Is it time to repeal the Gramm-Leach-Bliley Act of 1999

[WethePeopleUS]

Perhaps it is time to repeal the Gramm-Leach-Bliley Act of 1999. Was the passage of this law what led to the financial crisis the United States felt in 2008-2009?
After the stock market crash of 1929, the United States had seen the worst depression and economic disaster of its history. Unemployment and inflation had soared to unprecedented numbers, Wall Street fell, and the banks were doomed. To prevent this catastrophe from ever happening again, the United States Congress enacted the law known as Glass-Steagall in 1933. What this law sought to do was, erect a firewall between the investment bankers and the commercial bankers. The reason for this was to allow Wall Street to crumble to the ground, and not have it affect the commercial banks, where the public’s money was kept. Under this legislation, the United States saw enormous economic growth, as well as having the security of not putting your money at risk by keeping it in a commercial bank. However, in 1999 Congress repealed this legislation and enacted the Gramm-Leach-Bliley Act (GLBA). This eroded the wall that was kept between commercial bankers and investment bankers. Now commercial bankers can offer investment and insurance services, buy and sell stocks and bonds, and engage in mergers and acquisitions. This led to the creation of giant corporations such as Bank of America, JPMorgan Chase, and Citigroup to be created.
After these giant conglomerates were able to gamble with the people’s money, they maliciously made bad investments, and ultimately led us into one of the worst recessions our country has seen since the Great Depression. So is it time to repeal the GLBA? Are we going to allow the banking industry to have investment banking and commercial banking tied together? Or shall we resurrect the firewall between the two and allow for business to fail when they make bad investments? Should we tell Congress to hinder the banks’ ability to invest our money without our consent?

 

[Skull Pilot]

The Dimwitcraps won't do it because that would mean their hero Blow Job Billy would have some blame for the economy.

 

[Sallow]

ABSOLUTELY!!!!!!!

 

[eagle1462010]

It should have been repealed long ago. It allowed Shadow trading outside of SEC control which allowed Derrivatives to EXPLODE. It also allowed vital commodities to be traded outside of SEC control such as Oil, corn, and etc. This is directly related to the SPECULATORS WHO STILL CONTINUE TO DRIVE UP GAS PRICES.

Before this act, this Trading was REGULATED, and the SEC limited the amount of Trading.

Just a side note.......... Look up the Derrivatives totals for yourselves from 2000 until now. They went from about 70 Trillion to OVER A 1,000 TRILLION in 8 years. Note: There are 2 types of Derrivatives.

 

[itfitzme]

Seems right to me.

 

[Dugdale_Jukes]

Repeal of GLB is a part of the road back. Repeal of CFTMA is equally important.

But the MOST important part of the puzzle is increasing capital-on-hand or liquidity requirements to 20% or so for banks above a specified size, say, twenty-five cents.

It tickles me there are people stupid enough to believe Clinton was a liberal or Reagan was a conservative when both were self-absorbed corporate shills.

 

[eagle1462010]

fyi Read "The Great American Bubble Machine"

It is an excellent article about the SPECULATORS and how they MANIPULATED our Gas Prices which hit the pocket books of every American.

 

[eagle1462010]

[quotehttp://en.wikipedia.org/wiki/Fractional_reserve_banking][/quote]

This is in response to Jukes comments. I'm taking that you are talking about Fractional Banking and raising the capital percentage requirement to keep on hand.

Literally, Fractional Banking ALLOWS BANKS TO MAKE MONEY OUT OF THIN AIR. Or Deposit Multiplication.

 

[Dugdale_Jukes]

[quotehttp://en.wikipedia.org/wiki/Fractional_reserve_banking]

This is in response to Jukes comments. I'm taking that you are talking about Fractional Banking and raising the capital percentage requirement to keep on hand.

Literally, Fractional Banking ALLOWS BANKS TO MAKE MONEY OUT OF THIN AIR. Or Deposit Multiplication.[/QUOTE]

That is what liquidity is.

Bush League Bailouts are another method of making money out of thin air. Instead of seizing these banks and selling the assets at market prices, Bush and Obama perpetuated massive fraud against the United States.

When the enemy wears the same uniform one wears, it's time for a bigger change than usual. In history the bill for the scale and scope of change needed inside the US has been paid in blood. One wonders if the US still the political fortitude to get it done peacefully.

 

[TNHarley]

Rubin should be hung from a rope
Clinton should be forced to rot in jail with the big bankers
All that act was, was a bailout law for big banks
Thank you greedy, dumbass manipulated liberals
Thank you greedy republicans for holding back the rules

 

[eagle1462010]

This is in response to Jukes comments. I'm taking that you are talking about Fractional Banking and raising the capital percentage requirement to keep on hand.

Literally, Fractional Banking ALLOWS BANKS TO MAKE MONEY OUT OF THIN AIR. Or Deposit Multiplication.

That is what liquidity is.

Bush League Bailouts are another method of making money out of thin air. Instead of seizing these banks and selling the assets at market prices, Bush and Obama perpetuated massive fraud against the United States.

When the enemy wears the same uniform one wears, it's time for a bigger change than usual. In history the bill for the scale and scope of change needed inside the US has been paid in blood. One wonders if the US still the political fortitude to get it done peacefully.[/QUOTE]

The Bail outs were a complete and utter Joke. As most of those bailed out had ties to the Federal Reserve. Trillions in Federal Reserve Loans were later given out to those who received bail outs and then suddenly many paid back their loans and the Feds pumped their chests saying "LOOK THEY PAID BACK THE LOANS".

SMOKE AND MIRRORS............... I'd have to look it up again, but Bloomberg forced a Supreme Court ruling that forced the DISCLOSURE OF THESE LOANS.

Next, while I agree with you on your comments, the DERIVATIVE ISSUE is the 1000 POUND GORRILLA IN THE ROOM. How do you SEIZE 70 TRILLION IN WORTHLESS DERIVATIVES WHEN you take over some of the GORRILLA BANKS? Their Derivatives aren't worth the paper they are written on, and thus the CATCH 22 issue in this case.

 

[eagle1462010]

World Derivatives Market Estimated As Big As $1.2 Quadrillion Notional, as Banks Fight Efforts to Rein It In « naked capitalism

1.2 QUADTRILLION IN DERIVATIVES.

Derivatives caused the crash from the BURP on the Housing Market which is a SMALL FRACTION of the overall totals.

Had they seized the companies responsible holding 70 Trillion of BS Derivatives the World Economy would have COMPLETELY CRASHED................ Yet the Bail outs were nothing but a Smoke Screen.

 

[eagle1462010]

Federal Reserve made $9 trillion in emergency loans - Dec. 1, 2010

Fed made $9 trillion in emergency overnight loans

 

[Dugdale_Jukes]

CDOs were bad.

The CFTMA put them on steroids.

The day the shit hit the fan on Wall Street there were derivatives totalling about USD600kkkk notional/nominal value. Probably 50% of them were not worth the paper they were printed on. Another 35% were worth half their sale price. It could be 15% were worth more than half their original sale price.

The right thing to do would have been to let the market work its magic. It isn't like relatively healthy banks couldn't have scooped up the pieces. That these scabrous securities were not vaporized is the reason the global economy is locked up still.

All that fucking moron in the white house is doing is working Reaganesque magic pumping borrowed money (America's future) into the economy (down the drain) through corporations and government. At least nutballs get it this time that spending three dollars to get one to Main Street isn't really much of a magic act. Where were the white trash scum of the fucking earth when they might have stopped it - in 1982 or so? Worshiping their enemy is where they were. HL Mencken dialed these motherfuckers in a long time ago.

One hopes this has a very, very bad end.

 

[EdwardBaiamonte]

Perhaps it is time to repeal the Gramm-Leach-Bliley Act of 1999. Was the passage of this law what led to the financial crisis the United States felt in 2008-2009?

of course not, the housing bubble required a lot a money to buy and bid up the prices of the nation's houses. The Fed's policy was to print that money and make the bubble possible!! Without the Fed it was 100% impossible.

Fanny/Freddy complimented the Fed's policy by buying and guaranteeing all the mortgages so there was no need for anyone to be cautious, not individual home buyers or Wall Street speculators.

our great newspapers and economists on left and right agree it was liberal government that caused the current depression.

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NYTimes and the Wall Street Journal agree on its validity!"...John B. Taylor


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"( uber left economist)

You may not have heard of the Federal Reserve system but it exists to inflate and deflate the currency supply through the housing market. They inflated too much for too long. This caused what they call a housing bubble. While the bubble was inflating all the big banks and many insurance companies bought bubble mortgages thinking they were sound rather than merely purchased or made possible by newly printed funny money. When the bubble deflated they all lost money on the mortgages. It would be analogous to the government making cars and giving them to GM so everyone could have a car. If GM got them by the ton and for very little money of course they would find a way to move them . This is essentially what the Banks did with the free money. In addition to the Federal Reserve System you had Fanny and Freddie which bought and guaranteed many of the mortgages so no one had to worry about them failing. Then you had CRA, FHA, Federal Home Loan Bank Board( 3% down payment loans) and several others that were designed to get everybody in their own home.

When the states tried to move against predatory lending by national banks they were blocked by the bank's federal regulator, the office of the comptroller of the currency, That empowered money lenders say Lynn Turner.

Just as significantly you had very badly conceived accounting rules that hid the problems from everyone until it was too late. Accounting rules are supposed to do the opposite, not move billions in potential liabilities off the balance sheet onto tiny footnote on the bottom of a page as happened at Citibank, or onto on sentence at the end of a 10-Q report as happened at AIG, or as generally happened with SIVs (structured investment vehicles). Then you had gov't rules from the last crisis, the Enron Crisis, the created mark-to- market accounting rules for this crisis that many believe greatly exacerbated this crisis.

Then you had the problem with the government backed ratings agencies that simply failed to rate the mortgage backed and related securities, properly. Sorry, it had little to do with Bush, but had everything to do with inane attempts by the liberal to regulate the free market!


Warren Buffett: "There are significant limits to what regulation can accomplish. As a dramatic illustration, take two of the biggest accounting disasters in the past ten years: Freddie Mac and Fannie Mae. We're talking billions and billions of dollars of misstatements at both places".

Now, these are two incredibly important institutions. I mean, they accounted for over 40% of the mortgage flow a few years back. Right now I think they're up to 70%. They're quasi-governmental in nature. So the government set up an organization called OFHEO. I'm not sure what all the letters stand for. [Note to Warren: They stand for Office of Federal Housing Enterprise Oversight.] But if you go to OFHEO's website, you'll find that its purpose was to just watch over these two companies. OFHEO had 200 employees. Their job was simply to look at two companies and say, "Are these guys behaving like they're supposed to?" And of course what happened were two of the greatest accounting misstatements in history while these 200 people had their jobs. It's incredible. I mean, two for two!

“Whatever regulatory changes are made, they will pale in comparison to the change already evident in today’s markets,” he said. “Those markets for an indefinite future will be far more restrained than would any currently contemplated new regulatory regime.”-Alan Greenspan

Courtesy A. Smith:FDR created Fannie.
LBJ Privatized Fannie - creating an "enron" like environment:
Greg Mankiw's Blog: Thanks, LBJ

Carter's Community Reinvestment Act - accelerated by Clinton - pushed risky loans:
Community Reinvestment Act - Wikipedia, the free encyclopedia

Clinton pushed Fannie into Subprime - the most critical mistake:
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village Voice

Even the NY Times figured this out: Fannie Mae Eases Credit To Aid Mortgage Lending - NYTimes.com

Bush and McCain attempted to reform Fannie on 17 occasions
Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone Only To Have Dems Ignored His Warnings :: Political News and commentaries :: Hyscience

The risky subprime loans fueled another layer of risk - derivatives
https://www.istockanalyst.com/article/viewarticle/articleid/2947518

The LA Times reported on Clinton's "subprime" success in 1999:
Minorities' Home Ownership Booms Under Clinton but Still Lags Whites' - Los Angeles Times