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Thread: FCIC Report Due Out Soon

  1. #1
    Banned Eric Stoner's Avatar
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    Default FCIC Report Due Out Soon

    The Financial Crisis Inquiry Commission is about to release its almost 600 page report. The 6 Dem appointees claim that the finacial crisis was "an avoidable disaster." They blame it on failure by the government to regulate, corporate mismanagement ( Lehman , AIG , Citigroup etc. ) and heedless risk taking by Wall Street. 3 of the 4 Republican appointees are issuing a dissent blaming it on a narrower set of causes and 1 Republican is blaming it all on housing policy and excessive borrowing by homeowners.

    All of the members of this Commission should be ashamed of themselves. They spent over a year, listened to about 700 witnesses , spent who knows how much money and produced a document that doesn't tell us a thing we didn't already know.

    Greenspan is blamed for negligence and for cheerleading excessive deregulation.
    Who didn't know that ?
    The SEC is blamed for total failure of oversight.
    Who needs to be told that ?
    The Clinton Administration ( including Geithner, Summers and Rubin ) is blamed for shielding derivatives from proper regulation.
    Who thinks THAT is a news flash ?

    The really fun parts are who doesn't get blamed: Fannie, Freddie, low interest rates and HOMEOWNERS ! While it is outrageous for a solo Republican appointee to primarily blame borrowers in his dissent , it is equally outrageous to let them off the hook entirely as the majority does. How about a national debt to GDP ratio that went from 20% in 2002 to 30% in 2007 ? How about the corruption of lending standards pioneered by Frank Raines at Fannie cheered on by Maxine Waters and Barney Fwank ? What about the role of the rating agencies ? While Bush and Clinton come in for their share of blame ( which is fine afaic ) what about the dummies and ninnies in Congress ? Not a word about the "Friends of Angelo" ???

    The answer as to what happened is so pathetically obvious. It's like : "who committed the Murder On The Orient Express ? THEY ALL DID ! "
    Clearly, this piece of partisan junk is nothing more than an apologia for Dodd -Frank. Which is fine up to a point. As I, Melonie and one or two others have previously pointed out, the regulations therein do not do enough to prevent a repeat.

    All in all , a pathetic, piss poor effort that should be publicly burned. Again, the poor trees that have to be sacrificed just to print this garbage ! Oh the Arbority !
    Last edited by Eric Stoner; 01-28-2011 at 08:53 AM.

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    Banned Melonie's Avatar
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    Default Re: FCIC Report Due Out Soon

    ^^^ again not wanting to stray from primarily economic content, but ...

    At some point the average American needs to realize that the relationship between Washington democrats, gov't financial institutions fannie / freddie / sallie et al, the FED, and the FED 'primary dealer' Wall St. banks has been and remains highly 'incestuous'. The same group of elites drifts between appointed gov't positions, to appointed positions at fannie / freddie / sallie, to the FED branches, to the board rooms of JP Morgan, Citi, BofA etc. As such, non of them is likely to back any financial policy that is 'good' for average Americans while also being 'bad' for any member of the 'incestuous' group.

    Lobbying groups funded by the 'primary dealer' Wall St. banks as well as funded by Fannie / Freddie assure that political contributions wind up in enough of the right Washington legislator campaign funds to make sure that such is the case !

    As to 'preventing a repeat', as with all gov't agencies from the TSA to the DOD, those agencies are always 'fighting the last war' ! Thus the global financial paradigm has already changed to avoid FinReg restrictions and evolve new ( and as yet unregulated ) 'angles' to allow the very rich to become richer ( and/or avoid paying anywhere near the officially published tax rates).

    And in regard to actually identifying causes of the 'Financial Crisis', the 'gold foil hat' crowd would quote Jack Nicholson ...
    "You can't handle the truth !

  3. #3
    Banned Eric Stoner's Avatar
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    Default Re: FCIC Report Due Out Soon

    Here we go again : The more things change the more they stay the same. Dodd-Fwank was supposed to require that banks wanting to securitize mortgages retain at least 5% of the risk. That of every mortgage they wanted to sell to investors, they must retain some "skin in the game".

    At the behest of the banks, Dodd- Fwank did have a loophole for "Qualified Residential Mortgages" that could be sold to investors WITHOUT the lending bank retaining any risk for itself. Among other things it required the borrower to put up a 20% down payment, at least half of which had to come directly from the borrower. Qualified borrowers could not use a gift or anything else for more than half the 20%.

    Regulations under Dodd- Fwank also require banks who want to sell MBS's to have 5% minimum stake in every tranch, at EVERY level of the security, from the top rated risks all the way down to the riskier borrowers. Regulators also want to limit securitization to mostly fixed rate loans and make most adjustable rates including ALL loans with balloon payments ineligible for QRM status.

    In today's N.Y. Times is a front page Business Section story about how the cat herders at the SEC and other regulators are smacking the banks noses with rolled up newspapers. The banks are trying to weasel out of the very regs that were passed to rein in their worst practices that directly led to the Financial crisis. Of course, the banks are saying that this will limit lending only to "good risks". Duh ! What is wrong with that ? Are they serious ? Where were they in 2007 and 2008 ?

    You want to know what's really behind this ? The banks seriously expect to be able to go back to their old way of doing things and when , not if, WHEN another house of cards collapses, they will AGAIN be bailed out by the taxpayers. Their buddy Obama, and his former Goldman Sachs appointees, will see to it that they are bailed out again.

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