators taking advantage of the poor, the stupid and immigrants.
It never got into the middle and those with income beyond economic classes who sucked the equity out of their homes to live substantially beyond their means for a blip in time- the absolute mania at the consumer level.
Yes, it was all the middle classes fault. {roll eyes}
Dodd/Frank is a joke. It didn't do squat but make big banks any bigger and you know "what job".
It's total B.S. that they didn't have the power to do anything.
The Sarbanes- Oxley ( SOX) Act following Enron, holds publicly- traded companies and public accountants to higher standards than in prior times. It increased the definition of financial crimes with an emphasis on the balance sheet and attempts to hold CEOs and CFOs personally accountable. Easier said than done to hold top management personally accountable. The SEC and DoJ uses powers granted to prosecute crimes of intentionally misleading investors, mistaking financial reports, accounting fraud and failing to inform shareholders of significant exposures to risk.
Asset- backed securities were exempt from regulation.
It's up to state AGs relying on FBI investigations to pursue fraud, which typically happens after enough shareholders file suit.
The focus has been on financial settlement, not putting former CEOs and CFOs in prison.
Dodd- Frank is bipartisan legislation that was substantially diluted and compromised from its original intent by both parties to get it passed and demonstrate to Wall Street lobbiests that politicians did the best they could do.
Be mindful that the SEC's budget declined as the bubble inflated. Based on my own observations there are two general types of SEC regulators, the kids fresh out of school who do 2-5 year stints at the SEC to build resume to get hired by Wall Street for better compensation and semi lifers who wait to be told by the political winds. Just as the bubble peaked and signs of distress in sub prime were emerging , the SEC reduced the Net Capital Requirements of Lehman, Goldman, Merrill, Mogan Stanley and Bear Stearns and allowed just these 5 very special snowflakes to increase their leverage. It was a job well done by their lobbyists and congress committees. It protracted the cycle and made it much worse than if the SEC declined to play ball.
At the other end of the spectrum, there have been bills to tax Wall Street to fund increased regulation of Wall Street. The lobby machines have managed to persuade Joe Blow with $89,000 in his 401K that a tax is no good because it will be passed on to the end consumer and dilute their return on investment. That we might be talking about 14 cents does not seem to register.
We have legislators whirling around the extremes, calling regulation unconstitutional vs other legislators who seek to protect consumers by substantially increasing regulation. Only thing certain is that when it hits the fan all blame big bad government.
The Sarbanes- Oxley ( SOX) Act following Enron, holds publicly- traded companies and public accountants to higher standards than in prior times. It increased the definition of financial crimes with an emphasis on the balance sheet and attempts to hold CEOs and CFOs personally accountable. Easier said than done to hold top management personally accountable. The SEC and DoJ uses powers granted to prosecute crimes of intentionally misleading investors, mistaking financial reports, accounting fraud and failing to inform shareholders of significant exposures to risk.
SoX was a great law. I backed it 100%. First, we were discussing Dodd/Frank not SOX but moving on. Many.of the top bankers clearly broke SOX but yet, not a one.of them was criminally charged?
Why was that?
Quote:
Asset- backed securities were exempt from regulation.
Timmy Geithner admitting many bankers broke the law but it would be bad for the economy to actually prosecute them. I still can't believe he said this without the people rising up and throwing him out.
The rest of your post is just more ignorant bull**** and not worth the time.
Yes, it was all the middle classes fault. {roll eyes}
All?
What's with the extreme?
There is no question the role seconds played in this mess.
Many middle class and beyond folk who'd previously made reasonable down payments and maintained strong FICO scores sucked the equity out of their homes with the firm belief that the value of their homes would continue to appreciate in compounded double digits indefinitely- thus free money.
Using their homes as an ATMs to live beyond their means enabled the masses to forget their incomes likely were not keeping pace with inflation and millions of jobs were being eliminated by technology substitution and outsourcing.
Texas is, I think, is the only state that had/ has controversial consumer protection laws on their books that prevented or limited the amount of equity that could be withdrawn. These laws reduced the impact of the crash in Texas. Imagine that. A state that sought to protect consumers from themselves.
And then there's the strategic defaults most pronounced in non- recourse states. People who otherwise could make their mortgage payments but instead chose to no longer own an asset worth less than what they owed.
And they tended to rationalize their crimes as pay back to the banks.
It was the culture of greed bottoms -up and top- down.
I'm not the one arguing extremes. I've clearly argued that the fault is spread far and wide. It is you that is trying to cover for the governments corrupt and ignorant actions.
Saw The Big Short last night in a sold out theatre.
It was a tad too long and a bit boring although it contained some swell analogies for intentionally complex sounding Wall Street terminology.
The moral of the story was too Bernie Sanders for my taste, investment bankers and sleazy originators taking advantage of the poor, the stupid and immigrants.
Investment bankers? Hardly. Those were the people to whom 50% of the loans Fannie and Freddie bought to meet HUD's affordable lending goals were made.
No way, no how was this only a private sector fiasco. Fannie and Freddie set the stage by creating huge demand in the mortgage market for high-risk borrowers, and lowering lending standards to meet HUD Affordable Lending goals.
Quote:
It never got into the middle and those with income beyond economic classes who sucked the equity out of their homes to live substantially beyond their means for a blip in time- the absolute mania at the consumer level.
I suspect quite a bit of that went towards paying for their children's college educations. Those costs were skyrocketing at the time, well out of range for all but the rich. With that funding source gone, look at how student loan debt is skyrocketing.
SoX was a great law. I backed it 100%. First, we were discussing Dodd/Frank not SOX but moving on. Many.of the top bankers clearly broke SOX but yet, not a one.of them was criminally charged?
Why was that?
Timmy Geithner admitting many bankers broke the law but it would be bad for the economy to actually prosecute them. I still can't believe he said this without the people rising up and throwing him out.
The rest of your post is just more ignorant bull**** and not worth the time.
The Defense teams of the big banks and multinational corporations, their senior management, their boards and sometimes their largest shareholders made arguments that the domino effects of prosecution would be substantially worse than the crisis itself and therefore a financial settlement, with no admission of guilt, was the appropriate outcome.
These arguments were and remain compelling.
Romney could have taken a different position during his campaign and campaigned a promise to prosecute until every last one of the top management of the banks was behind bars (in a cushy federal prison), come hell or high water. He did not do so. Instead, he took the position of reducing the burdens of regulation on banks.
One of my senators, Dick Durbin, summed it up well in 2009, " The banks frankly own us " , the point made by Happy Texan, many, many posts ago.
BTW, violations of SOX was used by the federal government to settle with the bankers, and was and remains relevant.
The Defense teams of the big banks and multinational corporations, their senior management, their boards and sometimes their largest shareholders made arguments that the domino effects of prosecution would be substantially worse than the crisis itself and therefore a financial settlement, with no admission of guilt, was the appropriate outcome.
Imagine that....the guilty arguing that it would be wrong to prosecute them.
Quote:
These arguments were and remain compelling.
Hardly.
Quote:
Romney could have taken a different position during his campaign and campaigned a promise to prosecute until every last one of the top management of the banks was behind bars (in a cushy federal prison), come hell or high water. He did not do so. Instead, he took the position of reducing the burdens of regulation on banks.
That Romney would have been status quo is one reason I didn't vote for him. Obama did run on this but did nothing. One of the biggest reason he's been an absolute failure.
Quote:
One of my senators, Dick Durbin, summed it up well in 2009, " The banks frankly own us " , the point made by Happy Texan, many, many posts ago.
BTW, violations of SOX was used by the federal government to settle with the bankers, and was and remains relevant.
Settle....steal $800 million and give the government their taste of 20%. Hell of a settlement.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
