The stock market was down about 270 points in midday trading, after the news that Lehman Brothers is headed for bankruptcy. Meanwhile, New York state officials stepped in today to try and help insurance giant AIG, which is facing a credit downgrade, the New York Times reported.
Columnist Paul Krugman says it is uncertain where this will lead. But he asks why we are still unprepared to respond to the financial crisis.
“Even leaving aside the obvious need to regulate the shadow banking system — if institutions need to be rescued like banks, they should be regulated like banks — why were we so unprepared for this latest shock?” Krugman wrote. “When Bear (Stearns) went under, many people talked about the need for a mechanism for ‘orderly liquidation’ of failing investment banks. Well, that was six months ago. Where’s the mechanism?”
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192 Comments
63.51% of Lehman Brothers politcal contributions went to DEMOCRATS!
Obama got more money than anyone.
Biden more than most Senators.
http://www.politicalbase.com/groups/lehman-brothers/13087/
President in 2008
Barack Obama $216,135
Rudy Giuliani $128,100
Hillary Clinton $119,500
John McCain $54,125
Mitt Romney $52,450
Chris Dodd $37,500
John Edwards $21,700
Joe Biden $16,100
Bill Richardson $13,800
Ron Paul $2,250
Fannie Mae and Freddie Mac execs are ECONOMIC ADVISORS to Obama!
Biden voted for the repeal of Glass-Steagal, which kept Wall Street out of mortgage lending.
McCain did not vote for that repeal.
Actually, updated figures would put Obama’s take, from Lehman, at over $300,000!
Money to parties
Democratic $2,403,401
Republican $1,328,091
Other $45,750
Independent $3,500
Green $1,750
Lehman Brothers has always been generous to Democrats.
And, Franklin, what is the claimed relevance of the donations by Lehman to the situation it finds itself in now?
The banks would’ve preferred to be unregulated like the financial institutions (and even though their regulation has been lax) it’s a good thing they didn’t get what they wanted.
But in reality there’s now very little difference between the regulated banks, and what the can do and the other institutions.
Actually, Krugman does not know what he is talking about.
The system HAS changed, since Bear Stearns.
The problem with Bear Stearns, in part, was the damage a Bear Stearns failure would inflict on other firms and on other people.
The Fed has since set up a system that will allow reorganization of Lehman without harming innocent parties.
innoculation VT
You know, as well as I, that if Lehman’s largest contributions were to DEMOCRATS it would be the lead story in the MSM.
Also, the mortgage industry and the Democrat Party have always been very intertwined.
There will be attempts to blame the mortgage mess on Republicans.
Very hard to do, given the political friends of Wall Street and the mortgage giants.
excuse me
You know, as well as I do, that if Lehman’s largest contributions were NOT to Democrats, it would be front page news.
Can you imagine what the media would say, were McCain the largest beneficiary of Lehman’s contributions?
We’ll see whether the system established by the Fed will allow reorganization of Lehman without harming innocent parties as asserted by Franklin is true. Color me dubious, but hopeful.
Well, Franklin, I guess I’m one that doesn’t get all riled up by political donations regardless of the party involved (while again stating that no donations should be allowed by any entity, etc., other than a natural person), and, had the reverse been true, I’d be asking the same question as I posed earlier. So, your response appears to me to be political in nature only, and an implicit admission that the political affiliation of the recipients of Lehman’s largesse has nothing to do with its current financial position.
The “special lines of credit” mentioned in Krugman’s piece appear to be the bases of the system Franklin blogs about. Questions: should AIG be a beneficiary thereof? What about General Motors, Ford, et al?
For what my opinion is worth, the answer to both of the above questions is “no”; just like, IMO, Bear Stearns should not have been the subject of special treatment six months ago.
How can the Republican Party sell that they are the party of regulation? Any McCain stump speech should be nominated for an Academy Award for Comedy. This party has long opposed regulation. And due to this opposition, the disaster we see today is the consequence.
Franklin’s post proves that they give money to all major candidates and both parties.
There is no difference between both parties. One is more evil that the other, but they are both evil.
Please look to vote for other candidates. They are running, you just have to seek them out.
This country needs sound money. Now! You cannot seperate freedom and sound money.
A Gold Standard is not perfect, but it is infinately better than a FIAT currency. The temptation to print too much money is too great a burden to place on man. He always will.
Write your congressman and tell them that you support competing currency bills. It is only a small step to getting back our economic freedom.
You cannot keep putting band aids on the problem. Liquidation must come. Bankruptcies must happen.
Please read this article below.
http://news.goldseek.com/LewRockwell/1221480000.php
May God be with all of you during these tough times. Own real things with real value.
Did that long ago Austrian. A wise friend advised me to move my dollars into gold. Please understand most of this country believes what they are told instead of searching the truth out for themselves.
When Bear (Stearns) went under, many people talked about the need for a mechanism for ‘orderly liquidation’ of failing investment banks. Well, that was six months ago. Where’s the mechanism?”
Bear Stears was no one act show and everbody who is anybody knew it.
Financial rags have been predicting the implosion of big banks and lenders for the past 12 months. Even so, There is nothing that can be done but to let them fall. I think that efforts to “save” these organizations only makes the problem worse in the long run. Politically speaking however, doing nothing is political party suicide.
There’s no point in trying to plug the drain when there is copious amounts of credit contagion that has yet to circle the bowl.
Here is a good primer on the history of the glass-stegal act, it looks like the repubs had tried to get it repealed from about th 1960’s on, and it had been severely marginalized by the time it was finally repealed. Clinton was kind of indifferent on it, but congress wanted it. Also not bush the elder pushed for it. But, hey, Biden voted for the final repeal, so let’s blame him.
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html
Joe Bidens vote did not put that bill over the top. At the time, congress was controlled by the republicans. So the..”lets blame Joe”…line. Doesn’t float.
Boy, have you guys started off base with this tread!!!
The financial crisis has nothing to do with the election campaign.
Get serious about this, things are not looking pretty.
Try associating this with the fact that we purchase our oil with dollars, cold hard cash (thanks to Nixon and the deal he made) and the value of the dollar has dropped 70 percent below the value of the Euro.
We are going bankrupt; even our Federal Reserve banks are going bankrupt with no way pay back on the debts.
The moment we sneeze the wrong way, China will be your new Government.
Think of it this way.
You have lots of property held in Public Storage units.
That storage company goes broke.
Should you forfeit your sofa, TV set or any other property, held in those buildings, due to the landlord going broke?
Of course not!
Likewise, these financial firms “hold” in “streetname” assets on behalf of clients.
These firms do not “own” much of the assets that they hold. There is a role for the government, in such cases. Such a role was recognized, back when SIPC insurance was put in place, and back when the first SEC laws were passed.
My understanding of the Lehman mess? Well, Lehman had a capital infusion, awhile back. As part of that deal, “anti-delution” rules were written into the equity agreement. This meant that any buyer of Lehman stock, in a takeover, would have to buy the stock at an inflated price, compared to the current market. Also, the honchos at Lehman insisted on Federal financing, and the Fed finally had to draw a line, somewhere.
I’m sure oil going up 7 fold in 7 ysrs. has played apart, people have less money after living expense, they can’t afford other costs, such as mortgages.
The act was repealed by a vote of 90 yeas in the Senate, couldn’t find out whether mccain was a present, not voting, or nay. But guess it really didn’t matter. The Senate was dominated by Repubs. under Clinton then.
you still need cash to buy gold when it dips.
From the looks of the mutual fund performance of the last few months, there is plenty of cash sitting around as people have liquidated there loser funds.
gold has only dropped a little. Look for more money to flow into precious metals.
The problem was even before Nixon. When Woodrow Wilson put the Federal Reserve Act into law. it began a chain of events that have slowly funneled the wealth of our nation to a select few.
Central Planning does not work. It never will.
The market must be allowed to correct itself. Bailing out a select few businesses just prolongs the inevitable collapse.
You cannot defeat the laws of nature and economics.
McCain did not vote to repeal Glass-Steagall
Obama did vote to repeal Glass-Steagall.
Poor business plans by Lehman Brothers, Bear-Sterns and Merrill Lynch.
The bigger fish will gobble up the smaller fish or in this case the bankrupt fish.
Too many speculative buyers and sellers in the market, no one has patience and wants a quick buck.
Franklin, from what I read (believe in a piece I posted a link to) the insistence of fed financing was not made by any “Lehman honchos” but by BoA and Barclays, termed “reluctant suitors” in the piece.
Understand that many investments are held in “street name” to facilitate things like transfers on sale, etc. Seems to me that if these are shown as “assets”, there should be a liability or contra-asset account to offset the same on the balance sheet.
Franklin,
Read, “The Case Against the Fed” by Murray Rothbard.
I cannot remember the details off the top of my head, but I can read the book later to site my source, but it was ruled in a court case that property given to banks became the property of the banks to do as they wished.
Banks are a business just like any other. The more reserves they have, the more they can lend out. This is because of the insidious practice of fractional reserve banking. It is a pyramid scheme.
Most people think that when they put money in a fractional reserve bank, that they are storing it there. That is far from the truth. The bank will then loan out 9 times the amount you put into the bank. If they give out a bad loan and go belly up, you lose your money. Not even FDIC can insure all the money to be lost by bigger banks.
It is a ponzi scheme. Buy real things that keep or increase in value. Let that be your bank. Trust me on this folks. i’ve studied this for awhile now, and it is the only way to protect what you’ve worked so hard for.
Regular, by “poor business plans”, I presume (subject to rebuttal) you refer to holding and being involved in packaging the derivatives (CDOs) that underlie the current mess.
I WAS WRONG
Sorry
Obama was not in the Senate at the time.
BIDEN voted to repeal Glass Steagall!
“Franklin
Posted September 15, 2008 at 1:02 pm | Permalink
Actually, Krugman does not know what he is talking about.”
I’ll take Krugman’s credentials and knowledge over Paul’s any day.
SIPC insurance insures “delivery” of securities.
The government has a role in protecting the owners of securities, in the event of a financial problem.
The government does not guarantee the value of that paper. The government DOES guarantee the “delivery” of such paper, upon demand of the owner.
FDIC is taxpayer money anyway. That in itself is ridiculous.
Try and find mccain’s vote on the repeal, I couldn’t locate it.
There are many who disagree with Krugman.
For Krugman to claim that nothing has been done, since Bear Stearns, is simply not accurate.
McCain was not there, I don’t think. Listed as Not Voting.
Don’t try to look at this with party lines.
The Federal Reserve System and FIAT currency must go. It is the only way to ensure long term prosperity for this nation.
Sound money and freedom are inseperable.
Some reporter/interviewer is going to bush whack Palin with a question about the Glass-Steagal act!
Probably didn’t show up to vote.
Franklin is right here folks.
Democrats have a bad solution for our problems.
The Republicans solution is bad too, but not as bad as Obama’s.
Please look at the other candidates. leave the voter booth knowing that you chose the best candidate possible. Not the one who could win or is popular. That defeats the purpose of democracy and is illogical.
#
avtolle
Posted September 15, 2008 at 1:52 pm | Permalink
Regular, by “poor business plans”, I presume (subject to rebuttal) you refer to holding and being involved in packaging the derivatives (CDOs) that underlie the current mess.
——————————————–
Well yes, the CDO’s being the sharp teeth of the declining process, where holdings will have to be sold for reduced priced on the dollar much like Merrill Lynch has done when they took about 10 cents on the dollar.
A question for Austrian_Economist –
You seem to be very well read on the subject.
Do you think we can survive the coming depression if we create a local monetary system?
Phantom
You prove my point.
VT scolds me for making this partisan.
I tell him, honestly, that I am only trying to push back from the Democrats, who I predict will make this very partisan.
Then, on que, you make it partisan!
By the way? Remember that former Republican MOC, Jim Leach?
Gramm, Leach Bliley?
Leach is supporting Obama! Bet Obama does not brag much, about that one.
If you really want to hurt the system. Pay off your debts. Pay them off quickly.
Implement the “snowball effect” on your debt. Pay off the cheapest debt first and then work to the larger. Do not become even heavier consumers in todays climate.
Take your capital and buy strong, honest businesses and real, tangible assets that have value.
The gold standard is for kooks.
It won’t work.
Yes, we have made some mistakes, but the “gold standard” is not the answer to any of the problems that we face.
I would love to see the state of Kansas implement a competing currency law. We could too. The states have the power according to the Constitution. It all goes back to the war of Northern Aggression (Civil War) and why it was fought.
We could use gold or FIAT. One problem is Greshams law:
“Bad money will always drive out good money”
You must have an educated public. They must know that FIAT is paper backed by nothing. Silver and Gold are real and have a store of value. FIAT currency can do nothing but decrease in value. FIAT is backed by faith and nothing more.
Wichita could start by using real money and let it set an example for the state and the rest of the country.
AE
You are nuts.
Gold and Silver have value, why?
Because people say that they have value, in the marketplace.
Same is true of fiat money.
Franklin
Posted September 15, 2008 at 2:08 pm | Permalink
The gold standard is for kooks.
It won’t work.
Yes, we have made some mistakes, but the “gold standard” is not the answer to any of the problems that we face.
__________________________________________________
The Gold Standard has its flaws. Barter is not perfect though. Something must be used for real money. Gold has been popular for centuries as real money.
Gold is better than FIAT. It is better than what we have. Instead of looking at FIATs strengths, you need to look at its weaknesses. You also need to look and Golds strengths and not it weaknesses.
Gold is peoples money. FIAT is government and Leviathan money.
Gold is infinately better than what we have right now!
Franklin
Posted September 15, 2008 at 2:13 pm | Permalink
AE
You are nuts.
Gold and Silver have value, why?
Because people say that they have value, in the marketplace.
Same is true of fiat money.
_________________________________________________
People have said it has value for centuries. Something had to emerge in a free market as money. Gold and Silver have special properties that have made it such.
It is indistinguishable. It cannot be created, it must be mined. It is real. It can withstand forces of nature. It emerged as money by itself.
No doubt alchemy will make a come back according to Austrian Economist. :)
My time is valuable to me, more valuable to me then gold or silver.
Maybe the value of time should be the real store of value.
Actually, the discovery of silver and the discovery of gold have caused economic problems, when we were on metal standards.
Most of the gold, in the world, is found in very unstable countries.
Look at Gold and Silver prices Franklin. It’s value is unchanged, only the price in FIAT dollars has changed.
You could buy a gallon of gas in 1946 with a silver quarter. That same silver quarter today is worth $3.75. Exactly the price of a gallon of gas. Inflation is ruining the dollar.
You cannot inflate Gold or Silver. It is peoples money. You can devalue a FIAT currency and impact those who have saved money their whole lives. It is not fair to tax my life savings through inflation. In fact, it is evil and immoral.
Gold And Silver would protect those savings.
Golds value will increase if no more if found, or if it cannot be mined from unstable countries. Don’t you get it.
My ounce of gold is worth more is there is less of it. If they increase the supply at a steady rate to keep up with the population, the value stays the same.
Years where we mined more were offset by years where we mined less. It takes real production and work to create the money.
With FIAT, all you do is turn on the printing press or hit a button on a keyboard.
Creating more FIAT will decrease the value of FIAT you already have. Why would you want more money created? It is illogical.
Disadvantages
A currency needs to satisfy three functions to become a true representation of transactions between people.[citation needed]
Medium of exchange
Store of value
Delivery of value (energy)
For gold currencies to be valid, the issuer should be able to deliver “value / energy” on redemption of currency. Otherwise, gold currency has no mechanism to satisfy the “delivery of value” function to be real currency.[citation needed]
Gold does not have inherent value/energy so exchange value has to be negotiated during each transaction, hence it cannot act as store of value. During times of scarcities like famine, exchange value of gold goes down drastically.
The total amount of gold that has ever been mined has been estimated at around 142,000 tons.[6] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $7.6 trillion is in circulation or in deposit (although international banking currently practices fractional reserves).[7] Therefore, a return to the gold standard would result in a significant increase in the current value of gold, which may limit its use in current applications.[8] For example, instead of using the ratio of $1,000 per ounce, the ratio can be defined as $2,000 per ounce (or $1,000 per 1/2 ounce) effectively raising the value of gold to $8 trillion dollars. Gold standard advocates consider this to be an acceptable and necessary risk. [9]
Fluctuations in the amount of gold that is mined could cause inflation, if there is an increase, or deflation if there is a decrease.[10] Some hold the view that this contributed to the Great Depression.[11][8]
It is difficult to manipulate a gold standard to tailor to an economy’s demand for money, giving central banks fewer options to respond to economic crises.[12]
Some have contended that the gold standard may be susceptible to speculative attacks when a government’s financial position appears weak. For example, some believe the United States was forced to raise its interest rates in the middle of the Great Depression to defend the credibility of its currency.[11]
If a country wanted to devalue their currency, it would produce sharper changes than the smooth declines seen in fiat currencies.[13]
http://en.wikipedia.org/wiki/Gold_standard
The value of the US economy, alone, can not be represented in gold.
Therefore, this is an obsolete idea.
Here’s what your boys thought about the repeal legislation:
http://www.senate.gov/~rpc/releases/1999/CR3bk110299.htm
They were pushing for it so Weiss at Citigroup could buy Travellers.
I’m impressed I didn’t see the Bridge to nowhere mentioned, or, did it just not get reported yet again?
http://news.yahoo.com/s/ap/20080915/ap_on_el_pr/palin_2
Wrong thread.
“When Bear (Stearns) went under, many people talked about the need for a mechanism for ‘orderly liquidation’ of failing investment banks. Well, that was six months ago. Where’s the mechanism?
———————————————
Pelosis granddaughter ate it?
Maybe Bush will appoint Brownie to be chief regulator of the financial markets.
DOW dropped over 500 pts. today, alot of 401k’s took a hit.
Brownlee would just have to give his job up when Sarah brings in the treasurer of her hometown PTA, for the job.
Franklin, not really scolding; just wondered the relevance, that’s all, given that this has turned into a truly bipartisan mess. :-)
VT – I don’t think “street name” securities are included on a balance sheet.
Ben, I don’t think so either, upon reflection. However, it is likely the same show up somewhere in the mass of regulatory filings that are required of Lehman, et al.
Franklin
Posted September 15, 2008 at 2:32 pm | Permalink
Disadvantages
“Gold does not have inherent value/energy so exchange value has to be negotiated during each transaction, hence it cannot act as store of value. During times of scarcities like famine, exchange value of gold goes down drastically.”
_________________________________________________
Congress sets the value of money according to the constitution. Gold and Silver are this countries only legal tender according to the constitution.
_________________________________________________
“The total amount of gold that has ever been mined has been estimated at around 142,000 tons.[6] Assuming a gold price of US$1,000 per ounce, or $32,500 per kilogram, the total value of all the gold ever mined would be around $4.5 trillion. This is less than the value of circulating money in the U.S. alone, where more than $7.6 trillion is in circulation or in deposit (although international banking currently practices fractional reserves).[7] Therefore, a return to the gold standard would result in a significant increase in the current value of gold, which may limit its use in current applications.[8] For example, instead of using the ratio of $1,000 per ounce, the ratio can be defined as $2,000 per ounce (or $1,000 per 1/2 ounce) effectively raising the value of gold to $8 trillion dollars. Gold standard advocates consider this to be an acceptable and necessary risk.”
_________________________________________________
Prices will stabalize once production increases.
________________________________________________
“Fluctuations in the amount of gold that is mined could cause inflation, if there is an increase, or deflation if there is a decrease.[10] Some hold the view that this contributed to the Great Depression.”
_______________________________________________
The great depression was caused by a central bank.
________________________________________________
“It is difficult to manipulate a gold standard to tailor to an economy’s demand for money, giving central banks fewer options to respond to economic crises.”
________________________________________________
Exactly. The market always liquidates bad business.
_________________________________________________
“Some have contended that the gold standard may be susceptible to speculative attacks when a government’s financial position appears weak. For example, some believe the United States was forced to raise its interest rates in the middle of the Great Depression to defend the credibility of its currency.”
________________________________________________
FIAT is weak. It is paper with no backing. Anything backed with the faith of our government should be laughed at anyway.
________________________________________________
“If a country wanted to devalue their currency, it would produce sharper changes than the smooth declines seen in fiat currencies.”
_________________________________________________
You cannot devalue a tangible asset.
_________________________________________________
I’d like to see a basket of assets backing the currency if we are not going to use gold. However, it must be backed by something real.
How about you wiki the disadvantages of FIAT currency.
#
Franklin
Posted September 15, 2008 at 1:46 pm | Permalink
McCain did not vote to repeal Glass-Steagall
Obama did vote to repeal Glass-Steagall.
======================================================
Right . . . Obama was not in the Senate at the time, so that part of it is useless.
McCain did not vote because he “don’t know nothing ’bout them finances.” After how many years as a Senator? Through how many fiscal crisis? And he admits he doesn’t know much about finances? And you want to bag Obama? Your rose-colored glasses are fogged up beyond repair.
Anyone who believes in Republican values running Federal offices needs a new noggin.
Bush has hired very poor SEC figureheads while President. If not for Attorney Generals in New York State attacking Wall Street fraud, the Feds did nothing.
It began with the Energy meetings headed by Cheney selling out states to Energy providers.
Enron and Natural gas cabal conspired together to make a run at state utilities overcharging them on electricity and gas to run their plants.
Investment banks failing today were trying to game Wall Street helping Enron stay in business.
Those banks dying today is karma! Will CEO’s lose money, nope. Workers will lose jobs and investors are poorer.
Investment banks got go ahead to create fraud in the mortgage industry when Bush was hired for his second term.
The best thing happened, people defaulted on overpriced loans and it’s ruining the greedy investment banks. Otherwise people lives are ruined paying for higher priced mortgages and loans that will bankrupt them quickly.
That’s a Republican value to save the corporation at expense of individuals and families.
What was McCain’s quote today, the economy is still strong? That’s bad advice.
McCain helped international corporation DHL buy Airborne Express 5 years ago, now DHL is selling itself to UPS and 10,000 Ohio jobs are lost.
Who wants McCain’s help anymore?
5 years, 6 colleges journalism degree knows anything about Wall Street schemes? Gov. Palin is no assistance to inventors.
Gov. Palin is no assistance to investors.
Another institution collapses. It’s the exact opposite of what was supposed to happen according to advocates of banking deregulation. When did the Glass-Steagall Act get deregulated? In 1999, under the behest of a Republican congress. The same Republican congress who figured deregulating commodity trading would lead to cheaper products like oil. The good news is they were unsuccessful in privatizing social security and investing that money in the stock market. Imagine how many elderly would be cast into poverty now?
Republicans, continuing in the tradition of failure.
Does anyone listen to Paul’s rants? The Glass-Steagall vote was in 1999, Obama wasn’t in the U.S. Congress at the time. The move towards deregulation was headed by Phil Graham, McCain’s economic adviser.
Isn’t Graham the guy who tells us everything is just fine?
No bth, McCain is telling us everything is fine (but maybe Graham is in his ear). Today Wall St. saw its worse day since 9/11 and he responds with claims that the economy is strong.
Now that the NYSE has dropped to levels when Clinton left office it’s safe to say that after years of Republican dominance in D.C. the country is worse off.
So when a Republican tries to tell you what is good for the economy be sure that he’s only talking about what’s good for his personal economy, not the economy of the nation.
The Chickens Come Home
Cal Thomas
Sept 15, 2008
There is an old Puritan ethic called “living within your means.” In modern times the idea of Puritans and being “puritanical” have come in for much satire and even derision. But it is a fact (just as it is a fact that abstinence is the best practice for avoiding unintended pregnancy and STDs) that living within one’s means is the best way to avoid financial calamity.
Too many have ignored this ethic and bought houses they could not afford and their salaries would not support. Too many lending institutions were happy to lend them the money out of a misplaced faith that home prices would escalate without end and that if disaster occurred the federal government could always bail them out.
This would be understood in the Puritan era as greed. Many are now paying the price for their greediness and failure to live within their means.
We should not fear failure. It is often an excellent teacher if one is open to being taught.
http://foxforum.blogs.foxnews.com/
Remember, the stock market is not the economy. Once upon a time, it was believed to be a reflection of where the economy was going to be at some point in the future. Now, I’m not sure what it means or is, other than it hasn’t borne, IMO, any real relationship to the actual state of the national economy (present or future) for quite a while.
No social security going into the stock market then. Another Bush plan down the drain!
So Frankie? So if Lehman Bros did contribute heavily to Republicans and Democrats made a thing about it, you’d be crying how it meant nothing, wouldn’t you??
SO, your point is?????
Is this a case of “vuja de?” Something we’ve seen before and don’t want to see again? Bank failures, corruption, undue influence, cronyism, insider trading? Flashback to the Keating 5, Bush Jr.’s insider trading in the Harken Energy scandal, and the entire Bush family sucking money out of the S&L scandal, “the biggest theft in the history of the world!” McCain is going to change Washington? Congress’ Ethics committee found him guilty of “poor judgment” for his protection of Charles Keating. Paul Farmer, a physician, said “when we forget history, it’s always the rich and powerful who benefit.” Maybe someone in the media will refresh our memories of The Keating 5 and the Bush family plundering of S&L’s. Bush and McCain have been there, done that.
This is what I love about CON Jobs, just what American posted–for every complex problem in the world, there is a simple CON answer. “Act like Grandpa.”
Cal Thomas doesn’t explain why people suddenly got greedier in 2001 than they were in 1998.
Here’s the real scoop, but I warn you it’s complicated. It’s not just simple CON moralizing.
http://www.motherjones.com/mojoblog/archives/2008/09/9718_mccain_lehman_crisis_gramm.html
As Mother Jones reported in June, eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm’s legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions.
Lehman’s collapse threatens the financial markets because of swaps. From Bloomberg:
Bond-default risk soared worldwide as the collapse of Lehman Brothers Holdings Inc. sparked concern than the $62 trillion credit-derivatives market will unravel….
Lehman, the fourth-largest securities firm until last week, has been one of the 10 largest counterparties in the market for credit-default swaps, according to a 2007 report by Fitch Ratings. The market, which is unregulated and has no central exchange where prices are disclosed, has been the fastest-growing type of so-called over-the-counter derivative, according to the Bank for International Settlements.
“The immediate problem is the derivative default swaps market, in which a plethora of institutional accounts and dealer accounts are at risk,” Bill Gross, manager of the world’s largest bond fund at Pacific Investment Management Co. in Newport Beach, California, said in an interview with Bloomberg Radio yesterday. “It induces a tremendous amount of volatility and uncertainty.”
Barclays Capital analysts have estimated that if a financial institution with $2 trillion in credit-default swap trades were to fail, it might trigger between $36 billion and $47 billion in losses for institutions that traded with the firm. So the Lehman fiasco–caused in part by the use of unregulated swaps–could lead to ruin elsewhere in the economy.
Gramm is responsible for the rise of the wild and woolly $62 trillion swaps market. And he was chairman of the McCain campaign and a top economic adviser for McCain–until he dismissed Americans worried about the economy as “whiners.” After that comment, McCain dumped Gramm. But was Gramm truly excommunicated from McCain land? Last month, he attended a meeting of McCain’s top supporters in Aspen, Colorado. And at a dinner that day, McCain singled out Gramm for praise. Last week, failed Republican presidential candidate Ron Paul revealed that Gramm, now an exec for Swiss banking giant UBS (which also lost billions of dollars due to subprime loans and swaps), had recently called him as part of a McCain effort to win Paul’s endorsement. Paul turned Gramm down. (Both Gramm and Paul are Texas Republicans.) Gramm’s Paul-courting effort seems to indicate that the fellow who has done much to cause the current financial troubles (and who was once considered a possible Treasury secretary should McCain win the White House) is back in the good graces of the McCain campaign.
I especially love the Republican defenders who will not own their party’s astounding, COUNTLESS failures over the last eight years, and pin the failures on the Democratic majority of the past 2 years.
Man up, will ya? Admitting you were wrong is the first step to recovery.
Here’s more from Salon.Com
A stunning factoid from a Bloomberg report on WaMu (Washington Mutual): “One-third of borrowers who bought their homes in the past five years now owe more on their mortgages than their properties are worth, real estate valuation Web site Zillow.com said.” This is partly due to falling home prices but also to the popularity of payment-optional adjustable rate mortgages, the so-called Option ARM Mortgages that allowed users to deduct portions of the monthly payment due and add it to the principal — with the result being that the outstanding loan balance often grew instead of fell. In the second quarter of 2007 Washington Mutual held $52.9 billion of Option ARM Mortgages on its books.
Who was the one of the biggest players in the country in exotic mortgages? Washington Mutual. The company is now paying the price.
Which investment bank bet most heavily on mortgage-backed securities built out of pools of subprime and other exotic mortgage loans? Lehman Brothers. The company is now paying the price.
Which insurance company was one of the biggest players in selling insurance protecting against the default of pools of mortgage-backed securities? American International Group. The company is now paying the price.
Millions of Americans bought houses they could not afford. But they do not deserve all of the blame. They were aided and abetted and encouraged and seduced by mortgage lenders and investment bankers. They were told the exotic mortgage products were a good idea by their own central banker, Alan Greenspan. They were served badly by regulators and politicians — the kind of people who, even today, are saying “the fundamentals of our economy are strong” when, in fact, nothing could be farther from the truth.
Dow had worst day since Sept.2001.
I wrote about this months ago. How the financial empires were feeding at the greed trough, and the result of it. And all I got back was Franklin telling me how stupid I was. Of course, he still wants to blame the democrats, when the politics of the meltdown was pretty much the blame of both sides.
Our glorious leaders in both congress and the white house failed miserably in protecting the general public from the greed, dishonesty, and sheer stupidity of the failed financial institutes. And we’re bailing these bozos out. And McSame’s the Republican answer for changing it? Hey, Republicans, I got a bridge to sell you . . . cheap. Any Democrats stupid enough to buy into this mess, join the bidding.
JMWalker, I got a news flash for you: The stock market is not driven by politics. If it were, I would never ever have started investing in equities in the 1970’s.
The stock market measures fear and confidence in the equities being exchanged.
All this crap about democrats or republicans is nice fluff. But you should only be investing in stock if you have an exhaustive of the performance of the companies you invest in. If you stick with rock solid performers, pay attention to capital budgeting, P/E, dividends, and don’t just look for under valued stock but also look at a companies intrinsic value you will be a wiser investor, and will come out ahead down the road. By low is now and maybe even tomorrow.
Let the idiots cry about the stock market with no conception of what investors really should be looking at. Don’t let the fashionable trends and political movements of government influence your investment decisions. None of them are in the market for the long haul. They know nothing.
PS: Your infatuation with “greed” is really counter investing anyway. Maybe you should stick with the tithe at church.
by = buy
American_Way
Posted September 15, 2008 at 9:04 pm | Permalink
JMWalker, I got a news flash for you: The stock market is not driven by politics. If it were, I would never ever have started investing in equities in the 1970’s.
=====================================================
I never said anywhere the stock market was driven by politics. Politics can affect it big time, but it’s driven by the every day market.
My so-called obsession with greed is nowhere near close. Just why, exactly, are the financial institutions in the trouble they’re in? GREED! They bought in big time the the CMO/CDO binge, and when the market died, the notes became due. If common sense had ruled the roost, this would not have happened.
If you want a plain and simple explanation of what is happening, here it is: Greed, on the part of many financial institutions, led them to make money available to people who could never in a million years pay it back. When you loan money to people with a credit rating of 615, when you loan money to people who lied on the application, without out checking it out, what you see now is what was bound to happen, and greed overrode common sense.
What is happening to the loan industry now, is a return to normalcy and common sense, at least to those who survive. And we’re bailing out too many of them. In a democracy, business should be allowed to both succeed and fail. It ain’t happening.
The big three want “loans” from the government totaling more than 25 billion. They want it for “retooling” so they can build better cars, geared to today’s world, as well as the future. Thing is, they have 60 billion in reserves. Use it to bail themselves out for failing to do what they should have done years ago.
Why didn’t they? Glad you asked: More profits on big cars and trucks. Nothing wrong there, but when does profit get railroaded by greed? When you ask to borrow money, although you’ve still got enough, to bail yourself out of a mess you put yourself into.
I hope you notice I never used partisan politics in this post whatsoever, beyaatch!
It has been that way since our nation was founded and I don’t think it’s restricted to the DNA of either national party – big business wants a government handout whenever they can get one. Most recently a republican president signed into law a bill from a democratic congress to use taxpayer funding to bailout or finance wealthy benefactors of private corporations.
I think greed is behind much of what all of do in life. Business is no different. Politicians of all parties tend to help them.
The tidal wave continues to sweep through the financial institutions. But don’t worry Mccain says the economy is Fundamentally sound.
McCain says the fundamentals of the economy are strong, and anyone who disagrees is insulting the American worker. Now if only Republicans could bring themselves to stop quoting Herbert Hoover they might win the election and we can get another 4 years of borrow-and-spend.
Plus I’m looking forward to his “secret plan” to catch Bin Laden.
If this is sound fundamentals, what does his unsound fundamentals economy look like?
I think his plan is to bring back regulation that his party has deregulated. Or, he has no plan at all past the ‘reform’ line.
John mccain says he’ll appoint a 9-11 style commission to investigate the current economic fiasco. Why, the didn’t listen to them either. Who’d he appoint, Sen. Roberts, maybe Phil Gramm?
Apparently, this was all caused by us being a nation of whiners and the fact that the Democrats won a narrow majority in 2006. Except they’re also the “do-nothing Congress” so they couldn’t have done anything to cause the crisis. Therefore, it’s all in our heads, only a “mental recession.” Fundamentals are always strong, even during an economic meltdown.
Someday they’ll teach McCain-enomics in schools alongside Creationism. That is, unless liberals get in the way.
Here is a “right wing” editorial right out of “right wing” San Francisco:
Carolyn Lochhead
Obama Needs a Sister Soulja Moment
Democrats are ignoring their own counsel to campaign as if John McCain’s running mate is George Bush. While urban sophisticates look in horror at Alaska Gov. Sarah Palin as a kind of reality show run amok, John McCain has gained his first lead in the Real Clear Politics electoral college map. Battleground polls are tightening in dangerous places for Barack Obama, like Minnesota, where the latest poll now has the two men tied.
The more Palin is attacked, the higher her currency rises. Call it the Hillary effect, especially among older, independent women. The Obama campaign is rolling out Joe Biden today to accuse Republicans of going into the gutter. They’re getting sucked right into the partisan wars that Republicans are so adept at. Gone is Obama’s post-partisan image that undergirded his astonishing rise.
Obama needs a Sister Souljah moment to distinguish himself to independent and weak Republican voters who are agreeing with GOP claims that Obama is a classic liberal Democrat, and sliding right into the familiar ground of the culture wars. Obama has a golden opportunity with the U.S. financial system falling apart at the seams.
Congressional Democrats were and remain the leading defenders of Fannie Mae and Freddie Mac, promising to resist efforts to shrink the companies, now under government control, and sell off their assets. Democrats had plenty of help from Republicans, to be sure, but it was mainly conservatives who have been warning for more than a decade that their public risk/private profit model was a disaster waiting to happen.
If Obama were to use the financial crisis to rise again above partisan orthodoxy, he might shake people out of their party ruts that they are fast falling into. He would have to do so in a way that people understand — borrowing from the master, Bill Clinton. Obama’s unwillingness to take on his own party is his weakness and McCain’s strength.
And where is Bill? Maybe he’ll do whatever he’s asked, as he promised last week. Or maybe he’s waiting for Obama’s public apology for standing by silently as his surrogates painted the “first black president” as a racist.
The last time a non-Southern Democrat won the White House was in 1960. Obama needs to figure out how to connect with voters he has been unable to reach, and do it fast, because they’re making up their minds now.
Posted By: Carolyn Lochhead (Email) | September 15 2008 at 07:36 AM
http://www.sfgate.com/cgi-bin/blogs/sfgate/author?blogid=14&auth=52
To answer the question posed by this thread –
It’s because CONs such as John S (for Senile) McCain the Third (for Shrub’s 3rd term) think “the economy is fundamentally sound.”
(Herbert Hoover’s Greatest Hit, that one.)
It’s not going to be a clean break from the past. It never is in real life.
Feudalism gave way to mercantilism which gave way to corporatism which was pulled back from monopolism and has devolved into privatized profits and socialized losses to plutocratic bullying of democracy and the Constitution itself.
But there’s got to be a better way for people to manage the wealth and energy and imaginations and work ethic and morality and aspiration and compassion of a great people.
The Republic Party isn’t the answer. Because 30 years of the Republic Party have gotten us into the mess we’re in.
Yeah, there were Democrats who got in on the screw-ups along the way. CONservative Democrats, mostly, although Republic Party zealots refuse to acknowledge such creatures exist.
Corporatism can’t solve the problem. In the spirit of Ronald Reagan, “Corporatism IS the problem.
And Socialism isn’t the answer. If fact “socialism” has been reduced to the working definition of anything that makes CONs cranky. It’s a meaningless term anymore.
We have to come up with a better way to deal with wealth and effort and gifts and disadvantages and imagination and caution and resources and consequences and faith and science and truth and lies and ambition and wealth and poverty and defeat and hope and desperation and love and hate and answers and questions…
The corporate model doesn’t work anymore.
Fannie Mae and Freddie Mac shoveled MILLIONS into the pockets of Democrat candidates.
Fannie Mae and Freddie Mac shoveled MILLIONS into the pockets of Jesse Jackson and other liberal Democrat groups.
The Real Culprits In This Meltdown?
Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it’s dysfunctional, Democrats during the Clinton years are a prime reason for it.
Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the “trickle-down” economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.
But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.
But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.
At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.
The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today’s nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.
And the worst is far from over. By the time it is, we’ll all be paying for Clinton’s social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.
There’s a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we’ll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.
But the government-can-do-no-wrong crowd just doesn’t get it. They won’t acknowledge the law of unintended consequences from well-meaning, if misguided, acts.
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government’s fingerprints all over it.
http://news.yahoo.com/story//ibd/20080915/bs_ibd_ibd/20080915issues01
Don’t mind Pall- he’s still working on his hypothesis that Herbert Hoover was a stealth Democrat and that his vast welfare programs were the primary cause of the great depression.
Is Paul arguing that Phil Gramm is a Democrat now? This is the same Paul who thinks Obama was in the Senate in 1999 and was a member of the Weathermen when he was six.
Paul, stop drinking the bong water.
Jed
Actually, the gold standard has something to do with the Great Depression.
It forced us to do the wrong thing, and tighten money.
Also, perhaps, anti-semitism, since the first bank allowed to fail was a Jewish bank.
Maggot
I clearly had a typo, above, and corrected myself before anyone else noticed.
Biden voted for the repeal of Glass-Steagal!
Also, the “Leach” in the Gramm Leach Bliley bill?
Leach supports OBAMA!
Kudlow’s take on Fannie and Freddie:
http://article.nationalreview.com/?q=NjFlMjNkMjRlNDUwNGQwMWIyMGEwNmE3MWVhYzgyMjg=#more
The investment bank problems tie into the Freddie Mac and Sally Mae troubles. Their powerful lobby was able to keep regulators off their backs.
Did you know that the top three recipients of Freddie Mac and Sally Mae contributions were Democrats? Number one is Chris Dodd. Number Three is John Kerry. Guess who is Number two? Yup…
Barrack Obama.
Sally = Fannie
Obama nailing McCain to the wall:
http://www.youtube.com/watch?v=BGxx0VGLg90
Palin gives what passes for a plan from the Bush, er, McCain campaign (reform “outdated regulations” by “removing obstacles to business”):
http://www.youtube.com/watch?v=aIKsTTevQBI&NR=1
The wonkish details from the same appearance(something you won’t get from McCain or Palin:
http://www.youtube.com/watch?v=mp7i66YtOXw
Did you know that the top three recipients of Freddie Mac and Sally Mae contributions were Democrats? Number one is Chris Dodd. Number Three is John Kerry. Guess who is Number two? Yup…
Barrack Obama.
Link?
I do know that Gramm spearheaded the effort to repeal Glass-Stegal.
And Biden voted for the repeal of Glass-Stegal
And Bill Clinton signed the repeal of Glass-Stegal.
And McCain did not vote for it.
You can bet your bottom dollar Kudlow was a strong advocate for the repeal of glass-steagal. He’s a Repub. shill.
It was the Gramm-Leach’Bliley act that repealed glass-steagal, with a solidly repub. congress. Pres. Clinton shares some blame he should have never appointed Rubin.
All Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008
(Grand total, Pacs, individuals)
Dodd, Christopher J S CT D $165,400 $48,500 $116,900
Obama, Barack S IL D $126,349 $6,000 $120,349
Kerry, John S MA D $111,000 $2,000 $109,000
Bennett, Robert F S UT R $107,999 $71,499 $36,500
Bachus, Spencer H AL R $103,300 $70,500 $32,800
Blunt, Roy H MO R $96,950 $78,500 $18,450
Kanjorski, Paul E H PA D $96,000 $57,500 $38,500
Bond, Christopher S ‘Kit’ S MO R $95,400 $64,000 $31,400
Shelby, Richard C S AL R $80,000 $23,000 $57,000
Reed, Jack S RI D $78,250 $43,500 $34,750
Reid, Harry S NV D $77,000 $60,500 $16,500
Clinton, Hillary S NY D $76,050 $8,000 $68,050
Davis, Tom H VA R $75,499 $13,999 $61,500
Boehner, John H OH R $67,750 $60,500 $7,250
Conrad, Kent S ND D $64,491 $22,000 $42,491
Reynolds, Tom H NY R $62,200 $53,000 $9,200
Johnson, Tim S SD D $61,000 $20,000 $41,000
Pelosi, Nancy H CA D $56,250 $47,000 $9,250
Carper, Tom S DE D $55,889 $31,350 $24,539
Hoyer, Steny H H MD D $55,500 $51,500 $4,000
Pryce, Deborah H OH R $55,500 $45,000 $10,500
Emanuel, Rahm H IL D $51,750 $16,000 $35,750
Isakson, Johnny S GA R $49,200 $35,500 $13,700
Cantor, Eric H VA R $48,500 $46,500 $2,000
Crapo, Mike S ID R $47,250 $40,500 $6,750
Frank, Barney H MA D $42,350 $30,500 $11,850
Bean, Melissa H IL D $41,249 $34,999 $6,250
Bayh, Evan S IN D $41,100 $16,500 $24,600
McConnell, Mitch S KY R $41,000 $40,000 $1,000
Maloney, Carolyn B H NY D $39,750 $16,500 $23,250
Dorgan, Byron L S ND D $38,750 $30,500 $8,250
Miller, Gary H CA R $38,000 $31,500 $6,500
Rangel, Charles B H NY D $38,000 $14,750 $23,250
Tiberi, Patrick J H OH R $35,700 $32,600 $3,100
Bunning, Jim S KY R $33,802 $29,650 $4,152
Stabenow, Debbie S MI D $33,450 $32,000 $1,450
Chambliss, Saxby S GA R $33,250 $22,500 $10,750
Menendez, Robert S NJ D $31,250 $30,500 $750
Enzi, Mike S WY R $31,000 $27,500 $3,500
Van Hollen, Chris H MD D $30,700 $11,000 $19,700
Landrieu, Mary L S LA D $30,600 $20,000 $10,600
Murray, Patty S WA D $30,000 $23,000 $7,000
Clyburn, James E H SC D $29,750 $26,000 $3,750
Crowley, Joseph H NY D $29,700 $25,500 $4,200
Sessions, Pete H TX R $29,472 $24,000 $5,472
McCrery, Jim H LA R $29,000 $26,000 $3,000
Hooley, Darlene H OR D $28,750 $19,500 $9,250
Royce, Ed H CA R $28,600 $4,000 $24,600
Renzi, Rick H AZ R $28,250 $28,000 $250
Lieberman, Joe S CT I $28,250 $11,500 $16,750
Baucus, Max S MT D $27,500 $21,000 $6,500
Moore, Dennis H KS D $26,550 $25,500 $1,050
Coleman, Norm S MN R $24,690 $12,000 $12,690
Matheson, Jim H UT D $24,500 $24,000 $500
Schumer, Charles E S NY D $24,250 $1,500 $22,750
Durbin, Dick S IL D $23,750 $14,000 $9,750
Rogers, Mike H MI R $22,750 $21,000 $1,750
Lynch, Stephen F H MA D $22,500 $13,500 $9,000
Rockefeller, Jay S WV D $22,250 $5,000 $17,250
Smith, Gordon H S OR R $22,000 $20,000 $2,000
Mikulski, Barbara A S MD D $21,750 $16,500 $5,250
McCain, John S AZ R $21,550 $0 $21,550
Spratt, John M Jr H SC D $21,500 $17,000 $4,500
Brown-Waite, Ginny H FL R $21,000 $21,000 $0
Davis, Geoff H KY R $21,000 $19,500 $1,500
Velazquez, Nydia M H NY D $20,750 $16,750 $4,000
Baca, Joe H CA D $20,500 $20,200 $300
Alexander, Lamar S TN R $20,500 $20,000 $500
Allard, Wayne S CO R $20,250 $0 $20,250
Neugebauer, Randy H TX R $20,000 $20,000 $0
Nelson, Ben S NE D $20,000 $19,000 $1,000
Salazar, Ken S CO D $19,900 $17,000 $2,900
Jefferson, William J H LA D $19,250 $8,500 $10,750
Byrd, Robert C S WV D $18,500 $8,000 $10,500
Hatch, Orrin G S UT R $18,250 $12,500 $5,750
Miller, Brad H NC D $18,000 $16,500 $1,500
Sherman, Brad H CA D $18,000 $12,500 $5,500
Craig, Larry S ID R $18,000 $15,000 $3,000
Roberts, Pat S KS R $18,000 $18,000 $0
Waters, Maxine H CA D $17,800 $15,000 $2,800
Biggert, Judy H IL R $17,750 $15,500 $2,250
Gerlach, Jim H PA R $17,750 $16,500 $1,250
Reyes, Silvestre H TX D $17,550 $2,000 $15,550
LaTourette, Steven C H OH R $17,500 $17,500 $0
Brownback, Sam S KS R $17,300 $14,250 $3,050
Barrett, Gresham H SC R $17,250 $13,000 $4,250
Watt, Melvin L H NC D $17,250 $13,000 $4,250
Scott, David H GA D $17,000 $13,500 $3,500
King, Pete H NY R $16,750 $1,000 $15,750
Cummings, Elijah E H MD D $16,700 $10,000 $6,700
Grassley, Chuck S IA R $16,500 $14,500 $2,000
Cantwell, Maria S WA D $16,250 $0 $16,250
Domenici, Pete V S NM R $16,226 $7,000 $9,226
Herseth Sandlin, Stephanie H SD D $16,200 $4,500 $11,700
Putnam, Adam H H FL R $15,500 $15,500 $0
Feinstein, Dianne S CA D $15,250 $2,000 $13,250
Brown, Sherrod S OH D $15,000 $15,000 $0
Feeney, Tom H FL R $14,750 $13,500 $1,250
Sununu, John E S NH R $14,750 $0 $14,750
Hinojosa, Ruben H TX D $14,500 $13,000 $1,500
Capito, Shelley Moore H WV R $14,250 $8,000 $6,250
Burr, Richard S NC R $14,250 $13,500 $750
Jackson, Jesse Jr H IL D $14,000 $8,000 $6,000
Meeks, Gregory W H NY D $14,000 $13,500 $500
Cornyn, John S TX R $14,000 $12,000 $2,000
Collins, Susan M S ME R $13,000 $12,000 $1,000
Boxer, Barbara S CA D $12,750 $5,000 $7,750
McHenry, Patrick H NC R $12,500 $12,500 $0
Israel, Steve H NY D $12,050 $10,000 $2,050
Nunes, Devin Gerald H CA R $12,000 $12,000 $0
Davis, Artur H AL D $11,750 $11,500 $250
Martinez, Mel S FL R $11,750 $8,500 $3,250
Roskam, Peter H IL R $11,650 $8,500 $3,150
Pryor, Mark S AR D $11,650 $9,500 $2,150
Webb, James S VA D $11,550 $1,000 $10,550
Doolittle, John T H CA R $11,500 $11,500 $0
Harkin, Tom S IA D $11,450 $6,900 $4,550
Lee, Barbara H CA D $11,250 $11,000 $250
Thune, John S SD R $11,057 $1,000 $10,057
Klein, Ron H FL D $11,000 $11,000 $0
Mahoney, Tim H FL D $11,000 $11,000 $0
Fossella, Vito H NY R $10,750 $7,500 $3,250
Schultz, Debbie Wasserman H FL D $10,750 $9,750 $1,000
Thompson, Mike H CA D $10,600 $1,000 $9,600
Moran, Jim H VA D $10,500 $1,250 $9,250
Kennedy, Edward M S MA D $10,500 $3,000 $7,500
Clay, William L Jr H MO D $10,250 $8,500 $1,750
Payne, Donald M H NJ D $10,100 $5,500 $4,600
Dingell, John D H MI D $10,000 $7,000 $3,000
Lincoln, Blanche S AR D $10,000 $5,500 $4,500
Levin, Sander H MI D $9,800 $0 $9,800
Roybal-Allard, Lucille H CA D $9,800 $5,000 $4,800
Barrasso, John A S WY R $9,500 $9,500 $0
Nelson, Bill S FL D $9,500 $9,000 $500
Napolitano, Grace H CA D $9,300 $8,500 $800
Castle, Michael N H DE R $9,200 $7,000 $2,200
Drake, Thelma H VA R $9,000 $9,000 $0
Dreier, David H CA R $9,000 $7,000 $2,000
Bachmann, Michele Marie H MN R $8,850 $6,500 $2,350
Gonzalez, Charlie A H TX D $8,500 $5,000 $3,500
Lewis, John H GA D $8,500 $4,000 $4,500
Knollenberg, Joe H MI R $8,250 $5,000 $3,250
Moore, Gwen H WI D $8,250 $8,000 $250
Pastor, Ed H AZ D $8,100 $4,500 $3,600
Norton, Eleanor Holmes D DC D $8,000 $3,000 $5,000
Becerra, Xavier H CA D $8,000 $7,000 $1,000
Jackson Lee, Sheila H TX D $8,000 $0 $8,000
Larson, John B H CT D $8,000 $8,000 $0
Lewis, Jerry H CA R $8,000 $7,000 $1,000
Melancon, Charles J H LA D $8,000 $8,000 $0
Walsh, James T H NY R $7,750 $0 $7,750
Corker, Bob S TN R $7,750 $2,000 $5,750
Cramer, Bud H AL D $7,500 $7,000 $500
Cubin, Barbara H WY R $7,500 $5,000 $2,500
Ensign, John S NV R $7,300 $6,000 $1,300
Meek, Kendrick B H FL D $7,250 $6,500 $750
Wilson, Charlie H OH D $7,250 $7,000 $250
Leahy, Patrick S VT D $7,250 $2,500 $4,750
Cleaver, Emanuel H MO D $7,000 $7,000 $0
Marchant, Kenny Ewell H TX R $7,000 $7,000 $0
Thompson, Bennie G H MS D $7,000 $6,000 $1,000
Casey, Bob S PA D $7,000 $6,000 $1,000
Solis, Hilda L H CA D $6,800 $6,500 $300
Gordon, Bart H TN D $6,750 $4,000 $2,750
Pomeroy, Earl H ND D $6,750 $5,000 $1,750
Tiahrt, Todd H KS R $6,500 $6,500 $0
Boyd, Allen H FL D $6,000 $5,500 $500
Capuano, Michael E H MA D $6,000 $5,000 $1,000
Heller, Dean H NV R $6,000 $6,000 $0
Marshall, Jim H GA0 D $6,000 $6,000 $0
Whitfield, Ed H KY R $6,000 $6,000 $0
Klobuchar, Amy S MN D $5,650 $1,500 $4,150
Ross, Mike H AR D $5,550 $3,000 $2,550
McCarthy, Carolyn H NY D $5,500 $5,500 $0
Slaughter, Louise M H NY D $5,500 $5,500 $0
Hodes, Paul W H NH D $5,450 $5,000 $450
Cardin, Ben S MD D $5,300 $500 $4,800
Boren, Dan H OK D $5,250 $5,000 $250
Ackerman, Gary H NY D $5,000 $4,000 $1,000
Andrews, Robert E H NJ D $5,000 $0 $5,000
Camp, Dave H MI R $5,000 $5,000 $0
Cole, Tom H OK R $5,000 $5,000 $0
Davis, Lincoln H TN D $5,000 $5,000 $0
Hill, Baron H IN D $5,000 $5,000 $0
Pearce, Steve H NM R $5,000 $5,000 $0
Perlmutter, Edwin G H CO D $5,000 $5,000 $0
Weller, Jerry H IL R $5,000 $0 $5,000
Snowe, Olympia J S ME R $5,000 $4,000 $1,000
Wicker, Roger S MS R $5,000 $5,000 $0
Davis, Danny K H IL D $4,950 $2,000 $2,950
Chabot, Steve H OH R $4,750 $3,000 $1,750
Honda, Mike H CA D $4,750 $4,000 $750
Price, David H NC D $4,550 $2,050 $2,500
Hagel, Chuck S NE R $4,500 $0 $4,500
Lugar, Richard G S IN R $4,500 $1,000 $3,500
Kaptur, Marcy H OH D $4,350 $1,000 $3,350
McCollum, Betty H MN D $4,350 $0 $4,350
Carson, Andre H IN D $4,250 $4,000 $250
Obey, David R H WI D $4,250 $2,000 $2,250
Salazar, John H CO D $4,250 $4,000 $250
Sanchez, Loretta H CA D $4,250 $3,000 $1,250
Tanner, John H TN D $4,250 $3,500 $750
Cardoza, Dennis H CA D $4,000 $4,000 $0
English, Phil H PA R $4,000 $4,000 $0
Green, Al H TX D $4,000 $4,000 $0
Kilpatrick, Carolyn Cheeks H MI D $4,000 $3,250 $750
Murphy, Chris H CT D $4,000 $4,000 $0
Tester, Jon S MT D $4,000 $3,500 $500
Rodriguez, Ciro D H TX D $3,750 $3,000 $750
Donnelly, Joe H IN D $3,500 $3,500 $0
Matsui, Doris O H CA D $3,500 $2,500 $1,000
Paul, Ron H TX R $3,500 $0 $3,500
Price, Tom H GA R $3,500 $3,500 $0
Schmidt, Jean H OH R $3,500 $2,500 $1,000
Wexler, Robert H FL D $3,500 $3,500 $0
Wyden, Ron S OR D $3,500 $0 $3,500
Biden, Joseph R Jr S DE D $3,300 $0 $3,300
Gutierrez, Luis V H IL D $3,250 $2,500 $750
Harman, Jane H CA D $3,250 $0 $3,250
Hensarling, Jeb H TX R $3,250 $1,500 $1,750
Kennedy, Patrick J H RI D $3,250 $0 $3,250
Ryan, Paul H WI R $3,250 $2,500 $750
Myrick, Sue H NC R $3,200 $1,500 $1,700
Schwartz, Allyson H PA D $3,200 $2,000 $1,200
Diaz-Balart, Lincoln H FL R $3,000 $3,000 $0
Lucas, Frank D H OK R $3,000 $1,500 $1,500
McCarthy, Kevin H CA R $3,000 $3,000 $0
Souder, Mark E H IN R $3,000 $3,000 $0
Udall, Mark H CO D $3,000 $2,500 $500
Bingaman, Jeff S NM D $3,000 $3,000 $0
Levin, Carl S MI D $3,000 $3,000 $0
Stevens, Ted S AK R $3,000 $3,000 $0
Hobson, Dave H OH R $2,850 $0 $2,850
Johnson, Eddie Bernice H TX D $2,825 $1,000 $1,825
Berkley, Shelley H NV D $2,750 $2,000 $750
Jones, Walter B Jr H NC R $2,750 $0 $2,750
Ferguson, Mike H NJ R $2,700 $0 $2,700
Cannon, Chris H UT R $2,500 $2,000 $500
Childers, Travis W H MS D $2,500 $2,500 $0
DeGette, Diana H CO D $2,500 $2,000 $500
Ellison, Keith H MN D $2,500 $2,500 $0
Keller, Ric H FL R $2,500 $2,000 $500
Oberstar, James L H MN D $2,500 $0 $2,500
Serrano, Jose E H NY D $2,500 $1,500 $1,000
Shays, Christopher H CT R $2,500 $2,000 $500
McCaskill, Claire S MO D $2,500 $2,500 $0
Cuellar, Henry H TX D $2,450 $2,000 $450
Markey, Edward J H MA D $2,250 $0 $2,250
Smith, Adam H WA D $2,250 $2,000 $250
Butterfield, G K H NC D $2,000 $2,000 $0
Costa, Jim H CA D $2,000 $2,000 $0
Foster, Bill H IL D $2,000 $2,000 $0
Grijalva, Raul M H AZ D $2,000 $2,000 $0
Hastings, Doc H WA R $2,000 $2,000 $0
Moran, Jerry H KS R $2,000 $0 $2,000
Murphy, Patrick J H PA D $2,000 $2,000 $0
Olver, John W H MA D $2,000 $2,000 $0
Porter, Jon H NV R $2,000 $2,000 $0
Regula, Ralph H OH R $2,000 $0 $2,000
Reichert, Dave H WA R $2,000 $2,000 $0
Sanchez, Linda H CA D $2,000 $2,000 $0
Sires, Albio H NJ D $2,000 $2,000 $0
Tauscher, Ellen H CA D $2,000 $2,000 $0
Akaka, Daniel K S HI D $2,000 $2,000 $0
Cochran, Thad S MS R $2,000 $2,000 $0
Whitehouse, Sheldon S RI D $2,000 $1,000 $1,000
Allen, Tom H ME D $1,950 $0 $1,950
Stearns, Cliff H FL R $1,850 $1,850 $0
DeLauro, Rosa L H CT D $1,750 $1,000 $750
Towns, Edolphus H NY D $1,750 $0 $1,750
Hulshof, Kenny H MO R $1,700 $1,250 $450
Fattah, Chaka H PA D $1,500 $1,000 $500
Neal, Richard E H MA D $1,500 $1,500 $0
Diaz-Balart, Mario H FL R $1,450 $1,000 $450
Kucinich, Dennis J H OH D $1,349 $0 $1,349
Alexander, Rodney H LA R $1,250 $1,250 $0
Carnahan, Russ H MO D $1,250 $1,000 $250
Wilson, Heather A H NM R $1,250 $0 $1,250
Coburn, Tom S OK R $1,250 $0 $1,250
Feingold, Russ S WI D $1,250 $0 $1,250
Kyl, Jon S AZ R $1,250 $0 $1,250
Linder, John H GA R $1,150 $500 $650
Sestak, Joe H PA D $1,150 $0 $1,150
Specter, Arlen S PA R $1,100 $350 $750
Berry, Marion H AR D $1,000 $1,000 $0
Blackburn, Marsha H TN R $1,000 $1,000 $0
Boswell, Leonard L H IA D $1,000 $1,000 $0
Boucher, Rick H VA D $1,000 $1,000 $0
Boustany, Charles W Jr H LA R $1,000 $1,000 $0
Calvert, Ken H CA R $1,000 $1,000 $0
Campbell, John H CA R $1,000 $1,000 $0
Cazayoux, Donald J H LA D $1,000 $1,000 $0
Conaway, Mike H TX R $1,000 $1,000 $0
Cooper, Jim H TN D $1,000 $500 $500
Ellsworth, Brad H IN D $1,000 $1,000 $0
Filner, Bob H CA D $1,000 $0 $1,000
Graves, Sam H MO R $1,000 $1,000 $0
Hayes, Robin H NC R $1,000 $0 $1,000
Higgins, Brian M H NY D $1,000 $1,000 $0
Johnson, Hank H GA D $1,000 $0 $1,000
Latham, Tom H IA R $1,000 $1,000 $0
Lofgren, Zoe H CA D $1,000 $0 $1,000
McNerney, Jerry H CA D $1,000 $1,000 $0
Michaud, Mike H ME D $1,000 $1,000 $0
Mitchell, Harry E H AZ D $1,000 $1,000 $0
Musgrave, Marilyn H CO R $1,000 $0 $1,000
Ortiz, Solomon P H TX D $1,000 $1,000 $0
Rush, Bobby L H IL D $1,000 $0 $1,000
Schiff, Adam H CA D $1,000 $1,000 $0
Scott, Robert C H VA D $1,000 $0 $1,000
Smith, Chris H NJ R $1,000 $0 $1,000
Space, Zachary T H OH D $1,000 $1,000 $0
Terry, Lee H NE R $1,000 $0 $1,000
Walberg, Tim H MI R $1,000 $0 $1,000
Welch, Peter H VT D $1,000 $1,000 $0
Wolf, Frank R H VA R $1,000 $1,000 $0
Dole, Elizabeth S NC R $1,000 $0 $1,000
Lautenberg, Frank R S NJ D $1,000 $0 $1,000
Christian-Green, Donna D VI D $750 $0 $750
Inslee, Jay R H WA D $750 $0 $750
Duncan, John J Jr H TN R $600 $600 $0
Bilbray, Brian P H CA R $500 $0 $500
Bishop, Sanford D Jr H GA D $500 $500 $0
Castor, Kathy H FL D $500 $0 $500
Edwards, Donna H MD D $500 $0 $500
Hinchey, Maurice H NY D $500 $0 $500
LaHood, Ray H IL R $500 $0 $500
Mack, Connie H FL R $500 $0 $500
Pascrell, Bill Jr H NJ D $500 $500 $0
Pickering, Charles “Chip” Jr H MS R $500 $500 $0
Rehberg, Denny H MT R $500 $0 $500
Sarbanes, John H MD D $500 $0 $500
Shadegg, John H AZ R $500 $0 $500
Skelton, Ike H MO D $500 $500 $0
Smith, Lamar H TX R $500 $500 $0
Stark, Pete H CA D $500 $500 $0
Weldon, Dave H FL R $500 $0 $500
Wu, David H OR D $500 $0 $500
Graham, Lindsey S SC R $500 $0 $500
Brown, Corrine H FL D $450 $0 $450
Turner, Michael R H OH R $375 $0 $375
Hastings, Alcee L H FL D $300 $0 $300
Warner, John W S VA R $300 $0 $300
Aderholt, Robert B H AL R $250 $0 $250
Arcuri, Michael H NY D $250 $0 $250
Carney, Chris H PA D $250 $0 $250
Dicks, Norm H WA D $250 $0 $250
Lampson, Nick H TX D $250 $0 $250
Manzullo, Don H IL R $250 $0 $250
Platts, Todd H PA R $250 $0 $250
Watson, Diane E H CA D $250 $0 $250
Weiner, Anthony D H NY D $250 $0 $250
DeMint, James W S SC R $250 $0 $250
Sanders, Bernie S VT I $250 $250 $0
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
Phantom
I believe that the majority of Dems voted for repeal.
Biden joined 90 senators in voting for the conference report, but voted against the Senate version of the bill.
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=106&session=1&vote=00105
P.S. The conference report vote:
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=106&session=1&vote=00354
McCain missed that vote.
As you can plainly see Biden voted against the bill when McCain voted for it.
McCain’s absence from the final House-Senate conference agreement doesn’t change that one bit.
While the repeal of Glass Steagall certainly contributed to the situation involving subprime mortgage lending, which has mushroomed into the so-called “cash crunch” of today, due to the ability of banks and others to package the loans into securities as the result thereof, there was nothing in the repeal to my knowledge that forbade regulation of nonbank financial institutions on the same basis as commercial banks. Thus, instead of fighting about who was responsible for the repeal of said act, it seems to me the issue is who was responsible for removing any mortgage lending regulations from commercial banks; and who was responsible for blocking any attempts at regulating non-bank financial institutions activities in the mortgage arena, if one is trying to assess blame. “Who” in the above refers to the party or parties (political) in control of the Congress at the time such regulation was removed if by statute; and, if statutory basis found for blocking regulation exists, the sponsoring party therefor.
Rage
If Biden voted for the conference report, then BIDEN VOTED FOR REPEAL!
av
Fannie and Freddie both USED their political connections to thwart legislators.
McCain, actually, tried to regulate Fannie and Freddie back in 2005, and was fought tooth and nail by the lenders, and their friends in Washington.
Okay, a bunch of people associated with mortgage giants gave a bunch of money to Obama. Presumably that implies he would have been their water boy.
The dollars alone don’t tell the story (were that, Arizona would have elected Richard Kimball instead of McCain).
What questionable actions has Obama taken as a Senator, to indicate that he’s someone in their pocket?
I’ll wait.
Don’t really care about Fannie and Freddie as such; I am more concerned about the attempts to regulate or deregulate the loan initiators and packagers.
Roll Call on conference report (final passage)
http://www.govtrack.us/congress/vote.xpd?vote=s1999-354
Should have said
Fannie and Freddie both used their political friends to thwart REGULATORS and legislation that would have restricted them.
Rage
If Biden voted for the conference report, then BIDEN VOTED FOR REPEAL!
And your point? I’m not sugercoating it. But if McCain had opposed it, and convinced a few more Republicans to join the vast majority of Democrats who opposed it, there would have been no conference report in the first place. The bill would have died.
In other words |PAULIE| MCCAIN VOTED FOR REPEAL! |/PAULIE|.
Roll Call on conference report (final passage)
http://www.govtrack.us/congress/vote.xpd?vote=s1999-354
I already posted that (and from the original source), you twit.
Don’t really care about Fannie and Freddie as such; I am more concerned about the attempts to regulate or deregulate the loan initiators and packagers.
Good suggestion, vt.
All Recipients of Fannie Mae and Freddie Mac Campaign Contributions, 1989-2008
(Grand total, Pacs, individuals)
Dodd, Christopher J S CT D $165,400 $48,500 $116,900
Obama, Barack S IL D $126,349 $6,000 $120,349
Kerry, John S MA D $111,000 $2,000 $109,000
Bennett, Robert F S UT R $107,999 $71,499 $36,500
Bachus, Spencer H AL R $103,300 $70,500 $32,800
Blunt, Roy H MO R $96,950 $78,500 $18,450
Kanjorski, Paul E H PA D $96,000 $57,500 $38,500
Bond, Christopher S ‘Kit’ S MO R $95,400 $64,000 $31,400
Remarkable, isn’t it, how Obama obtained so much contribution money from Fannie Mae and Freddie Mac so fast.
Well, outlander, you can join the club of thinking people (if you wish), and demonstrate what Obama actually did that was so nefarious.
When Richard Kimball ran against Congressman McCain in 1986, his mantra was “follow the dollars”–the alarming degree to which McCain took defense contractor money. The presumption (based on his record) was that McCain was supporting military pork due to being in their pocket. He suceeded in convincing a majority of Arizona voters that being a tool of the military-industrial complex was a good thing.
As they say in Missouri, show me. What did Senator Obama do from 2005 on to somehow create or exacerbate this crisis?
I’ll wait.
From what I’ve read the glass-steagal act was weakened well before its final repeal. Repubs. had pushed to get rid of it since 1980’s so I assume they did it piecemeal.
outlander posted September 16, 2008 at 6:13 pm
“Remarkable, isn’t it, how Obama obtained so much contribution money from Fannie Mae and Freddie Mac so fast.”
——————
A comment posted at outlander’s source.
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
“It would be much more helpful to see the totals as a percent of campaign contributions. As I pointed out on your earlier report, a dollar is much less likely to influence a legislator who has contributions of a million dollars than a legislator who has contributions of 100K.
This is especially telling with anyone who has run for president. Barack Obama has received contributions of over $400M. Against that, any contributions he received from Fannie and Freddie is tiny. “
FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005
The United States Senate
May 25, 2006
Section 16
Record Text
Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
Quick Info
S. 190 [109th]: Federal Housing Enterprise Regulatory Reform Act of 2005
Last Action: Committee on Banking, Housing, and Urban Affairs. Ordered to be reported with an amendment in the nature of a substitute favorably.
Status: DeadI join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16
A comment posted at outlander’s source.
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
That’s an excellent point. Is opensecrets.org conflate all contributions? It would make more sense to separate them out (i.e. Senate campaign and president campaign), the way the FEC does.
I guess it was the banking industry that wanted repeal since 80’s.
Congress > Congressional Record > May 25, 2006
FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005
The United States Senate
May 25, 2006
Section 16
Record Text
Sen. John McCain [R-AZ]: Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
I urge my colleagues to support swift action on this GSE reform legislation.
(sorry for the double post, hard to cut and paste out of the Congressional Record, this one worked better)
Looks like Elizabeth Dole was on board.
Looks like there were not any Democrat Co-sponsors:
Sen. Charles Hagel [R-NE] Sponsor
Cosponsors [as of 2007-01-08]
Sen. Elizabeth Dole [R-NC]
Sen. John McCain [R-AZ]
Sen. John Sununu [R-NH]
I guess it was the banking industry that wanted repeal since 80’s.
Since a simple majority was all that was required on the vote it wouldn’t have mattered if all the dems. had voted no.
McCain “R”, Dole “R”, Sununu “R” All co-sponsored the Hagel “R” bill to regulate Fannie Mae and Freddie Mac.
According to Rage’s link the most liberal senators (Wellstone, Dorgan, Feinhold) voted against it. So once again the liberals were in the right. Go figure.
What Paul tries to avoid is the fact that the Republicans were in the majority. So even if every Democrat voted against it the Republicans could have still passed it. Yet Paul wants to ignorantly blame the Democrats as usual. If it wasn’t for the Republicans it would have never come up for a vote.
Maggot
Democrat President Bill Clinton signed the bill.
Moreover, since that time, McCain has fought for legislation to regulate Fannie Mae and Freddie Mac.
Dems. should take a lesson, vote with the repubs. and live to regret it.
Rage
Posted September 16, 2008 at 6:28 pm | Permalink
A comment posted at outlander’s source.
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
——————
Rage, that is not my source.
cosmos_originally
Posted September 16, 2008 at 6:24 pm | Permalink
outlander posted September 16, 2008 at 6:13 pm
“Remarkable, isn’t it, how Obama obtained so much contribution money from Fannie Mae and Freddie Mac so fast.”
——————
A comment posted at outlander’s source.
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
————-
Cosmos, that is not not my source.
The legislation to which Paul refers was written by Senate Chuck Hagel, and went before McCain’s own committee. McCain did indeed support it.
It never made it out of committee.
This is Hagel’s own description of it:
he housing GSEs, however, are uncommon institutions with a unique set of responsibilities and stakeholders. Fannie and Freddie are chartered by Congress, limited in scope, and are subject to Congressional mandates, yet they are publicly traded companies with all the earnings pressure that Wall Street demands. Additionally, Fannie and Freddie enjoy an implicit
[Page: S600] GPO’s PDF
guarantee by the Federal Government that has aided them in developing substantial clout on Wall Street. With their influence in the markets, their ability to raise capital at near-Treasury bill rates, and their use of the most sophisticated portfolio management tools, Fannie and Freddie today are no longer simply secondary market facilitators for mortgages.
The significance of Fannie Mae and Freddie Mac to our economy cannot be overstated. Together, the companies own or guarantee roughly 45.6 percent of all mortgage loans in the United States. The companies combined have issued over $3.9 trillion in obligations comprised of $2.2 trillion in mortgage backed securities and $1.7 trillion of GSE debt.
It is clear that the recent revelations at both Freddie Mac and Fannie Mae precipitate the need for Congress to address GSE regulatory reform. In 2003, Freddie Mac found itself treading through a wave of accounting problems and questionable management actions. That led to an income restatement of $5 billion, a penalty of $125 million and the removal of several members of its executive management. One year later, a similar surge of questionable practices was discovered at Fannie Mae. That led to the retirement and resignation of two of Fannie Mae’s top management officials, as well as last month’s ruling by the Securities and Exchange Commission, SEC, that Fannie could face a $9 billion income restatement.
At a minimum, the bar for a GSE should not be held lower than it is for any other company. In fact, given its congressionally chartered mission to serve a public interest, the bar should be held significantly higher. The operations of such companies should be managed with uncompromising integrity and unabridged transparency.
Our legislation would create a new independent world class regulator for Fannie Mae, Freddie Mac and the Federal Home Loan Banks. Our bill provides the new regulator with enhanced regulatory flexibility and enforcement tools like those afforded to the Federal Deposit Insurance Corporation, the Federal Reserve System, the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Furthermore, the bill would:
Provide the new regulator the authority of receivership to close down a failing GSE and protect against a taxpayer bailout; provide the new regulator greater discretion in raising capital standards to protect against insolvency; provide the new regulator approval power over new programs and activities proposed by a GSE; provide the regulator with greater authority to limit exit compensation packages or golden parachutes for executives removed for cause; require the annual audits of Fannie Mae’s and Freddie Mac’s affordable housing programs to ensure that these programs support the enterprises’ affordable housing mission; end presidential appointments to the board of directors of Fannie Mae and Freddie Mac, and would require all Federal Home Loan Bank directors to be elected.
This reform is important to restoring and maintaining the confidence that investors and the markets require. In light of the recent problems at Freddie Mac and Fannie Mae, it is even more important. I urge my colleagues to support this reform effort and invite them to cosponsor our bill.
http://thomas.loc.gov/cgi-bin/query/F?r109:9:./temp/~r1096J3kbx:e217157:
I’ll give McCain credit (Hagel far more) for actually noticing the obvious and wanting to do something about it. Barack Obama had been a Senator for exactly 23 days when this legislation was introduced, and he wasn’t on that committee.
Rage, that is not my source.
Then post yours–the figures are ths same.
Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190
That act was just an attempt to privatize the industry wasn’t it?
How would that have helped anything?
A comparison on Fannie Mae-Freddie Mac contributions.
McCain, John S AZ R $21,550 $0 $21,550 – 20 years
Obama, Barack S IL D $126,349 $6,000 $120,349 – 4 years
This whole debacle is hardly a partisan effort on any party. It was bi-partisanship that allowed it to go on, even when the signs were there almost a decade ago. Business and congress walked down the aisle hand in hand on this one. Now, the divorce papers have been filed, and the infighting starts.
Franklin claims it was Clinton’s fault, but nothing could have been done without congress, which was Republican controlled at the time. It took both parties to do this; both parties need to admit it and take steps to eliminate the possibility of it happening again.
Now for business. The financial businesses played Russian roulette with other peoples money in the form of CMO/CDO’s. They banked on people paying their mortgage payments. That seemed to be an iffy proposition, since they were loaning money to people with 615 credit ratings, loaning money to people falsifying loan apps, without checking the numbers, and loaning money to basically anybody who could sign their name.
What the financial institutions did, they did out of greed–plain and simple. Now, after people, who actually knew what they were talking about, warned them of the consequences, and having ignored the warnings, those same financial institutions are begging for government handouts.
Funny thing is, this is the big leagues, and, in the big leagues, some teams succeed and some fail. We don’t need to be bailing out any of them. Capitalism doesn’t work that way; communism does.
The big three want a handout as well. To the tune of over 25 billion. They have 60 billion on hand already. They want the loans to retool the industry to make better, more efficient cars. So they want us, the taxpayers, to pay for it, then charge us even more for the cars.
Funny how Japan, Korea and others are doing quite well on the American market, making better, more efficient cars right here in the states. Why? They look at the world, not just their respective countries. Perhaps the big three could use their own money, retool, and take a lesson from foreign auto manufacturers. . . . nahhhh, makes too much sense.
outlander posted September 16, 2008 at 7:01 pm
“Cosmos, that is not not my source.”
—————
The numbers you posted are not originally from here?
http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
If not, then post your source.
I don’t know about Korea (but I suspect they follow the Jap.line) the Japanese corporations are extremely intertwined between govt. and business. Especially in the area of R&D.
All they had to do was prosecute the wrongdoers at the type, not try and pass a bill to take over the GSE’s.
What mccain was railing about was the corp. padding the numbers to hit bonuses for top mgmt., not anything about the quality/integrity of the loans.
type=top
The Obama-Fannie-Freddie Connection
Obama’s two economic advisors are former Fannie Mae and Freddie Mac CEO’s who may have pulled strings to give Obama a “heads up” on the recent government bail-out plan. Washington Prowler has the story:
When President George W. Bush nominated Henry Paulson to serve as Treasury Secretary, Republicans raised a red flag that Paulson, who, along with his wife, has strong ties to the Democrat party, would not be an honest broker with Republicans.
That seems to have been borne out, with sources inside of Treasury reporting that Paulson briefed Sen. Barack Obama and his campaign advisers on the Fannie Mae and Freddie Mac bailout plan before offering such a briefing to the McCain campaign.
In fact, the McCain campaign had sought a similar briefing several days ago as word spread that a bailout plan was to be unveiled and had been turned down by Paulson’s senior staff.
The next question is: Why was the Obama campaign so keen on getting advanced word about the bailout?
“They have a huge problem with the mortgage and housing market story, and everyone is missing it,” says a Republican political media consultant with ties to the Obama campaign due to the bipartisan nature of the firm he does work with.
“You look at Obama’s economic advisers, the guys he has counted on from day one and who have raised him a ton — and I mean a ton — of money: Franklin Raines and Jim Johnson, both of them are waist to neck deep in the mortgage debacle.”
Both Raines and Johnson have served as CEO of Fannie Mae, with Raines taking over from Johnson. Both are key political and economic advisers to Obama.
“How can Obama go out with a straight face and saw it was Republicans who made this mess, when it is his key advisers who ran the agencies that made the big mess what it is?” says a Democrat House member who supported Sen. Hillary Rodham Clinton. “It’s his people who are responsible for what may well be the single largest government bailout in history. And every single one of them made millions off the collapse that are lining Obama’s campaign coffers. If the McCain campaign lets this one go, they deserve to lose.”
It isn’t just Fannie Mae where Obama has a problem. Another close political adviser, in fact the one man responsible for rallying support for Obama early on among Congressional Democrats, is Rep. Rahm Emanuel, who served on the Board of Directors for Freddie Mac after leaving the Clinton White House. According to Freddie Mac insiders, Emanuel during his time on the board opposed every reform proposed by the Bush Administration that would have impacted Freddie and Fannie Mae.
Emanuel claimed to be neutral in the primary race between the wife of his old boss and his longtime Chicago acquaintance, Obama. But the chairman of the House Democratic Caucus, who would be first in line for the vacated Senate seat of Obama should he win the presidency, quickly dumped Clinton when it was clear Obama had a head of steam for the nomination.
“We ought to be able to — rightly — hang the Fannie and Freddie scandal around the neck of Obama, if they can get out in front,” says a House Republican. “Middle-class folks’ mortgages are probably safe, but the American taxpayer will also be paying for this scandal for years to come.”
Possibly this connection may (or may not) inspire the Clinton’s to join the rush to the November 4 finish line. After all — Fannie Mae and Freddie Mac were created under Clinton’s administration.
It’s possible President Bush could have avoided some of this by his HUD secretary, Mel Martinez, undoing Andrew Cuomo’s rules. But can you imagine the grief he would have gotten for making houses harder to buy, especially for those on the lower rungs of the economic ladder, with the likes of Barney Frank and Paul Krugman on the opposing side?
This was the perfect liberal operation: The righteous cause of home ownership for those on the lower rungs of the economic ladder. Pockets padded for fellow cronies. And the blame for the inevitable crisis going to Republicans. Perfect. Bill Clinton is a genius.
Deliver us from any more displays of Clinton’s genius. Include in that display the election of Barack Obama — expecially if Obama’s economic programs are being master-minded by Clinton cronies.
http://overthehilloracles.wordpress.com/2008/09/09/the-obama-fannie-freddie-connection/
Looks like mccain’s in bed with the financial institutions as well as big oil>
http://www.opensecrets.org/pres08/contrib.php?id=N00006424&cycle=2008
Phantom
Privatization would have helped a great deal.
The problem with the “quasi governmental” status is that, whenever a regulator tried to do anything, a quick call to a member of Congress shut down any enforcement or regulation.
These organizations got huge taxpayer subsidies, as far as the rates they charged, along with tax breaks and regulatory exemptions.
These organizations then pumped money back into corrupt political interest group organizations that lobbied for even less restriction on mortgage lending to those who could not afford the loans.
JM
Admit it,
If McCain was the largest beneficiary of Fannie, Freddie and Lehman political contributions, you would be dancing with glee!
He isn’t.
Obama, pretty much IS!
Again
You libs are amazing!
The dem talking points, at first, were that Palin, somehow, got it wrong in saying that these were government organizations that got too big.
You libs claimed that these were NOT govt organizations.
THEN? You say that McCain was wrong in thinking that PRIVATIZING these organizations would have done any good?
How can you privatize something that is not a govenrment organization to begin with?
Outlander, do try to pay attention. This debacle started long before Obama was in the Senate, and Walker’s basically correct–corrupt back-scratching has long been a bipartisan offense.
The argument, near I can tell, is that because McCain supported legislation that actually addressed an obvious problem (going, incidently, against his “no regulation” mantra now), and Obama supposedly received a lot of money from them, this means. . .what?
Are we then to presume that the candidate offering more distastrous deregulation, actually wants to regulate the financial markets, while the one who is offering very specific regulations will just let business-as-usual persist?
Wow.
Fascinating hypothesis. Please go on.
Fannie and Freddie are hybrids.
#
Franklin
Posted September 16, 2008 at 7:24 pm | Permalink
JM
Admit it,
If McCain was the largest beneficiary of Fannie, Freddie and Lehman political contributions, you would be dancing with glee!
He isn’t.
Obama, pretty much IS!
==================================================
You couldn’t be more wrong. I am in no way wired like you. I see this whole fiasco as a failing of ALL government. I could care less who got what from whom, nor do I care to gloat on any of it. Not when there are millions of people sweating this whole thing out because of both greedy politicians and greedy financial institutions.
Got a 401K? Chances are, it’s losing money. You want to dangle partisan nonsense, like a carrot on a stick, in front of people, you’re in danger of getting run over by seriously ticked off people.
This is way beyond the partisan bs, but you could never see it: You’re too geared to hatred of anything Democrat.
Reg
Good post, with some clarification perhaps:
“As most readers are probably aware, Fannie Mae got its start during the New Deal as a government-owned creature designed to buy home mortgages from the lender at point of origin in order to free up these banks and savings institutions to make new loans to other borrowers. In the late 1960s, Fannie (Federal National Mortgage Association) was turned into a private company which still gained favorable credit terms by its continuing loose association with the federal government. Freddie Mac (Federal Home Mortgage Loan Corporation) was created at the same time in the late ’60s along the same lines as a smaller version of Fannie Mae. Neither entity is subject to federal or state income taxation and both have long maintained “foundations” whose main aim is to spread cash among favored politicos in Washington. Together these two companies amount to about 70% or so of the total secondary market for home mortgages in which mortgages are bought from the originating lenders and then packaged into tranches which are sold to investors in what is known as a Collateralized Debt Obligation (CDO).
While critics have long complained that the favorable association with the government gives these two an unfair competitive advantage vis-a-vis their straight private rivals and represents a classic example of institutions putting taxpayer dollars at risk by being “too big to fail” the system worked well enough for a long time to make home mortgages more available to borrowers by freeing up the capital needed from the local lender to make more loans. Both institutions were also known for their adherence to a strict “golden rule” (those with the gold make the rules) underwriting policy which in the old days demanded down payments of 20% to avoid private mortgage insurance for borrowers and income/debt ratios that stated borrowers could only have 33% of their monthly gross income going to their mortgage payment and no more than 26% of their monthly income otherwise devoted to installment debt.”
http://wharrison55.newsvine.com/_news/2008/09/08/1839009-fannie-mae-and-freddie-mac-takeover-gives-mccain-a-political-opening
“How can Obama go out with a straight face and saw it was Republicans who made this mess, when it is his key advisers who ran the agencies that made the big mess what it is?” says a Democrat House member who supported Sen. Hillary Rodham Clinton. “It’s his people who are responsible for what may well be the single largest government bailout in history. And every single one of them made millions off the collapse that are lining Obama’s campaign coffers. If the McCain campaign lets this one go, they deserve to lose.”
It isn’t just Fannie Mae where Obama has a problem. Another close political adviser, in fact the one man responsible for rallying support for Obama early on among Congressional Democrats, is Rep. Rahm Emanuel, who served on the Board of Directors for Freddie Mac after leaving the Clinton White House. According to Freddie Mac insiders, Emanuel during his time on the board opposed every reform proposed by the Bush Administration that would have impacted Freddie and Fannie Mae.
Emanuel claimed to be neutral in the primary race between the wife of his old boss and his longtime Chicago acquaintance, Obama. But the chairman of the House Democratic Caucus, who would be first in line for the vacated Senate seat of Obama should he win the presidency, quickly dumped Clinton when it was clear Obama had a head of steam for the nomination.
I’m not too sure how much blame you can put on fannie and freddie, they were just getting stuck holdin packaged b.s. securities sold to them by private industry. In fact that was their mandate. Palin had no clue what she was talking about here either.
Man, you read a lot into posting a few numbers Rage. Who said anything about all that? No time to address now. Gotta go.
I just point out what I point out as part of the conversation. Draw your own conclusions.
“But then in the early to mid 1990s things began to change. Point of origin banks had long been targeted by special interest groups for alleged “red-lining” of loans to poor and minority borrowers in which they either avoided some areas altogether or charged allegedly exorbitant interest rates to less credit worthy borrowers. This resulted in the Community Reinvestment Act of 1977 which was supposed to force banks to devote a certain percentage of their lending to underserved or excluded communities and borrowers. Enforcement, however, was lax. So in the early 1990s the Clinton administration and HUD Secretary Henry Cisneros announced The National Homeownership Strategy: Partners in the American Dream:
. . .It promoted paper-thin downpayments and pushed for ways to get lenders to give mortgage loans to first-time buyers with shaky financing and incomes. It’s clear now that the erosion of lending standards pushed prices up by increasing demand, and later led to waves of defaults by people who never should have bought a home in the first place.
President Bush continued the practices because they dovetailed with his Ownership Society goals, and of course Congress was strongly behind the push. But Clinton and his administration must shoulder some of the blame.
The old underwriting standards at Fannie and Freddie flew out the window in a wave of exotic home mortgages like “interest-only” loans that teased in borrowers to buy more house than they could afford by offering lower initial payments which would reset to possibly higher payments later. Combined with low interest rates promulgated by the Federal Reserve under Chairman Alan Greenspan, ever rising home values in many densely populated markets like southern California and south Florida, speculators who were buying up houses hoping to flip them in short order for profits of as much as 25% in a year and the stage was set for the perfect financial storm as banks, Wall Street and foreign financial markets loaded up with these CDOs. Everyone was making tons of money so who was to worry? Well, some of us with long experience in real estate were but our voices were not heeded.
So in 2007 as inflation rose on the back of increased energy costs and the initial teaser rates for borrowers were set to reset at higher rates requiring higher payments the bubble began deflating with a vengeance. Borrowers already maxed out with debt saw falling property values leave them no hope to refinance their suddenly more expensive mortgages as they had no equity and then the wave of foreclosures began and financial institutions suddenly found that what they assumed to be the golden geese turned out to be pigs in a poke. Many had purchased these securities on credit themselves with little actual cash capital required and some like Bear Stearns found themselves technically insolvent virtually overnight.”
You couldn’t be more wrong. I am in no way wired like you.
Thank anyone’s god for that.
I share your interest, Walker, in objective truth. Sure, I have my biases (who doesn’t?), but I get tired of all the political poo-flinging, wherein truth is irrelevant. Thankfully, there are still people here who care more about being right than “winning” the argument.
Toward the end, I’ll admit an error: looks like, apparently, the Hagel bill made it out of committee, but I don’t think it ever made it the floor for a vote.
Man, you read a lot into posting a few numbers Rage. Who said anything about all that? No time to address now. Gotta go.
Apologies. Paulie was chirping in my ear the whole time.
Saw a guy from AEI on CPAN talking about this very issue with Brian Lamb. The corruption is, predictably, across the board. But I take AEI with a grain of salt, keeping in mind their well-known slant on pretty much everything.
The current defaults aren’t caused by decades old loans.
The current defaults aren’t caused by decades old loans.
Nope. And despite Regular’s post from the American Spectator, we know who has been pushing deregulation down our throats the past 28 years. If we’re going to have a debate about policy, then let’s have a debate about. . .policy!
That won’t stop us from holding malleable politicians’ feet to the fire.
It all boils down to greedy mortgage brokers, finance co’s writing risky loans. Then passing them off, so they could write some more.
Since slamming Obama started this subthread, here’s a taste of the competing Obama-Durbin bill:
Obama, Durbin propose federal mortgage reforms
Wednesday, February 15, 2006
Printable Format
CHICAGO TRIBUNE
By David Jackson
Sen. Barack Obama (D-Ill.) proposed a sweeping set of federal reforms Tuesday to combat mortgage fraud, ratcheting up enforcement and creating a national database of brokers who have been disciplined.
Obama’s bill would increase funding for federal law enforcement programs, create new criminal penalties for mortgage professionals found guilty of fraud and require industry insiders to report suspicious activity.
Mortgage fraud is “robbing thousands of Americans of their dream of homeownership, and costing the mortgage industry hundreds of millions of dollars each year,” Obama said. “Congress needs to come to the table and do its part.”
Obama and the bill’s co-sponsor, Sen. Dick Durbin (D-Ill.), said they were moved to act by a recent Tribune series on mortgage fraud, in which swindlers use high-tech identity theft and face-to-face scams to wrest control of homes, then secure hefty bank loans that go unpaid.
Illinois Atty. Gen. Lisa Madigan and state lawmakers introduced their own reforms in Springfield following the series. During the last five years, FBI reports of mortgage fraud have soared across the U.S.
A Tribune analysis of some 500 Chicago-area cases showed the scams disproportionately affect low-income neighborhoods, where they leave abandoned homes and displaced families. Drug-dealing gangs have adopted the white-collar crime, the paper found, even as lending companies found themselves enmeshed in fraud schemes.
Obama’s bill would authorize $10 million more for anti-mortgage fraud programs in the Departments of Justice and Housing and Urban Development.
It also would require the FBI to update bankers on fraudulent activity in a formal, systematic way. Today, real estate attorneys, companies and trade groups rely on several industry Web sites that use news articles and government press releases to disseminate fraud reports from across the country.
And the bill would establish a national database of mortgage professionals who have been sanctioned by state or federal regulatory agencies.
Several features of the proposed legislation may win consensus because they previously have been embraced by real estate industry groups and law enforcement agencies.
The FBI already has called for mandatory fraud reporting by real estate industry professionals along with safe harbor from liability for those whistle-blowers. A similar system is in place in the banking industry.
Other aspects of the bill could be opposed by real estate and banking interests, experts said.
One provision of the measure would strengthen the ability of fraud victims to file federal lawsuits. Individuals now must seek redress in state courts, which have more restrictive rules about information gathered during discovery, said Peter J. Henning, a Wayne State University Law School professor.
Henning said that could increase the liability banks and real estate companies face for their employees’ misconduct.
“I suspect there would be opposition to that provision,” Henning said.
Others wonder whether the bill fails to cover a large population of unlicensed counselors and operators who commit fraud.
“This law won’t reach people outside the mortgage lending institutions,” said California attorney Rachel Dollar.
But the growing cost of mortgage fraud–lenders suffered more than $1 billion in losses last year–has convinced many industry groups that it must be addressed somehow.
“Folks in the mortgage industry are suddenly concerned about fraud, because they’re losing money too,” said Ira Rheingold, executive director of the National Association of Consumer Advocates, a group of public-interest attorneys who support the legislation.
“The series in your paper about drug dealers moving into mortgage fraud is proof positive that is where criminal money is to be made,” Durbin said. “Major financial institutions have to be a little embarrassed by their past. This is their chance.”
Obama’s proposed bill, written in consultation with the Treasury Department, Madigan and Chicago police, would authorize increased federal funding for mortgage counseling. It also would grant funding to the state agencies that license and monitor appraisers and other real estate professionals.
“We view this as a very exciting development,” said Timothy Reiniger of the National Notary Association.
It’s straight from his Senate site, so I claim no objective analysis.
Discuss.
Okay. Not the same subject. Looks like a little dissembling from the O-man.
But. . .
Other aspects of the bill could be opposed by real estate and banking interests, experts said.
One provision of the measure would strengthen the ability of fraud victims to file federal lawsuits. Individuals now must seek redress in state courts, which have more restrictive rules about information gathered during discovery, said Peter J. Henning, a Wayne State University Law School professor.
Mccain was the goto guy for Keating, they weren’t a gse.
If fannie and freddie weren’t subjected to regulators, their enroning the numbers would’ve never been the big scandal. I don’t see how fannie and freddie were getting any benefit, unless it was in maintaining their quasi nature, so they could get lower financing, in order to pass it along. Which btw would be at odds with the non-bank banks interest.
Well, for the me the issue is what happens next. Obama came out on Olbermann and admitted it was a bipartisan failure to act, but blamed Bush for not giving a damn.
I guess it gets back to the specific proposals. Obama’s making sense, and clearly comprehends the ideology that got us into this mess. McCain is mouthing platitutes. If he wants to be taken seriously as a reformer, he needs to quit patronizing the public, and come out with specifics.
#
Phantom
Posted September 16, 2008 at 7:54 pm | Permalink
It all boils down to greedy mortgage brokers, finance co’s writing risky loans. Then passing them off, so they could write some more.
========================================================
Amen. And backed by politicians from both parties going along for the ride.
Let’s get back to where the problems originated.
” Regarding safety and soundness of the banking system, less than half of subprime loans have been originated by federally regulated banking institutions. To date, the deterioration in housing credit has been focused on the relatively narrow market for subprime, adjustable-rate mortgages, which represent fewer than one out of ten outstanding mortgages. Borrower performance deterioration in the subprime market has been concentrated in loans made very recently, especially those originated in late 2005 and 2006, and problems in those loans started to become apparent in the data during the latter half of 2006.
http://www.federalreserve.gov/newsevents/testimony/cole20070322a.htm
Note the time frame given, someone was asleep at the wheel.
Actually, looking over the summary of Obama-Durbin (can tell you I just pasted it over? :) ), it looks to me like it would, in fact, have addressed the meltdown–it just wouldn’t have done enough.
Seems like it was just yesterday Max was raving about the bush “Great Ownership Society”. Don’t hear that much anymore, need keep reminding everyone though.
Note the time frame given, someone was asleep at the wheel.
Gee, who might that be? Maybe the executive branched charged with performing the actual oversight?
So from the article, when these loans were just originating, Mccain was out after Freddie & Fannie, who could not have had anything to do with the current mess.
Mccain was just grandstanding trying to burnish that maverick image after someone got caught playing with the numbers to get bonuses.
Really not even relevant to the current crisis.
Mccain was out after Freddie & Fannie, who could not have had anything to do with the current mess.
Mccain was just grandstanding trying to burnish that maverick image after someone got caught playing with the numbers to get bonuses.
Really not even relevant to the current crisis.
No, not really. I think the Hagel bill, if I’m not mistaken, would have even eliminated HUD. But it didn’t get to the root problem. Creating a new agency is an odd solution when you already have one in place.
Paul whines
“Democrat President Bill Clinton signed the bill.”
He signed a bill the Republicans voted for. Clinton is a conservative Democrat so it’s not surprising that he bought into the Republican kool-aid of deregulation. Does the signing of a bill by Clinton suddenly excuse any activity by the Republicans?
If the Republicans opposed the bill then there would be nothing for Clinton to sign. The fault still lies with the Republican majority however you like to lie your way out of the history.
Obama ought to run a Keating Five ad, and at the end put ‘Reformer’ or needing ‘Reformed’?
The Hagel bill is just something to bluster about mccain being ahead of the curve, when it wasn’t even on the right track.
I would like to see tougher penalties for corp. big wigs that rip off the shareholders and corporations, but I don’t believe that was even part of it.
Speculators played a large role, taking out no-downs, and deferred principal payment schedules, gambling that property prices could only keep appreciating. So, it’s not only the poor slob with bad credit that created this mess.
AIG getting an 85 bil. bridge loan. Also just heard Mccain saying Obama got the most money from fannie and freddie and saying they were the ones causing the problem(Wrong), I see where Paulie gets his talking points. Had me going, I thought maybe it was something he’d uncovered.
Does demonstrate that mccain still doesn’t understand the problem.
The “Keating 5″?
Four of them were DEMOCRATS.
McCain was never even charged with doing anything wrong. The Senate said that McCain used “poor judgement” in his dealings with Keating.
However, the Democrats involved got harsher treatment.
McCain cooperated, completely, with investigators. The Democrats? Not so much.
Nothing in the Keating 5 ordeal even comes close to Obama and Rezco.
Could also show the net gain made by mrs. Mcc###.
Interesting just read that the Glass Stegal repeal vote actually took place 6 mo. before the one being linked to, and was passed almost entirely along party lines.
http://www.dailykos.com/storyonly/2008/9/16/203823/008/1013/601053
And, biden voted against it.
Wooo, and Mccain voted For it!
“Nothing in the Keating 5 ordeal even comes close to Obama and Rezco.”
And why is that true, children?
Because Franklin wants it to be true.
“I do believe in repetetive talking points!”
“I do believe in repetetive talking points!”
And to Hell with reality.
Again, the definition of a bullsh*tter. Someone who says things without regard to whether they are true. Supporting the goal/belief is what is important.
http://www.factcheck.org/just-the-facts/rezko_reed_reality.html
http://www.factcheck.org/elections-2008/corsis_dull_hatchet.html
Rezko, if he’d given Obama the house doesn’t come close to Cindy’s 15 mil. on the deal.