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Commercial banks would not have been able to buy the securities sold by the investment banks and sell them to their customers. That's how.There are various threads on here that, depending on one's partisanship, place the blame for the economy's weaknesses on either GWB or Obama. I believe that much of the blame falls on what happened 16 years ago.
In 1933, in the wake of the 1929 stock market crash, two members of Congress put their names on what is known today as the Glass-Steagall Act. This act separated investment from commercial banking. At the time, "improper banking activity," or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash.
The financial crisis of 2008 might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades. If there is any hope of avoiding another meltdown, it's critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.
In 1999, led by President Bill Clinton and Republican Sen. Phil Gramm joined forces to repeal Glass-Steagall at the behest of the big banks. What happened over the next eight years was an almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and once again they sold them to their customers in the form of securities. The bubble peaked in 2007 and collapsed in 2008. The hard-earned knowledge of 1933 had been lost in the arrogance of 1999.
So here are the questions:
- Should the Glass-Steagall Act be reinstated? If no, why not?
- Would this Act be more likely to be reinstated by a Dem…..or GOP WH and Congress?
- Should the endorsement or rejection of the Act reinstatement be a direct question posed to EACH of the candidates for the WH in 2016?
How would Glass-Steagall have prevented banks from writing or buying crappy mortgages?
No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.The banks are no longer Too Big To Fail. They are beyond that now.
They are Too Big To Save.
1. We need Glass-Steagall, or something very much like it, back as quickly as possible. Too Big To Fail has not gone away by any means and another 2008 could easily happen again. Further, the massive and obvious conflicts of interest inherent in the big banks without Glass Steagall make the upper tiers of the American banking system a joke that should be an insult to all.
2. The fact that Too Big To Fail still exists is perhaps the biggest testament to a political system that allows its "leaders" to be bought off in plain sight. There is zero (0) excuse for this, and it's quite obvious that neither Democrats nor Republicans have the balls to do what has to be done because they're afraid to lose their cushy jobs. Two notable exceptions: Warren & Sanders.
3. Absolutely, every candidate should be pressed on this issue. But here's the problem: This is a complex issue and it must be addressed in the simplest and clearest possible terms. These people are bought off and have to be aggressively and clearly challenged on this before it's too late.
.
Glass-Steagall should be reinstated.
Thats sort of true but not a good explanation. Because there is no good explanation. GS would never have prevented the banking crisis, just as it failed to prevent many previous banking crises.Commercial banks like Citigroup would not have been able to buy the securities sold by the investment banks and sell them to their customers. That's how.There are various threads on here that, depending on one's partisanship, place the blame for the economy's weaknesses on either GWB or Obama. I believe that much of the blame falls on what happened 16 years ago.
In 1933, in the wake of the 1929 stock market crash, two members of Congress put their names on what is known today as the Glass-Steagall Act. This act separated investment from commercial banking. At the time, "improper banking activity," or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash.
The financial crisis of 2008 might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades. If there is any hope of avoiding another meltdown, it's critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.
In 1999, led by President Bill Clinton and Republican Sen. Phil Gramm joined forces to repeal Glass-Steagall at the behest of the big banks. What happened over the next eight years was an almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and once again they sold them to their customers in the form of securities. The bubble peaked in 2007 and collapsed in 2008. The hard-earned knowledge of 1933 had been lost in the arrogance of 1999.
So here are the questions:
- Should the Glass-Steagall Act be reinstated? If no, why not?
- Would this Act be more likely to be reinstated by a Dem…..or GOP WH and Congress?
- Should the endorsement or rejection of the Act reinstatement be a direct question posed to EACH of the candidates for the WH in 2016?
How would Glass-Steagall have prevented banks from writing or buying crappy mortgages?
The investment banks would still have been able to create crappy mortgages, but their customer pool would have been much smaller.
Commercial banks would not have been able to buy the securities sold by the investment banks and sell them to their customers. That's how.There are various threads on here that, depending on one's partisanship, place the blame for the economy's weaknesses on either GWB or Obama. I believe that much of the blame falls on what happened 16 years ago.
In 1933, in the wake of the 1929 stock market crash, two members of Congress put their names on what is known today as the Glass-Steagall Act. This act separated investment from commercial banking. At the time, "improper banking activity," or what was considered overzealous commercial bank involvement in stock market investment, was deemed the main culprit of the financial crash.
The financial crisis of 2008 might not have happened at all but for the 1999 repeal of the Glass-Steagall law that separated commercial and investment banking for seven decades. If there is any hope of avoiding another meltdown, it's critical to understand why Glass-Steagall repeal helped to cause the crisis. Without a return to something like Glass-Steagall, another greater catastrophe is just a matter of time.
In 1999, led by President Bill Clinton and Republican Sen. Phil Gramm joined forces to repeal Glass-Steagall at the behest of the big banks. What happened over the next eight years was an almost exact replay of the Roaring Twenties. Once again, banks originated fraudulent loans and once again they sold them to their customers in the form of securities. The bubble peaked in 2007 and collapsed in 2008. The hard-earned knowledge of 1933 had been lost in the arrogance of 1999.
So here are the questions:
- Should the Glass-Steagall Act be reinstated? If no, why not?
- Would this Act be more likely to be reinstated by a Dem…..or GOP WH and Congress?
- Should the endorsement or rejection of the Act reinstatement be a direct question posed to EACH of the candidates for the WH in 2016?
How would Glass-Steagall have prevented banks from writing or buying crappy mortgages?
The investment banks would still have been able to create crappy securities, but their customer pool would have been much smaller. And so they would not have created as many crappy securities and the crisis would not have been as large as it was.
I think it has been long established you know fuck-all about the way our financial system operates and its ins and outs.No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.The banks are no longer Too Big To Fail. They are beyond that now.
They are Too Big To Save.
Depends. If your goal was to topple the government and establish a Corporatocracy or Corporate dictatorship, the best way to go about it would be to cause a banking meltdown and/or create a lot of domestic chaos.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.The banks are no longer Too Big To Fail. They are beyond that now.
They are Too Big To Save.
Banks couldn't buy securitized mortgages under GS? Really?
Not just the bogus belief banks (and investment houses) would self regulate, but the belief that sound business practices would cause them to adequately capitalize risk. Essentially, what they did was capitalize the risk by buying bad debt from each other. So, there are only two remedies. Mandate better capitalization of risk or limit their ability to raise money from investors to risk. The former is realistically impossible, because the anti-GS folks were right in that the regulators really weren't better bankers than the bankers, so regulating capitalization won't ensure a better result. The latter is realistically workable, but as others point out, we don't have the political will to do it.Glass-Steagall was not a direct cause of the crash. It certainly amplified it, but it was not a primary agent. Point of fact, Lehman Brothers and Bear Stearns and Goldman Sachs, et al. were nonbank firms.
And Glass-Steagall was pretty much a dead issue by 1999. It had been greatly eroded in the 1980s, and Gramm-Leach-Bliley was just the final cut.
No, you have to look at the big picture. It was the entire deregulatory environment which contributed to the crash, not just the death of Glass-Steagall. It was the bogus belief that banks would regulate themselves which was the fatal flaw.
Banks couldn't buy securitized mortgages under GS? Really?
A commercial bank which took deposits could not trade in anything other than government bonds. They could not underwrite securities.
I find it ironic that you accuse anyone of ignorance. Your posts have deteriorated in quality, like you have creeping senility.I think it has been long established you know fuck-all about the way our financial system operates and its ins and outs.No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.The banks are no longer Too Big To Fail. They are beyond that now.
They are Too Big To Save.
The large banks which survived the crash are bigger than ever. And each government rescue since Continental Illinois has been successively bigger and bigger and bigger. The next crash will be too big even for the government to stop.
Your ignorance is astounding.Banks couldn't buy securitized mortgages under GS? Really?
A commercial bank which took deposits could not trade in anything other than government bonds. They could not underwrite securities.
"The bank in question"?!?I find it ironic that you accuse anyone of ignorance. Your posts have deteriorated in quality, like you have creeping senility.I think it has been long established you know fuck-all about the way our financial system operates and its ins and outs.No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.The banks are no longer Too Big To Fail. They are beyond that now.
They are Too Big To Save.
The large banks which survived the crash are bigger than ever. And each government rescue since Continental Illinois has been successively bigger and bigger and bigger. The next crash will be too big even for the government to stop.
We dont know what will happen in the next downturn. With any luck commonsense with prevail and the bank in question will go through an orderly bankruptcy.
More blathering bullshit from you."The bank in question"?!?I find it ironic that you accuse anyone of ignorance. Your posts have deteriorated in quality, like you have creeping senility.I think it has been long established you know fuck-all about the way our financial system operates and its ins and outs.No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.
The large banks which survived the crash are bigger than ever. And each government rescue since Continental Illinois has been successively bigger and bigger and bigger. The next crash will be too big even for the government to stop.
We dont know what will happen in the next downturn. With any luck commonsense with prevail and the bank in question will go through an orderly bankruptcy.
BWA-HA-HA-HA!
Was there a "bank in question" in 2008?
The global derivatives trading system is far, far too intertwined now for there to be just one bank that will fail in any future crisis. That should have been made obvious to someone even as dense as you in 2008.
The Fed made the mistake of thinking the way you do with Bear Stearns. Just let the "bank in question" go through an orderly bankruptcy, guys!
How'd that work out?
You see, the government has been propping up Wall Street for a very long time now. Ever since Continental Illinois, the federal government has been a silent partner, and our financial system has become more vulnerable with each rescue. The business model is rotten to the core and the government has prevented superior business models from replacing the cancerous one we have now.
Your ignorance is astounding.Banks couldn't buy securitized mortgages under GS? Really?
A commercial bank which took deposits could not trade in anything other than government bonds. They could not underwrite securities.
The very reason "commerical banks could and did invest in mortgages and MBS for their own accounts" is because Glass-Steagall had been repealed.The Glass–Steagall separation of commercial and investment banking was in four sections of the 1933 Banking Act (sections 16, 20, 21, and 32).[1] The Banking Act of 1935 clarified the 1933 legislation and resolved inconsistencies in it. Together, they prevented commercial Federal Reserve member banks from:
Conversely, Glass-Steagall prevented securities firms and investment banks from taking deposits.
- dealing in non-governmental securities for customers
- investing in non-investment grade securities for themselves
- underwriting or distributing non-governmental securities
- affiliating (or sharing employees) with companies involved in such activities
Commercial banks could and did invest in mortgages and MBS for their own accounts.
I'm not differing with you, but I'm honestly not aware of superior business models. ???"The bank in question"?!?I find it ironic that you accuse anyone of ignorance. Your posts have deteriorated in quality, like you have creeping senility.I think it has been long established you know fuck-all about the way our financial system operates and its ins and outs.No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.Is that supposed to mean something? Because it doesn.t.
The large banks which survived the crash are bigger than ever. And each government rescue since Continental Illinois has been successively bigger and bigger and bigger. The next crash will be too big even for the government to stop.
We dont know what will happen in the next downturn. With any luck commonsense with prevail and the bank in question will go through an orderly bankruptcy.
BWA-HA-HA-HA!
Was there a "bank in question" in 2008?
The global derivatives trading system is far, far too intertwined now for there to be just one bank that will fail in any future crisis. That should have been made obvious to someone even as dense as you in 2008.
The Fed made the mistake of thinking the way you do with Bear Stearns. Just let the "bank in question" go through an orderly bankruptcy, guys!
How'd that work out?
You see, the government has been propping up Wall Street for a very long time now. Ever since Continental Illinois, the federal government has been a silent partner, and our financial system has become more vulnerable with each rescue. The business model is rotten to the core and the government has prevented superior business models from replacing the cancerous one we have now.
Im sorry. I quoted the link as to what GS did and what it allowed banks to do and you assert the opposite.Your ignorance is astounding.Banks couldn't buy securitized mortgages under GS? Really?
A commercial bank which took deposits could not trade in anything other than government bonds. They could not underwrite securities.
Oh, the irony!
The very reason "commerical banks could and did invest in mortgages and MBS for their own accounts" is because Glass-Steagall had been repealed.The Glass–Steagall separation of commercial and investment banking was in four sections of the 1933 Banking Act (sections 16, 20, 21, and 32).[1] The Banking Act of 1935 clarified the 1933 legislation and resolved inconsistencies in it. Together, they prevented commercial Federal Reserve member banks from:
Conversely, Glass-Steagall prevented securities firms and investment banks from taking deposits.
- dealing in non-governmental securities for customers
- investing in non-investment grade securities for themselves
- underwriting or distributing non-governmental securities
- affiliating (or sharing employees) with companies involved in such activities
Commercial banks could and did invest in mortgages and MBS for their own accounts.
WHICH WAS THE WHOLE POINT BEING MADE, DUMBASS. If Glass-Steagall had not been repealed, they would have been prevented from investing in MBS for their own accounts, and thus the crisis would have been much smaller.
Your ignorance is astounding.Banks couldn't buy securitized mortgages under GS? Really?
A commercial bank which took deposits could not trade in anything other than government bonds. They could not underwrite securities.
Oh, the irony!
The very reason "commerical banks could and did invest in mortgages and MBS for their own accounts" is because Glass-Steagall had been repealed.The Glass–Steagall separation of commercial and investment banking was in four sections of the 1933 Banking Act (sections 16, 20, 21, and 32).[1] The Banking Act of 1935 clarified the 1933 legislation and resolved inconsistencies in it. Together, they prevented commercial Federal Reserve member banks from:
Conversely, Glass-Steagall prevented securities firms and investment banks from taking deposits.
- dealing in non-governmental securities for customers
- investing in non-investment grade securities for themselves
- underwriting or distributing non-governmental securities
- affiliating (or sharing employees) with companies involved in such activities
Commercial banks could and did invest in mortgages and MBS for their own accounts.
WHICH WAS THE WHOLE POINT BEING MADE, DUMBASS. If Glass-Steagall had not been repealed, they would have been prevented from investing in MBS for their own accounts, and thus the crisis would have been much smaller.
You are not aware of them because they do not exist. The government has allowed sick and corrupt banks to survive when they should be wound down and replaced by businesses which are not sick and corrupt. Such businesses would quickly arise if given the opportunity to do so. They always do.I'm not differing with you, but I'm honestly not aware of superior business models. ???"The bank in question"?!?I find it ironic that you accuse anyone of ignorance. Your posts have deteriorated in quality, like you have creeping senility.I think it has been long established you know fuck-all about the way our financial system operates and its ins and outs.No, actually it doeesnt mean that. And your assertion is mere bullshit.It means that in the event of another banking meltdown, not even the government will be able to save Wall Street from falling into the abyss.
The large banks which survived the crash are bigger than ever. And each government rescue since Continental Illinois has been successively bigger and bigger and bigger. The next crash will be too big even for the government to stop.
We dont know what will happen in the next downturn. With any luck commonsense with prevail and the bank in question will go through an orderly bankruptcy.
BWA-HA-HA-HA!
Was there a "bank in question" in 2008?
The global derivatives trading system is far, far too intertwined now for there to be just one bank that will fail in any future crisis. That should have been made obvious to someone even as dense as you in 2008.
The Fed made the mistake of thinking the way you do with Bear Stearns. Just let the "bank in question" go through an orderly bankruptcy, guys!
How'd that work out?
You see, the government has been propping up Wall Street for a very long time now. Ever since Continental Illinois, the federal government has been a silent partner, and our financial system has become more vulnerable with each rescue. The business model is rotten to the core and the government has prevented superior business models from replacing the cancerous one we have now.
Yes precisely. Only an idiot like G5000 cant understand that fact. Personally I think he's a sock for JakeStarkey.Your ignorance is astounding.Banks couldn't buy securitized mortgages under GS? Really?
A commercial bank which took deposits could not trade in anything other than government bonds. They could not underwrite securities.
Oh, the irony!
The very reason "commerical banks could and did invest in mortgages and MBS for their own accounts" is because Glass-Steagall had been repealed.The Glass–Steagall separation of commercial and investment banking was in four sections of the 1933 Banking Act (sections 16, 20, 21, and 32).[1] The Banking Act of 1935 clarified the 1933 legislation and resolved inconsistencies in it. Together, they prevented commercial Federal Reserve member banks from:
Conversely, Glass-Steagall prevented securities firms and investment banks from taking deposits.
- dealing in non-governmental securities for customers
- investing in non-investment grade securities for themselves
- underwriting or distributing non-governmental securities
- affiliating (or sharing employees) with companies involved in such activities
Commercial banks could and did invest in mortgages and MBS for their own accounts.
WHICH WAS THE WHOLE POINT BEING MADE, DUMBASS. If Glass-Steagall had not been repealed, they would have been prevented from investing in MBS for their own accounts, and thus the crisis would have been much smaller.
Banks invested in mortgages under Glass-Steagall, which is why it wouldn't have prevented the crisis.
