HI PETE – Go back about 5 years, or even just 3, and look at the Wall Street Journal, Newsweek, and Time was writting about the Bush plans to save the banks, and reform Wall Street – now that is some fun reading.
GWB and the GOP have been warning about and wanted to rein in the two ‘under the carpet’ institutions - at the root of the financial debacle, for years.
But the very people that are now touting this 2K+ monstrosity as a financial panacea have blocked the GOP efforts, proclaiming their health …
“GWB and the GOP have been warning about and wanted to rein in the two ‘under the carpet’ institutions - at the root of the financial debacle, for years.”
Quite true - mind you, by and large it was the years when they were in opposition. While in power… not so much (the below is from http://tinyurl.com/39gzzhr ).
“In 2000, as HUD revisited its affordable-housing goals, the housing market had shifted. With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low “teaser” interest rates and ignoring borrowers’ qualifications.
HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower’s ability to repay. Freddie and Fannie adopted policies not to buy some high-cost loans.
That year, Freddie bought $18.6 billion in subprime loans; Fannie did not disclose its number.
In 2001, HUD researchers warned of high foreclosure rates among subprime loans.
“Given the very high concentration of these loans in low-income and African American neighborhoods, the growth in subprime lending and resulting very high levels of foreclosure is a real cause for concern,” an agency report said.
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But by 2004, when HUD next revised the goals, Freddie and Fannie’s purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.
That year, President Bush’s HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and “must do more.” ”
So in 2008, Bush calls for reform of Fannie & Freddie when a) the mortgage market is in shambles and b) nothing depends on him anyway. Yet in 2004-5 Bush saw no problem with it (although some people, including advisors of his, saw the market might be dangerous) and called for F&F to be more active in helping the people who have the biggest problem paying back. Who set that policy - the department of housing and urban development. You know, those guys - http://portal.hud.gov/portal/page/portal/HUD . Gee whiz, no way the GOP or Bush Jr. could have any influence on it during the 2001-2009 period, right?
Well, apparently not, since the HUD right around… oh, 2004 - was all for Fannie not being such a prude and having her go all out, like all the other private girl companies… Yeah, we saw how that one ended up, didn’ t we?
0bama, the competent, has, after 71 days decided to allow 12 foreign entities to help with the Gulf cleanup, while they are reviewing offers from others … .
Well, it is still a lot less time than he took to decide on the First Pooch … .
Congressional lawmakers were up until 2 a.m. this morning (ending a 20-hour session) working to change the way Wall Street does business. So what’s the result after months of the general media applauding the “Volcker Rule” to ban proprietary trading at banks and other hard-hitting financial reforms? A 2,000-page loophole-filled bill dubbed the “Dodd-Frank Bill”… And what does Senator Chris Dodd have to say about the “sweeping reforms” that bear his name? “No one will know until this is actually in place how it works.”
Banks were most worried about the Volcker Rule and Senator Blanche Lincoln’s proposal to force banks to spin off their high-powered derivatives operations. But it looks like Wall Street’s influence won out as the two measures were watered down.
According to Reuters:
Lawmakers built exceptions into the Lincoln proposal that allowed banks to continue to engage in foreign-exchange and interest-rate swaps dealing, which account for the bulk of the $615 trillion industry. Banks would also be allowed to continue to participate in gold and silver swaps and derivatives designed to hedge their own risk.
They would need to spin off dealing operations that handle agricultural, equity, energy, metal and uncleared credit default swaps.
The final Volcker rule was also diluted with a key exception that allowed banks to invest up to 3 percent of their Tier 1 capital in hedge and private equity funds.
The government also included measures to protect consumers from abusive credit card and mortgage lending. Another proposal would hold the credit-rating agencies (Moody’s, Standard & Poor’s, and Fitch) more accountable for their ratings. The bill also would establish a new Financial Stability Oversight Council to regulate Wall Street’s largest institutions. The FSOC also would have the power over any hedge fund or private equity fund with more than $150 million in assets.
Bloomberg has the best summary of the bill. But really all you have to know about this bill is … Wall Street’s earnings will take a small hit, and there will be more watchdogs and regulation (this is a government bill after all)… But the Wall Street business model of privatizing profits and socializing losses remains largely intact. And the banks will find a way around any part of the bill they don’t like.
Congress expects to present this bill to Obama on July 4. And you can be sure he’ll fire up the teleprompter to tell America how he “changed Wall Street forever” and “empowered Main Street.” In reality, nothing will change.
petergrt almost 14 years ago
Ramirez is the best!
There is nothing to improve on the toon, and the graphics are great as well.
Dtroutma almost 14 years ago
Chase, B of A, and Citicorp are under the “other side” of the carpet?
petergrt almost 14 years ago
Can the Democrats ever come up with anything other than 2K-page legal monstrosities?
kennethcwarren64 almost 14 years ago
HI PETE – Go back about 5 years, or even just 3, and look at the Wall Street Journal, Newsweek, and Time was writting about the Bush plans to save the banks, and reform Wall Street – now that is some fun reading.
petergrt almost 14 years ago
What’s your point?
GWB and the GOP have been warning about and wanted to rein in the two ‘under the carpet’ institutions - at the root of the financial debacle, for years.
But the very people that are now touting this 2K+ monstrosity as a financial panacea have blocked the GOP efforts, proclaiming their health …
dwnoname almost 14 years ago
the gop had all three, house senate and oval office, for six years. and dodd stopped them from acting? not
4uk4ata almost 14 years ago
“GWB and the GOP have been warning about and wanted to rein in the two ‘under the carpet’ institutions - at the root of the financial debacle, for years.”
Quite true - mind you, by and large it was the years when they were in opposition. While in power… not so much (the below is from http://tinyurl.com/39gzzhr ).
“In 2000, as HUD revisited its affordable-housing goals, the housing market had shifted. With escalating home prices, subprime loans were more popular. Consumer advocates warned that lenders were trapping borrowers with low “teaser” interest rates and ignoring borrowers’ qualifications.
HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower’s ability to repay. Freddie and Fannie adopted policies not to buy some high-cost loans.
That year, Freddie bought $18.6 billion in subprime loans; Fannie did not disclose its number.
In 2001, HUD researchers warned of high foreclosure rates among subprime loans.
“Given the very high concentration of these loans in low-income and African American neighborhoods, the growth in subprime lending and resulting very high levels of foreclosure is a real cause for concern,” an agency report said. ad_icon
But by 2004, when HUD next revised the goals, Freddie and Fannie’s purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.
That year, President Bush’s HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and “must do more.” ”
So in 2008, Bush calls for reform of Fannie & Freddie when a) the mortgage market is in shambles and b) nothing depends on him anyway. Yet in 2004-5 Bush saw no problem with it (although some people, including advisors of his, saw the market might be dangerous) and called for F&F to be more active in helping the people who have the biggest problem paying back. Who set that policy - the department of housing and urban development. You know, those guys - http://portal.hud.gov/portal/page/portal/HUD . Gee whiz, no way the GOP or Bush Jr. could have any influence on it during the 2001-2009 period, right?
Well, apparently not, since the HUD right around… oh, 2004 - was all for Fannie not being such a prude and having her go all out, like all the other private girl companies… Yeah, we saw how that one ended up, didn’ t we?
petergrt almost 14 years ago
Virtually all problem mortgages were originated from 2006 on … .Which is when a number of Republicans attempted a re-regulation …
petergrt almost 14 years ago
0bama, the competent, has, after 71 days decided to allow 12 foreign entities to help with the Gulf cleanup, while they are reviewing offers from others … .
Well, it is still a lot less time than he took to decide on the First Pooch … .
cfimeiatpap almost 14 years ago
Congressional lawmakers were up until 2 a.m. this morning (ending a 20-hour session) working to change the way Wall Street does business. So what’s the result after months of the general media applauding the “Volcker Rule” to ban proprietary trading at banks and other hard-hitting financial reforms? A 2,000-page loophole-filled bill dubbed the “Dodd-Frank Bill”… And what does Senator Chris Dodd have to say about the “sweeping reforms” that bear his name? “No one will know until this is actually in place how it works.”
Banks were most worried about the Volcker Rule and Senator Blanche Lincoln’s proposal to force banks to spin off their high-powered derivatives operations. But it looks like Wall Street’s influence won out as the two measures were watered down.
According to Reuters: Lawmakers built exceptions into the Lincoln proposal that allowed banks to continue to engage in foreign-exchange and interest-rate swaps dealing, which account for the bulk of the $615 trillion industry. Banks would also be allowed to continue to participate in gold and silver swaps and derivatives designed to hedge their own risk.
They would need to spin off dealing operations that handle agricultural, equity, energy, metal and uncleared credit default swaps.
The final Volcker rule was also diluted with a key exception that allowed banks to invest up to 3 percent of their Tier 1 capital in hedge and private equity funds.
The government also included measures to protect consumers from abusive credit card and mortgage lending. Another proposal would hold the credit-rating agencies (Moody’s, Standard & Poor’s, and Fitch) more accountable for their ratings. The bill also would establish a new Financial Stability Oversight Council to regulate Wall Street’s largest institutions. The FSOC also would have the power over any hedge fund or private equity fund with more than $150 million in assets.
Bloomberg has the best summary of the bill. But really all you have to know about this bill is … Wall Street’s earnings will take a small hit, and there will be more watchdogs and regulation (this is a government bill after all)… But the Wall Street business model of privatizing profits and socializing losses remains largely intact. And the banks will find a way around any part of the bill they don’t like.
Congress expects to present this bill to Obama on July 4. And you can be sure he’ll fire up the teleprompter to tell America how he “changed Wall Street forever” and “empowered Main Street.” In reality, nothing will change.
oneoldhat almost 14 years ago
dodd blocked mccain reform of freddie and fannie 3 times – clinton got rid of glass -seagall
4uk4ata almost 14 years ago
“clinton got rid of glass -seagall ”
Completely by himself, I suppose. Hey, remind us all why blaming Bush was so bad if we can all drag Clinton into this mess ;) .