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The Real Culprits In This Meltdown, no McCain aides listed...

 
 
revel
 
  1  
Reply Thu 25 Sep, 2008 12:27 pm
Well, whoever was to blame, it looks like a deal has been reached among democrats and republicans in congress counter proposal and now awaits WH reaction.

http://money.cnn.com/2008/09/25/news/economy/deal_reached/index.htm?postversion=2008092513

Quote:
NEW YORK (CNNMoney.com) -- Lawmakers have reached agreement on a bipartisan counterproposal to the Bush administration's $700 billion financial bailout plan.

Both parties and the House and Senate agreed Thursday to a set of principles on revisions to the rescue plan, which calls for the Treasury Department to buy up bad mortgage securities from banks in an effort to get them to lend again.

The proposal will help homeowners, curb executive pay packages at participating firms and provide oversight of Treasury's actions, said Sen. Christopher Dodd, D-Conn., a key architect of the congressional effort. He did not provide details but said lawmakers will sit down with Treasury officials to discuss it.

"We've reached a fundamental agreement on a set of principles, one, for taxpayers, which is tremendously important," Dodd said. "We're very confident we can act expeditiously."

Administration officials said they were pleased that progress is being made.

"We'll want to hear from Secretary Paulson, and take a look at the details," said Tony Fratto, a White House spokesman. "We look forward to a good discussion at the meeting this afternoon."

The provisions Congress wants to add to the administration's plan should make Americans "legitimately feel better about the overall approach," said Rep. Barney Frank, D-Mass., who heads the House Financial Services Committee.

Taxpayers would be protected under the congressional version of the bailout, said Rep. Spencer Bachus, R-Ala., the top Republican on the House Financial Services Committee. Congress' additions to the proposal call for the Treasury to be "reimbursed for their expenditures," he said.

Lawmakers said they wanted to send a message to the markets to calm down. Wall Street heard the message, sending the Dow Jones Industrial Average up more than 300 points after the agreement was announced. It then settled back to a gain of 250 points.
0 Replies
 
FreeDuck
 
  2  
Reply Thu 25 Sep, 2008 12:37 pm
@McGentrix,
McGentrix wrote:

I had bolded the section where it did not get out of committee due to strict party line vote by the Dems. Bills can not be voted on until the committee process is completed and the bill had no chance of getting through the Democrats on the committee.

That's not what it says, though. The wording is confusing, so it took me a while to reconcile what you bolded with the previous statement in the same article:
Quote:
For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

So, did it get unpassed? How does that work?

McGentrix wrote:
Some Republicans in Congress did oppose it as well. Everyone has to answer to their constituents, right? Had it made it through committee, the Dems had aenough clout to block the bill, thus the Rep's knew it had no chance of success. Even though they had a majority...
It sounds to me more like the Republicans gave up on it. Sure the Dems had enough clout to block it, but that's what compromise is for. They still had to reconcile the bill with the HR version, so this wasn't final at all. How many Dems would they have needed to flip to get it passed? 5? 10? You don't think they could have found that?
spendius
 
  1  
Reply Thu 25 Sep, 2008 01:19 pm
@FreeDuck,
You can't expect them not to put on a show of disharmony when they are joining forces on a serious issue. Who is the "they"? We have token rebellions here by MPs whose constituents are hurt by a bill. As long as it's passed is what matters. Are the "they" those few afforded that privilege.
0 Replies
 
McGentrix
 
  1  
Reply Tue 30 Sep, 2008 09:07 am
Quote:
Video: Democrats insist “nothing wrong” at Fannie Mae, Freddie Mac in 2004

posted at 9:50 am on September 29, 2008 by Ed Morrissey

By 2004, all of the elements of the current financial collapse had been in place for several years. The aggressive approach to enforcing the Community Reinvestment Act (CRA) started under Bill Clinton in 1998, and the seemingly endless appetite for paper by Fannie Mae and Freddie Mac had turned massive amounts of bad loans into mortgage-backed securities to spread their cancer throughout the system. In 2004, a year after the Bush administration tried to tighten regulation and oversight on Fannie and Freddie, Congress was told yet again that disaster loomed. The Democratic response is instructive to seeing who really sat back and allowed this collapse to occur (via Power Line):

(*Video at source, I need to read that bit about linking videos one of these days...)

Highlights of this eight-minute video:
Maxine Waters: Through nearly a dozen hearings, we were frankly trying to fix something that wasn’t broke. Mr. Chairman, we do not have a crisis at Freddie Mac, and particularly at Fannie Mae, under the outstanding leadership of Franklin Raines. [Raines would barely avoid prosecution for fraud.]
Gregory Meeks: … I’m just pissed off at OFHEO [the regulators trying to warn Congress of insolvency at the GSEs], because if it wasn’t for you, I don’t think we’d be here in the first place. … There’s been nothing that indicated that’s wrong with Fannie Mae, Freddie Mac has come up on its own … The question that then comes up is the competence that your agency has with reference to deciding and regulating these GSEs.
Lacy Clay: This hearing is about the political lynching of Franklin Raines.
Barney Frank: I don’t see anything in this report that raises safety and soundness problems.

Take a good look through this video in 2004, and ask yourself who on this panel wanted more regulatory oversight of Fannie Mae and Freddie Mac, and which members spent their time attacking the regulators. When Barack Obama talks at debates about how the past eight years of regulatory laissez-faire created the problem, he may want to review the transcripts of these hearings and note that Democrats repeatedly undermined regulators and called them everything from incompetent to bigoted in their rush to keep the status quo at Fannie and Freddie.

In 2005, Fortune published a lengthy anaylsis of the impending crash of Fannie Mae, and included this altercation between OFHEO and Congress:

Quote:
Two weeks later Falcon and Raines faced off against each other in a hearing before the House subcommittee on capital markets, which was chaired by Baker. Consider the circumstances. Falcon was Fannie’s regulator and had leveled serious charges, amounting to fraud, against Fannie Mae. Most CEOs would have seen the wisdom of humility at this point, but Raines showed little. “These accounting standards are highly complex and require determinations on which experts often disagree,” he said, adding that “there were no facts” that supported OFHEO’s charge that Fannie executives had deferred an expense in 1998 to earn bonuses.

And most of the Democrats present agreed with him. “This hearing is about the political lynching of Franklin Raines,” said Congressman William Lacy Clay of Missouri. Massachusetts Congressman Barney Frank said, “I see nothing in here that suggests that safety and soundness are an issue.” Other Democrats complained that the mere fact of releasing the report could increase the cost of home-ownership.

“Is it possible that by casting all of these aspersions … you potentially are weakening this institution in the market, that you are potentially weakening the housing market in this country?” Congressman Artur Davis of Alabama demanded. When Falcon tried to answer, Davis acted like a prosecutor grilling a hostile witness. He wanted a one-word answer: yes or no. “Is that possible?” he asked again.

“I have never seen anyone treated as disrespectfully as Armando Falcon was by the Democrats and by Franklin Raines,” recalls one congressional aide. Adds Andrew Cuomo: “I credit him for not folding and not caving and not running, because he took a tremendous beating.”


Unfortunately for the Democrats at this hearing, Raines then doubled down and demanded that the SEC give a second opinion on his business practices. After an investigation, the SEC agreed with Falcon and demanded that Fannie Mae restate its earnings all the way back to 2001 " at which point Raines’ fraud got uncovered. OFHEO had been correct, and the Democrats in this committee meeting had done their level best to interfere with the regulator to cover up for Raines’ fraud.

The Democrats attacking the regulator here didn’t do so out of some deep conviction against government regulation. They wanted to keep the gravy train rolling on questionable mortgages in order to endear themselves to the working class, and didn’t mind smearing the OFHEO regulator as a racist in order to succeed. The Republicans who wanted more oversight didn’t demand it as socialists looking for a government takeover of the financial sector, either, but because they saw the impending disaster looming for Fannie Mae.


Again, this points to Fannie Mae and Freddie Mac being the legs on which this whole disaster stood and what the Dems did to avoid dealing with the situation. To watch Barny Franks today try to do anything but hand in his resignation letter should piss off everyone, not just Republicans.
0 Replies
 
FreeDuck
 
  2  
Reply Tue 30 Sep, 2008 10:24 am
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html

Quote:
Community Reinvestment Act had nothing to do with subprime crisis
Posted by: Aaron Pressman on September 29

Fresh off the false and politicized attack on Fannie Mae and Freddie Mac, today we’re hearing the know-nothings blame the subprime crisis on the Community Reinvestment Act " a 30-year-old law that was actually weakened by the Bush administration just as the worst lending wave began. This is even more ridiculous than blaming Freddie and Fannie.

The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly. But it’s even more ridiculous when you consider that most subprime loans were made by firms that aren’t subject to the CRA. University of Michigan law professor Michael Barr testified back in February before the House Committee on Financial Services that 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision and another 30% were made by affiliates of banks or thrifts which are not subject to routine supervision or examinations. As former Fed Governor Ned Gramlich said in an August, 2007, speech shortly before he passed away: “In the subprime market where we badly need supervision, a majority of loans are made with very little supervision. It is like a city with a murder law, but no cops on the beat.”

Not surprisingly given the higher degree of supervision, loans made under the CRA program were made in a more responsible way than other subprime loans. CRA loans carried lower rates than other subprime loans and were less likely to end up securitized into the mortgage-backed securities that have caused so many losses, according to a recent study by the law firm Traiger & Hinckley (PDF file here).

Finally, keep in mind that the Bush administration has been weakening CRA enforcement and the law’s reach since the day it took office. The CRA was at its strongest in the 1990s, under the Clinton administration, a period when subprime loans performed quite well. It was only after the Bush administration cut back on CRA enforcement that problems arose, a timing issue which should stop those blaming the law dead in their tracks. The Federal Reserve, too, did nothing but encourage the wild west of lending in recent years. It wasn’t until the middle of 2007 that the Fed decided it was time to crack down on abusive pratices in the subprime lending market. Oops.

Better targets for blame in government circles might be the 2000 law which ensured that credit default swaps would remain unregulated, the SEC’s puzzling 2004 decision to allow the largest brokerage firms to borrow upwards of 30 times their capital and that same agency’s failure to oversee those brokerage firms in subsequent years as many gorged on subprime debt. (Barry Ritholtz had an excellent and more comprehensive survey of how Washington contributed to the crisis in this week’s Barron’s.)

There’s plenty more good reading on the CRA and the subprime crisis out in the blogosphere. Ellen Seidman, who headed the Office of Thrift Supervision in the late 90s, has written several fact-filled posts about the CRA controversey, including one just last week. University of Oregon professor and economist Mark Thoma has also defended the CRA on his blog. I also learned something from a post back in April by Robert Gordon, a senior fellow at the Center for American Progress, which ends with this ditty:


It’s telling that, amid all the recent recriminations, even lenders have not fingered CRA. That’s because CRA didn’t bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA " or any federal regulator. Law didn’t make them lend. The profit motive did. And that is not political correctness. It is correctness.
FreeDuck
 
  2  
Reply Tue 30 Sep, 2008 10:30 am
@FreeDuck,
If you go to the actual article there are lots of good links off of it. Very enlightening.
cicerone imposter
 
  2  
Reply Tue 30 Sep, 2008 10:33 am
@FreeDuck,
FreeDuck, Thanks for finding that gem. However, most of us already know that the conservatives will keep identifying the democrats as the cause of the current crisis. They have never learned to take responsibility for "anything," but continue to take credit for the good stuff - that they think is "good."

Bush; "....more Americans now own their own homes....blah, blah, blah..." "...the surge is a success and working...blah, blah, blah..."
FreeDuck
 
  2  
Reply Tue 30 Sep, 2008 10:40 am
@cicerone imposter,
It is worse than blaming the Democrats... they are in effect saying that this is the fault of poor and minority people who wanted to buy homes. That just is not the case.
sozobe
 
  2  
Reply Tue 30 Sep, 2008 10:44 am
@FreeDuck,
I've been reading a ton of bailout stuff today and I'm beginning to feel like Sarah Palin after a marathon cram session. Shocked I'm just not synthesizing well, I'm being swung from one opinion to another based on what I read. And my eyes started to glaze over when I attempted yours.

I'm saying this on the way to saying that yours looks like one of the better ones out there and I want to come back to it when I'm feeling a bit more lucid.
cicerone imposter
 
  1  
Reply Tue 30 Sep, 2008 10:47 am
@FreeDuck,
That's only one issue of many the conservatives are blaming. However, what makes middle America more angry is that they have lived responsibly by taking on mortgages they could afford, worked, and paid their mortgages and other living expenses responsibly. Now, the government is talking about assisting the poor keep their homes by adjusting their mortgage payments. That is not fair to those who lived responsibly; our government will bail them out and the banks who are the cause of this debacle. That "is" irresponsible."

I lost money on the stock market in the past; why must the current holders of stock be "saved" by this bailout? I lived "responsibly" but will not benefit in any way from this bailout - directly. Those banks and finance companies went sour because of their greed; why must they be rewarded with a bailout by taxpayer money?
0 Replies
 
FreeDuck
 
  1  
Reply Tue 30 Sep, 2008 10:50 am
@sozobe,
sozobe wrote:

I've been reading a ton of bailout stuff today and I'm beginning to feel like Sarah Palin after a marathon cram session. Shocked I'm just not synthesizing well, I'm being swung from one opinion to another based on what I read. And my eyes started to glaze over when I attempted yours.

I'm saying this on the way to saying that yours looks like one of the better ones out there and I want to come back to it when I'm feeling a bit more lucid.


I am having the same problem. I dont completely understand it and trying to weed through the pieces that are supporting one agenda or another is tiring. That piece has a lot of links off of it but I couldnt read through them all. I bookmarked it for later, though.
revel
 
  1  
Reply Thu 2 Oct, 2008 07:17 am
@FreeDuck,
Quote:
I've been reading a ton of bailout stuff today and I'm beginning to feel like Sarah Palin after a marathon cram session. Shocked I'm just not synthesizing well, I'm being swung from one opinion to another based on what I read. And my eyes started to glaze over when I attempted yours.


Smile I know what you mean.
cicerone imposter
 
  1  
Reply Thu 2 Oct, 2008 12:29 pm
@revel,
Except Palin knows how to construct her words in such a way that doesn't answer the question, but it's good enough for voters. As somebody already noted, "Palin doesn't understand the question."
spendius
 
  1  
Reply Thu 2 Oct, 2008 01:33 pm
@cicerone imposter,
Nobody understands the questions. They are absurd oversimplifications.
cicerone imposter
 
  1  
Reply Thu 2 Oct, 2008 01:36 pm
@spendius,
spendi, We understand your "complexity" too! LOL
0 Replies
 
revel
 
  1  
Reply Tue 7 Oct, 2008 06:34 am
I am still amazed at the title of this thread. Another McCain listed.

Quote:
Mark Buse, a longtime McCain adviser who had been staff director of the Senate commerce committee, signed on as a Freddie Mac lobbyist, and his firm, ML Strategies, earned $460,000 in lobbying fees in late 2003 and 2004, according to lobbying disclosures. Buse is now chief of staff at McCain's Senate office.

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/02/AR2008100203812_pf.html
blueflame1
 
  1  
Reply Wed 8 Oct, 2008 09:23 am
Is the Federal Reserve Engaged in Acts of Economic Warfare Against America? http://www.naturalnews.com/024427.html "If the actions pursued by the Federal Reserve were being masterminded by Al-Qaeda, they would be denounced as acts of war. In World War II, such actions were deliberate acts of war. Targeting the economy for destruction by flooding the money supply with counterfeit currency is, by any measure, a threat to any nation."
spendius
 
  1  
Reply Wed 8 Oct, 2008 06:10 pm
@blueflame1,
I say old girl! Take it easy. Do you mean our elected leaders are targeting us for destruction?

It doesn't surprise me mind you. But I wouldn't tell anybody myself.
0 Replies
 
cicerone imposter
 
  1  
Reply Wed 8 Oct, 2008 06:15 pm
@revel,
Those are minor facts when we see how McCain is running his campaign against Obama's connection to Mae and Mac.
0 Replies
 
spendius
 
  1  
Reply Thu 9 Oct, 2008 12:37 pm
This is Brutus in Julius Ceasar-

Quote:
For I can raise no money by vile means:
By heaven, I had rather coin my heart,
And drop my blood for drachmas, than to wring
From the hard hands of peasants their vile trash
By any indirection...

When Marcus Brutus grows so covetous,
To lock such rascal counters from his friends,
Be ready, gods, with all your thunderbolts,
Dash him to pieces.


No gods- no thunderbolts- no sweat.

 

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