No....... On Feb 22, 6:01 pm, rigsy03 <[email protected]> wrote: > Take the issue of banks and their possible nationalization. Do you > believe any sane American or any investor would continue to want to > invest in American companies when stockholders (the real owners) are > the ones being punished and left with nothing? The whole system of > capitalism and trust is being torn apart and being redistributed. > > On Feb 22, 2:50 pm, Keith In Tampa <[email protected]> wrote: > > > > > Doc, > > > I actually agree with you.....I think.....Sort of...... > > > On Feb 22, 3:40 pm, Doc Holliday <[email protected]> wrote: > > > > Like these economic strategists / czars (who now play the dumb blonds) > > > didn't know what the hell was inevitable. What a damned crock of shit! > > > The "dumb blond" joke is on us! BTW we don't send ignorance to jail or > > > call them traitors; do we? The SOB's are damned well playing dumb I > > > know because I saw this whole escapade was economically unsustainable > > > and I hardly know shit about economics. > > > >http://www.scratchinpost.net/barefootbob//banking-fed-quotes.html > > > > This contrived "emergency" by the money vultures and the political > > > manipulations of FDR, et. al. since then has created innumerous > > > abuses, usurpations, and abridgments of Constitutionally delegated > > > Powers and Authority as clearly stated in Senate Report 93-549 (1973): > > > > "A majority of the people of the United States have lived all of > > > their lives under emergency rule. For 40 years, [-1824 years now in > > > 109] freedoms and governmental procedures guaranteed by the > > > Constitution have in varying degrees been abridged by laws brought > > > into force by statutes of national emergency." > > > > Peace, > > > Doc > > > > On Feb 22, 2:08 pm, Keith In Tampa <[email protected]> wrote: > > > > > I thought this article was interesting, especially considering former > > > > Senator Gramm's involvement in the "Gramm-Leach-Bliley" Act, which > > > > President > > > > Clinton signed into law. In essence, President Clinton repealed the > > > > "Glass-Steagall" Act, the theory being at the time that America's > > > > financial > > > > competitiveness was being hampered in comparison to Europe's and the > > > > emerging economies of Russia and China. That we needed the > > > > "Gramm-Leach-Bliley" Act, in order to make America's lending > > > > institutions > > > > viable and competitive. > > > > > By the mid 1990s, the Clinton Administration had in fact adopted a > > > > "quota > > > > system" , and unabashedly favored expansion of, and the empowered use of > > > > the "Community Reinvestment Act", believing that a governmental > > > > response to > > > > economic problems in inner cities is more effective than a free market > > > > solution.....The rest of course, is history, (*See* Chris Dodd, Barney > > > > Frank, Chuck Schumer, Franklin Raines, Jim Johnson, and a multitude of > > > > other > > > > bandits from the Democrat Party: > > > > > ==================== > > > > Deregulation and the Financial Panic Loose money and politicized > > > > mortgages > > > > are the real villains. By PHIL GRAMM > > > > February 20, > > > > 2009http://online.wsj.com/article/SB123509667125829243.html?mod=djemEdito... > > > > The > > > > debate about the cause of the current crisis in our financial markets is > > > > important because the reforms implemented by Congress will be profoundly > > > > affected by what people believe caused the crisis. > > > > > If the cause was an unsustainable boom in house prices and irresponsible > > > > mortgage lending that corrupted the balance sheets of the world's > > > > financial > > > > institutions, reforming the housing credit system and correcting > > > > attendant > > > > problems in the financial system are called for. But if the fundamental > > > > structure of the financial system is flawed, a more profound > > > > restructuring > > > > is required. > > > > > I believe that a strong case can be made that the financial crisis > > > > stemmed > > > > from a confluence of two factors. The first was the unintended > > > > consequences > > > > of a monetary policy, developed to combat inventory cycle recessions in > > > > the > > > > last half of the 20th century, that was not well suited to the > > > > speculative > > > > bubble recession of 2001. The second was the politicization of mortgage > > > > lending. > > > > > The 2001 recession was brought on when a speculative bubble in the > > > > equity > > > > market burst, causing investment to collapse. But unlike previous > > > > postwar > > > > recessions, consumption and the housing industry remained strong at the > > > > trough of the recession. Critics of Federal Reserve Chairman Alan > > > > Greenspan > > > > say he held interest rates too low for too long, and in the process > > > > overstimulated the economy. That criticism does not capture what went > > > > wrong, > > > > however. The consequences of the Fed's monetary policy lay elsewhere. > > > > > In the inventory-cycle recessions experienced in the last half of the > > > > 20th > > > > century, involuntary build up of inventories produced retrenchment in > > > > the > > > > production chain. Workers were laid off and investment and consumption, > > > > including the housing sector, slumped. > > > > In the 2001 recession, however, consumption and home building remained > > > > strong as investment collapsed. The Fed's sharp, prolonged reduction in > > > > interest rates stimulated a housing market that was already booming -- > > > > triggering six years of double-digit increases in housing prices during > > > > a > > > > period when the general inflation rate was low. > > > > > Buyers bought houses they couldn't afford, believing they could > > > > refinance in > > > > the future and benefit from the ongoing appreciation. Lenders assumed > > > > that > > > > even if everything else went wrong, properties could still be sold for > > > > more > > > > than they cost and the loan could be repaid. This mentality permeated > > > > the > > > > market from the originator to the holder of securitized mortgages, from > > > > the > > > > rating agency to the financial regulator. > > > > > Meanwhile, mortgage lending was becoming increasingly politicized. > > > > Community > > > > Reinvestment Act (CRA) requirements led regulators to foster looser > > > > underwriting and encouraged the making of more and more marginal loans. > > > > Looser underwriting standards spread beyond subprime to the whole > > > > housing > > > > market. > > > > > As Mr. Greenspan testified last October at a hearing of the House > > > > Committee > > > > on Oversight and Government Reform, "It's instructive to go back to the > > > > early stages of the subprime market, which has essentially emerged out > > > > of > > > > CRA." It was not just that CRA and federal housing policy pressured > > > > lenders > > > > to make risky loans -- but that they gave lenders the excuse and the > > > > regulatory cover. > > > > > Countrywide Financial Corp. cloaked itself in righteousness and > > > > silenced any > > > > troubled regulator by being the first mortgage lender to sign a HUD > > > > "Declaration of Fair Lending Principles and Practices." Given privileged > > > > status by Fannie Mae as a reward for "the most flexible underwriting > > > > criteria," it became the world's largest mortgage lender -- until it > > > > became > > > > the first major casualty of the financial crisis. > > > > > The 1992 Housing Bill set quotas or "targets" that Fannie and Freddie > > > > were > > > > to achieve in meeting the housing needs of low- and moderate-income > > > > Americans. In 1995 HUD raised the primary quota for low- and > > > > moderate-income > > > > housing loans from the 30% set by Congress in 1992 to 40% in 1996 and > > > > to 42% > > > > in 1997. > > > > > By the time the housing market collapsed, Fannie and Freddie faced three > > > > quotas. The first was for mortgages to individuals with below-average > > > > income, set at 56% of their overall mortgage holdings. The second > > > > targeted > > > > families with incomes at or below 60% of area median income, set at 27% > > > > of > > > > their holdings. The third targeted geographic areas deemed to be > > > > underserved, set at 35%. > > > > > The results? In 1994, 4.5% of the mortgage market was subprime and 31% > > > > of > > > > those subprime loans were securitized. By 2006, 20.1% of the entire > > > > mortgage > > > > market was subprime and 81% of those loans were securitized. The > > > > Congressional Budget Office now estimates that GSE losses will cost $240 > > > > billion in fiscal year 2009. If this crisis proves nothing else, it > > > > proves > > > > you cannot help people by lending them more money than they can pay > > > > back. > > > > > Blinded by the experience of the postwar period, where aggregate housing > > > > prices had never declined on an annual basis, and using the last 20 > > > > years as > > > > a measure of the norm, rating agencies and regulators viewed securitized > > > > mortgages, even subprime and undocumented Alt-A mortgages, as embodying > > > > little risk. It was not that regulators were not empowered; it was that > > > > they > > > > were not alarmed. > > > > > With near universal approval of regulators world-wide, these securities > > > > were > > > > injected into the arteries of the world's financial system. When the > > > > bubble > > > > burst, the financial system lost the indispensable ingredients of > > > > confidence > > > > and trust. We all know the rest of the story. > > > > > The principal alternative to the politicization of mortgage lending and > > > > bad > > > > monetary policy as causes of the financial crisis is deregulation. How > > > > deregulation caused the crisis has never been specifically explained. > > > > Nevertheless, two laws are most often blamed: the Gramm-Leach-Bliley > > > > (GLB) > > > > Act of 1999 and the Commodity Futures Modernization Act of 2000. > > > > > GLB repealed part of the Great Depression era Glass-Steagall Act, and > > > > allowed banks, securities companies and insurance companies to affiliate > > > > under a Financial Services Holding Company. It seems clear that if GLB > > > > was > > > > the problem, the crisis would have been expected to have originated in > > > > Europe where they never had Glass-Steagall requirements to begin with. > > > > Also, > > > > the financial firms > > ... > > read more »- Hide quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum
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