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Posted by: hyperbola 1 year, 1 month ago

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hyperbola1 year, 1 month ago

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Well Wolfie, your comment starts out with a lie. The total of the bad debt in the mortgage business is $300 billion at present (it averages about $150 billion in recent years), which is less than half of the cost of the bailout already passed by congress. Amongst that mortgage debt, CRA mortgages have a better record of non-faulting and paying-off than the unregulated mortgages written by unregulated financial institutions.

The real problem, that is hundreds of times bigger, are the "derivatives" gambling by unregulated "investment" banks, insurance companies and hedge funds.

Your CRA diatribes are distractions designed to keep the ignorant marching in goosestep.

Why Are We Surprised? From Enron to the Current Meltdown

Given the myriad warnings that came via Enron – and the years-long neglect of any meaningful efforts to have serious policing of Wall Street – why are we surprised to find out that the financial engineers have robbed us blind? The warnings from the Enron meltdown could scarcely have been more clear. Indeed, two key lessons were obvious: financial regulators needed lots more funding, personnel and support; and derivatives markets that operate without proper regulatory oversight and reporting pave the way for financial engineers to privatize profits and socialize costs.

Over the past few weeks, it’s become obvious that the SEC was largely co-opted by the companies it was supposed to be regulating. On September 25, the agency’s Inspector General, David Kotz, issued a report which that it is “undisputable” that the SEC “failed to carry out its mission in its oversight of Bear Stearns” – the investment bank the collapsed earlier this year and was taken over by JP Morgan. The report said that the agency missed “numerous potential red flags” prior to the company’s collapse and failed to require the investment bank to rein in its risk taking. (The full text of the report is available at: http://www.sec.gov/about/oig/audit/2008/446-a.pdf.... ...

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    pc251 year ago
    
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    constant smear attempts for what they really are: extremist, anti-american, anti-democracy rants by goons.
    
    you just described you hero
    
    The Messiah
    
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      hyperbola1 year ago
      
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      Well PC, I don't much care for Obama, but seems awfully preferable to the mega-crook, imperialists around McCain. Phil Gramm for example. Here is the rest of the article I linked above.
      
      Why Are We Surprised? From Enron to the Current Meltdown (cont'd)
      
      .......The most toxic element of the current market meltdown are credit derivatives, a financial instrument that was almost non-existent prior to 2000. And the growth of the credit derivatives business is due largely to one of John McCain’s pals, former Texas senator, Phil Gramm.... Gramm hailed the measure, saying it “protects financial institutions from over-regulation.” He went on, saying it also “guarantees that the United States will maintain its global dominance of financial markets.”
      
      Global dominance may be a worthy goal, but Gramm’s bill also contained a provision which Congressional aides referred to as the "Enron exemption.” This bit of legislative legerdemain made into law a regulatory exemption on derivatives contracts that was first rushed into place by the Commodity Futures Trading Commission in 1993 when that agency was chaired by Gramm’s wife, Wendy Gramm. ...
      
      ... More than any other piece of legislation, the Commodity Futures Modernization Act paved the way for the financial engineers on Wall Street to buy and sell the infamous derivatives known as “credit default swaps” with virtually no oversight. According to one Washington, D.C.-based expert on derivatives who asked that his name and affiliation not be used, the bill that Gramm sponsored “led directly to the current meltdown. In 2000, the total value of the credit derivatives business was less than $1 trillion. By this year, the credit derivatives business was worth more than $60 trillion.” ...
      
      ... Enron gave Congress and the Bush administration all of the rationales that were needed to justify proper regulation of the financial markets. Enron clearly showed the need for more cops – well paid cops who have the backing of their bosses – to patrol the corporate boardrooms and study corporate accounting practices. Enron’s bankruptcy also demonstrated the dangers of uncontrolled derivatives businesses. But those lessons were merrily ignored by Gramm, Greenspan and their cronies on Wall Street.
      
      So I have to ask again: why are we surprised?
      
      http://www.propeller.com/story/2008/10/09/why-are-...
      
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