Should the Glass Steagall Act be brought back?

[Dad2three]

you don't understand what glass-steagle did, do you?

here's what it would have prevented since you seem particularly confused. it would have kept banks from playing with the savings side of their business. and since you clearly don't understand what caused the crash... that would have printed the rise of garbage asset backed securities.

i hope that helps. i'm afraid i can't help your inability to articulate without a spew of profanity.

it would have kept banks from playing with the savings side of their business.

It would not have prevented bad mortgages.
It would not have prevented the crisis.[/QUOTE]


Yes, it would have prevented "bad" mortgages. You know why? Because first of all there has to be a source of money to fund the individual mortgage loan being written and second there had to be a secondary mortgage market created to sell the Mortgage Backed Securities that were now full of junk loans.

No traditional banks would have ever jeopardized their savings base making the types of loan being offered. No real mortgage banker would of even thought of offering some of the stupid loans that were being made.

Wall street DID provide a source of money to fund mortgage loans, bought and sold the mortgage backed securities and bought and sold derivatives to hedge their bets once they found out the securities were full of shit loans.

That would have never been possible before the repeal of Glass Steagal.

Why did it take until late 2004 for the subprime crisis to start if G/S stopped that?

 

[Dad2three]

you don't understand what glass-steagle did, do you?

here's what it would have prevented since you seem particularly confused. it would have kept banks from playing with the savings side of their business. and since you clearly don't understand what caused the crash... that would have printed the rise of garbage asset backed securities.

i hope that helps. i'm afraid i can't help your inability to articulate without a spew of profanity.

it would have kept banks from playing with the savings side of their business.

It would not have prevented bad mortgages.
It would not have prevented the crisis.[/QUOTE]


Yes, it would have prevented "bad" mortgages. You know why? Because first of all there has to be a source of money to fund the individual mortgage loan being written and second there had to be a secondary mortgage market created to sell the Mortgage Backed Securities that were now full of junk loans.

No traditional banks would have ever jeopardized their savings base making the types of loan being offered. No real mortgage banker would of even thought of offering some of the stupid loans that were being made.

Wall street DID provide a source of money to fund mortgage loans, bought and sold the mortgage backed securities and bought and sold derivatives to hedge their bets once they found out the securities were full of shit loans.

That would have never been possible before the repeal of Glass Steagal.

A major source of demand for AAA assets came from foreign institutional investors. Caballero (2010, 2009) argues that global payment imbalances were the manifestation of “global excess demand” for AAA securities that placed “enormous pressure on the U.S. financial system and its incentives.” Similarly, Gourinchas (2010) argues that excess demand for AAA assets “created an irresistible profit opportunity for the U.S. financial system” to create and market “safe” asset - backed securities to the rest of the world. Diamond and Rajan (2009) find that securitization became focused on squeezing out the most AAA paper from an underlying package of mortgages” because, according to Gorton and Metrick (2009), “there is not enough AAA debt in the world to satisfy demand.”


http://business.gwu.edu/creua/research-papers/files/fannie-freddie.pdf


US MORTGAGE MARKET WENT FROM $1 TRILLION A YEAR IN 2000 TO $4 TRILLION BY 2004


PLS (“private label” asset - backed securities) did this, not repeal of G//S

The Banksters went from AAA real securities to synthetic securities, aided by their creativeness'


60 per cent of all mortgage origination between 2005 and 2007 had “reckless or toxic features”````


America's economy risks the mother of all meltdowns - FT.com


Regulators and policymakers enabled this process at virtually every turn. Part of the reason they failed to understand the housing bubble was willful ignorance: they bought into the argument that the market would equilibrate itself. In particular, financial actors and regulatory officials both believed that secondary and tertiary markets could effectively control risk through pricing.


http://www.tobinproject.org/sites/tobinproject.org/files/assets/Fligstein_Catalyst of Disaster_0.pdf

 

[Contumacious]

If I remember correctly , Bush was a "compassionate Conservative". No politician can be elected nowadays unless they enhance the welfare state benefits.

You mean an ideologue who 'believed in' markets will self regulate so who could ignore FBI warnings that started in 2004 and pull 1,800+ agents out of white collar WHILE he pushed his 'home ownership society' ponzi scheme on US?

There is no US politician who believes that markets will regulate themselves. US fascism uses the massive domestic paramilitary force , aka, the FBI, BATF, DEA, SEC and if they are in the mood, the Delta Force.

.

 

[Dad2three]

If I remember correctly , Bush was a "compassionate Conservative". No politician can be elected nowadays unless they enhance the welfare state benefits.

You mean an ideologue who 'believed in' markets will self regulate so who could ignore FBI warnings that started in 2004 and pull 1,800+ agents out of white collar WHILE he pushed his 'home ownership society' ponzi scheme on US?

There is no US politician who believes that markets will regulate themselves. US fascism uses the massive domestic paramilitary force , aka, the FBI, BATF, DEA, SEC and if they are in the mood, the Delta Force.

.

Weird how Reagan ignored Mr Gray's warnings in 1984 then 20 years later Dubya did the same right?

The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn't work and then they get elected and prove it.
P. J. O'Rourke

 

[Andylusion]

You mean an ideologue who 'believed in' markets will self regulate so who could ignore FBI warnings that started in 2004 and pull 1,800+ agents out of white collar WHILE he pushed his 'home ownership society' ponzi scheme on US?

There is no US politician who believes that markets will regulate themselves. US fascism uses the massive domestic paramilitary force , aka, the FBI, BATF, DEA, SEC and if they are in the mood, the Delta Force.

.

Weird how Reagan ignored Mr Gray's warnings in 1984 then 20 years later Dubya did the same right?

The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn't work and then they get elected and prove it.
P. J. O'Rourke

Let me see if I understand you correctly.... Every single democrat, had absolutely nothing to do with the crash, and did everything they could to prevent it.

But every single Republican did everything they could to cause the crash, and ruin the country.

Is that about right?

 

[Dad2three]

There is no US politician who believes that markets will regulate themselves. US fascism uses the massive domestic paramilitary force , aka, the FBI, BATF, DEA, SEC and if they are in the mood, the Delta Force.

.

Weird how Reagan ignored Mr Gray's warnings in 1984 then 20 years later Dubya did the same right?

The Democrats are the party that says government will make you smarter, taller, richer, and remove the crabgrass on your lawn. The Republicans are the party that says government doesn't work and then they get elected and prove it.
P. J. O'Rourke

Let me see if I understand you correctly.... Every single democrat, had absolutely nothing to do with the crash, and did everything they could to prevent it.

But every single Republican did everything they could to cause the crash, and ruin the country.

Is that about right?

So you do have reading comprehension issues. I knew it


DUBYA FOUGHT ALL 50 STATE AG'S IN 2003, INVOKING A CIVIL WAR ERA RULE SAYING FEDS RULE ON "PREDATORY" LENDERS!

Dubya was warned by the FBI of an "epidemic" of mortgage fraud in 2004. He gave them less resources. Later in 2004 Dubya allowed the leverage rules to go from 12-1 to 33-1 which flooded the market with cheap money!


Thanks again to the Bush administrations allowing the greedy & unethical brokers to operate at their will.

I THOUGHT YOU WEREN'T GOING TO RESPOND? How about Dubya's home ownership society ponzi scheme I linked you completely ignored? lol

 

[Contumacious]

Black market? lol

Ignorance you show on this site is hilarious Bubba

Tell me fucktard, what regulation would have prevented the collapse?

Would assigning a federal agent to each and everyone in the banking industry satisfy your socialistic inclinations?

.

you don't understand what glass-steagle did, do you?

here's what it would have prevented since you seem particularly confused. it would have kept banks from playing with the savings side of their business. and since you clearly don't understand what caused the crash... that would have printed the rise of garbage asset backed securities.

i hope that helps. i'm afraid i can't help your inability to articulate without a spew of profanity.

You don't understand what glass-steagall did, do you? Since it appears that you are blind and/or have some kind of cognitive impairment I am going to use a large fonts.

Shattering the Glass-Steagall myth

Facts such as that Bear Stearns, Lehman Brothers and Merrill Lynch — three institutions at the heart of the crisis — were pure investment banks that had never crossed the old line into commercial banking. The same goes for Goldman Sachs, another favorite villain of the left.

The infamous AIG? An insurance firm. New Century Financial? A real estate investment trust. No Glass-Steagall there.

Two of the biggest banks that went under, Wachovia and Washington Mutual, got into trouble the old-fashioned way – largely by making risky loans to homeowners. Bank of America nearly met the same fate, not because it had bought an investment bank but because it had bought Countrywide Financial, a vanilla-variety mortgage lender."

.

 

[eagle1462010]

9 Biggest Banks' Derivative Exposure - $228.72 Trillion
Note the little man standing in front of white house. The little worm next to lastfootball field is a truck with $2 billion dollars.
There is no government in the world that has this kind of money. This is roughly 3 times the entire world economy. The unregulated market presents a massive financial risk. The corruption and immorality of the banks makes the situation worse.

If you don't want to bank with these banks, but want to have access to free ATM's anywhere-- most Credit Unions in USA are in the CO-OP ATM network, where all ATM's are free to any COOP CU member and most support depositing checks. The Credit Unions are like banks, but invest all their profits to give members lower rates and better service. They don't have shareholders to worry about or have derivatives to purchase and sell.

Keep an eye out in the news for "derivative crisis", as the crisis is inevitable with current falling value of most real assets.
Derivative Data Source: ZeroHedge

 

[Procrustes Stretched]

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis, which is linked to the financial crisis of 2007–2009.[49] He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans, with the main exception being a bill with Republican Mike Oxley that died because of opposition from President Bush.[49] The 2005 bill included Frank objectives, which were to impose tighter regulation of Fannie and Freddie and new funds for rental housing. Frank and Mike Oxley achieved broad bipartisan support for the bill in the Financial Services Committee, and it passed the House. But the Senate never voted on the measure, in part because President Bush was likely to veto it. "If it had passed, that would have been one of the ways we could have reined in the bowling ball going downhill called housing," Oxley told Frank. In an op-ed piece in the Wall Street Journal, Lawrence B. Lindsey, a former economic adviser to President George W. Bush, wrote that Frank "is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters."[7] Once control shifted to the Democrats, Frank was able to help guide both the Federal Housing Reform Act (H.R. 1427) and the Mortgage Reform and Anti-Predatory Lending Act (H.R. 3915) to passage in 2007.[49] Frank also said that the Republican-led Gramm–Leach–Bliley Act of 1999, which repealed part of the Glass–Steagall Act of 1933 and removed the wall between commercial and investment banks, contributed to the financial meltdown.[49] Frank stated further that "during twelve years of Republican rule no reform was adopted regarding Fannie Mae and Freddie Mac. In 2007, a few months after I became the Chairman, the House passed a strong reform bill; we sought to get the [Bush] administration's approval to include it in the economic stimulus legislation in January 2008; and finally got it passed and onto President Bush's desk in July 2008. Moreover, "we were able to adopt it in nineteen months, and we could have done it much quicker if the [Bush] administration had cooperated."[50] Barney Frank - Wikipedia, the free encyclopedia

Roles are different because Fannie and Freddie are huge. Of course the reason Fannie and Freddie are huge, is because they are backed by the government.

Countrywide was a subsidary before the crash. It didn't prevent them from crashing. Nor would some bank owning aluminum.

The roles are different because Fannie and Freddie purchase home loans made by private firms and package those loans into mortgage-backed securities. Funny how you think that means independent mortgage lenders compete against Fannie and Freddie.

NONSENSE

"Fannie and Freddie


.... the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans."

.

So was Barney Frank to blame for our woes? There are two lines of argument here, and neither is all that compelling. The first contention is that Frank failed to exercise diligent oversight of Fannie Mae and Freddie Mac as the housing bubble swelled. There’s something to this, though it’s worth noting that Frank was in the congressional minority for most of the period in question. The second argument is that Frank and other Democrats — by promoting policies to boost affordable housing — somehow caused the subprime mess and financial collapse. That argument is especially hard to square with the facts.

First, it’s true that Frank was hardly Fannie and Freddie’s biggest critic. Nor did he spot the housing bubble. Back in 2003, as the Examiner’s Philip Klein points out, Frank said that the government-sponsored entities were not in any sort of crisis. “The more people exaggerate these problems,” Frank told the New York Times, “the more pressure there is on these companies, the less we will see in terms of affordable housing.” Not the most prescient of comments. (Note, however, that in 2003, Fannie and Freddie weren’t yet heavily involved in the mortgage-backed security market. They were actually losing market share to private banks, as the chart on right from researchers at the University of North Carolina shows.) -- Barney Frank didn?t cause the housing crisis - The Washington Post

missed a few things?

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats,l]

A 2009 response would have been too late. But your assertion is pure bullshit.

Save Fannie Mae Coalition

A partnership of businesses, civil rights organizations and trade associations are launching United for American Homeownership, a coalition dedicated to supporting communities by preserving and strengthening Fannie Mae and Freddie Mac.

.

 

[Procrustes Stretched]

So was Barney Frank to blame for our woes? There are two lines of argument here, and neither is all that compelling. The first contention is that Frank failed to exercise diligent oversight of Fannie Mae and Freddie Mac as the housing bubble swelled. There’s something to this, though it’s worth noting that Frank was in the congressional minority for most of the period in question. The second argument is that Frank and other Democrats — by promoting policies to boost affordable housing — somehow caused the subprime mess and financial collapse. That argument is especially hard to square with the facts.

First, it’s true that Frank was hardly Fannie and Freddie’s biggest critic. Nor did he spot the housing bubble. Back in 2003, as the Examiner’s Philip Klein points out, Frank said that the government-sponsored entities were not in any sort of crisis. “The more people exaggerate these problems,” Frank told the New York Times, “the more pressure there is on these companies, the less we will see in terms of affordable housing.” Not the most prescient of comments. (Note, however, that in 2003, Fannie and Freddie weren’t yet heavily involved in the mortgage-backed security market. They were actually losing market share to private banks, as the chart on right from researchers at the University of North Carolina shows.) -- Barney Frank didn?t cause the housing crisis - The Washington Post

Well first, Barney Frank is on record as saying there was no bubble, and that he planned to continue to push for easier home ownership.

[ame=http://youtu.be/6coIcgdgF5U]Barney Frank 2005: "This is not a housing bubble, it wont collapse" - YouTube[/ame]

So that's not a matter of debate, it's just a flat out fact.

Second, the claim that Fannie and Freddie were not heavily involved in Sub-prime loans, is just flat out wrong.

They were both heavily heavily involved in sub-prime loans.

FHFA Conservator?s Report ? Why Fannie Mae And Freddie Mac Failed | Problem Bank List

According to the conservator's report, almost 40% of all of Fannie and Freddies mortgages were sub-prime by 2003. That's balls deep into sub-prime in my book.

The reason some people claim Fannie and Freddie were not buying up so many sub-prime loans, is because they deliberately hid the number of sub-prime loans, by categorizing them as Alt-A. But Alt-A *IS* a sub-prime loan.

Additionally, a lot of people seem to forget that Fannie and Freddie are not only in the business of buying loans. They also securitize loans.

A private mortgage lender will make a loan. Then they bundle that loan together with a bunch of others, and make a Mortgage Backed Security.

They take this security, and have Freddie or Fannie, stamp their guarantee on that MBS, and then sell it on the open market.

Half of all the losses Freddie and Fannie had, were not from Mortgages they owned, but rather mortgages they guaranteed.

When people look at their portfolio and say 'they were not involved', they simply don't know what they are talking about. They only owned a small fraction of the sub-prime loans, yes. But their stamp of approval was on hundreds of billions of dollars worth in the market.

out of context and cherry picking? hmmm....

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis, which is linked to the financial crisis of 2007–2009.[49] He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans, with the main exception being a bill with Republican Mike Oxley that died because of opposition from President Bush.[49] The 2005 bill included Frank objectives, which were to impose tighter regulation of Fannie and Freddie and new funds for rental housing. Frank and Mike Oxley achieved broad bipartisan support for the bill in the Financial Services Committee, and it passed the House. But the Senate never voted on the measure, in part because President Bush was likely to veto it. "If it had passed, that would have been one of the ways we could have reined in the bowling ball going downhill called housing," Oxley told Frank. In an op-ed piece in the Wall Street Journal, Lawrence B. Lindsey, a former economic adviser to President George W. Bush, wrote that Frank "is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters."[7] Once control shifted to the Democrats, Frank was able to help guide both the Federal Housing Reform Act (H.R. 1427) and the Mortgage Reform and Anti-Predatory Lending Act (H.R. 3915) to passage in 2007.[49] Frank also said that the Republican-led Gramm–Leach–Bliley Act of 1999, which repealed part of the Glass–Steagall Act of 1933 and removed the wall between commercial and investment banks, contributed to the financial meltdown.[49] Frank stated further that "during twelve years of Republican rule no reform was adopted regarding Fannie Mae and Freddie Mac. In 2007, a few months after I became the Chairman, the House passed a strong reform bill; we sought to get the [Bush] administration's approval to include it in the economic stimulus legislation in January 2008; and finally got it passed and onto President Bush's desk in July 2008. Moreover, "we were able to adopt it in nineteen months, and we could have done it much quicker if the [Bush] administration had cooperated."[50] Barney Frank - Wikipedia, the free encyclopedia

Roles are different because Fannie and Freddie are huge. Of course the reason Fannie and Freddie are huge, is because they are backed by the government.

Countrywide was a subsidary before the crash. It didn't prevent them from crashing. Nor would some bank owning aluminum.

The roles are different because Fannie and Freddie purchase home loans made by private firms and package those loans into mortgage-backed securities. Funny how you think that means independent mortgage lenders compete against Fannie and Freddie.

NONSENSE

"Fannie and Freddie


.... the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans."

.

So was Barney Frank to blame for our woes? There are two lines of argument here, and neither is all that compelling. The first contention is that Frank failed to exercise diligent oversight of Fannie Mae and Freddie Mac as the housing bubble swelled. There’s something to this, though it’s worth noting that Frank was in the congressional minority for most of the period in question. The second argument is that Frank and other Democrats — by promoting policies to boost affordable housing — somehow caused the subprime mess and financial collapse. That argument is especially hard to square with the facts.

First, it’s true that Frank was hardly Fannie and Freddie’s biggest critic. Nor did he spot the housing bubble. Back in 2003, as the Examiner’s Philip Klein points out, Frank said that the government-sponsored entities were not in any sort of crisis. “The more people exaggerate these problems,” Frank told the New York Times, “the more pressure there is on these companies, the less we will see in terms of affordable housing.” Not the most prescient of comments. (Note, however, that in 2003, Fannie and Freddie weren’t yet heavily involved in the mortgage-backed security market. They were actually losing market share to private banks, as the chart on right from researchers at the University of North Carolina shows.) -- Barney Frank didn?t cause the housing crisis - The Washington Post

 

[Toddsterpatriot]

you don't understand what glass-steagle did, do you?

here's what it would have prevented since you seem particularly confused. it would have kept banks from playing with the savings side of their business. and since you clearly don't understand what caused the crash... that would have printed the rise of garbage asset backed securities.

i hope that helps. i'm afraid i can't help your inability to articulate without a spew of profanity.

it would have kept banks from playing with the savings side of their business.

It would not have prevented bad mortgages.
It would not have prevented the crisis.

Yes, it would have prevented "bad" mortgages. You know why? Because first of all there has to be a source of money to fund the individual mortgage loan being written and second there had to be a secondary mortgage market created to sell the Mortgage Backed Securities that were now full of junk loans.

No traditional banks would have ever jeopardized their savings base making the types of loan being offered. No real mortgage banker would of even thought of offering some of the stupid loans that were being made.

Wall street DID provide a source of money to fund mortgage loans, bought and sold the mortgage backed securities and bought and sold derivatives to hedge their bets once they found out the securities were full of shit loans.

That would have never been possible before the repeal of Glass Steagal.

Yes, it would have prevented "bad" mortgages.

No, it wouldn't have stopped banks from writing bad mortgages.
Or buying bad mortgages.

No traditional banks would have ever jeopardized their savings base making the types of loan being offered.

Many "traditional banks" wrote bad mortgages, before, during and after Glass Steagall.

 

[Dad2three]

9 Biggest Banks' Derivative Exposure - $228.72 Trillion
Note the little man standing in front of white house. The little worm next to lastfootball field is a truck with $2 billion dollars.
There is no government in the world that has this kind of money. This is roughly 3 times the entire world economy. The unregulated market presents a massive financial risk. The corruption and immorality of the banks makes the situation worse.

If you don't want to bank with these banks, but want to have access to free ATM's anywhere-- most Credit Unions in USA are in the CO-OP ATM network, where all ATM's are free to any COOP CU member and most support depositing checks. The Credit Unions are like banks, but invest all their profits to give members lower rates and better service. They don't have shareholders to worry about or have derivatives to purchase and sell.

Keep an eye out in the news for "derivative crisis", as the crisis is inevitable with current falling value of most real assets.
Derivative Data Source: ZeroHedge

You mean the 'Financialization' of the US since Reagan and 'deregulation' hasn't helped US? I'm shocked


Out of Control Financial Innovation


By now the litany is familiar: the old model of banking, in which banks held on to the loans they made, was replaced by the new practice of originate-and-distribute. Mortgage originators—which in many cases had no traditional banking business—made loans to buy houses, then quickly sold those loans off to other firms. These firms then repackaged those loans by pooling them, then selling shares of these pools of securities; and rating agencies were willing to label the resulting product chicken—that is, to bestow their seal of approval, the AAA rating, on the more senior of these securities, those that had first claim on interest and principal repayment.

Everyone ignored both the risks posed by a general housing bust and the degradation of underwriting standards as the bubble inflated (that ignorance was no doubt assisted by the huge amounts of money being made). When the bust came, much of that AAA paper turned out to be worth just pennies on the dollar.




The Slump Goes On: Why? by Paul Krugman and Robin Wells | The New York Review of Books




‘Financialization’ as a Cause of Economic Malaise

They cite research by Thomas Philippon of New York University and Ariell Reshef of the University of Virginia that compensation in the financial services industry was comparable to that in other industries until 1980. But since then, it has increased sharply and those working in financial services now make 70 percent more on average.



While all economists agree that the financial sector contributes significantly to economic growth, some now question whether that is still the case.




...Ozgur Orhangazi of Roosevelt University has found that investment in the real sector of the economy falls when financialization rises. Moreover, rising fees paid by nonfinancial corporations to financial markets have reduced internal funds available for investment, shortened their planning horizon and increased uncertainty.



He suggests, rather, that the financial sector’s gains have been more in the form of economic rents — basically something for nothing — than the return to greater economic value.

Another way that the financial sector leeches growth from other sectors is by attracting a rising share of the nation’s “best and brightest” workers, depriving other sectors like manufacturing of their skills.


http://economix.blogs.nytimes.com/2...-economic-malaise/?_php=true&_type=blogs&_r=0

YOU SOUND LIKE A GAWWWDAMN SOCIALIST RANTING ABOUT CREDIT UNIONS AND SHAREHOLDERS

 

[Toddsterpatriot]

you don't understand what glass-steagle did, do you?

here's what it would have prevented since you seem particularly confused. it would have kept banks from playing with the savings side of their business. and since you clearly don't understand what caused the crash... that would have printed the rise of garbage asset backed securities.

i hope that helps. i'm afraid i can't help your inability to articulate without a spew of profanity.

But it would not have.

You say it would.... but there is no provision in Glass Steagall preventing that.

The only provisions in Glass Steagall separated Commercial, Retail, Investment and insurance.

Well.. most of the banks that failed... didn't do that.

Bear Stearns.... just an investment bank. There is nothing in Glass Steagall that would have affected Bear Stearns in any way.

Nor Lehman, Wachovia, Indymac, AIG and thousands of others.

Saying "this is what it's supposed to do", and rectifying that with reality, is not the same. There is no evidence that Glass Steagall would have prevented anything.

And again, if keeping "banks from playing with the savings side of their business" is so important to economic stability.... then why hasn't the rest of the world ever needed Glass Steagall?

So you can claim that without Glass Steagall it's the end of the world, but it's funny how the crash started in the US, and not throughout the rest of the world which has never, and still does not, have any such restrictions.

THE ONLY provision you say???????That was exactly the purpose. To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena.

Jesus you are dense.

To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena

You know where banks lost money?

In staid, old fashioned, safe, secure MORTGAGE lending.

 

[thereisnospoon]

Should the Glass Steagall Act be brought back?

Specifically, this...............

The Glass-Steagall Act Explained

2. Separation of Commercial and Investment Banking

As important as the FDIC’s creation was, the term Glass-Steagall usually refers to the set of rules that kept a savings-and-loan type bank from engaging in speculative, risky training with customers’ deposits. If a bank took deposits, it could not trade in anything other than government bonds; if it underwrote securities or engaged in market-making, it could not take deposits.

The motivation for this separation rested on alleged conflicts of interest. Glass and Steagall, as well as others, accused banks of partnering with affiliates which later sold securities to repay banks’ debts, or accepted loans from banks to buy securities. They also worried that banks engaged in risk-taking speculation, rather than investing in corporations to promote growth.

Five provisions of the Banking Act pertained to this separation:

Section 19: Federally chartered banks could not buy or sell securities, unless they were investment securities, government bonds or trades made on behalf of a customer.
Section 5(c): Glass-Steagall would also apply to state-chartered banks.
Section 20: Banks could not be affiliated with firms whose primary purpose was trading securities.
Section 21: If a bank did trade securities, it could not take deposits.
Section 32: Officers and directors of commercial banks (banks part of the Federal Reserve System) were barred from holding advisory positions in companies whose primary purpose was trading securities.

Yes. I think the banking industry is out of control.
Large banks are much too large. Large banks control far too large in amounts of assets and accounts.
Today, large banks are no longer financial institutions. They are more or less large corporate conglomerates. Citi employs over 400,000 people. That's just one example.
Large banks are so unfriendly to consumers. If one of them makes an error, the customer is told "tough shit. It's your problem.".

 

[TrainTime]

Lehman Brothers was an investment bank. It did not do Commercial. It did not do Retail. It did not do insurance.

No amount of Glass Steagall would have done ANYTHING to Lehman Brothers either way.

There you go again! Lehman (who bilked ME out of $130K) isn't the issue here. It's Chase, BofA, and Wells Fargo (to a lesser extent) who got into the derivatives game after GS was repealed. They had no idea they'd end up like they did.....pawning off crap mortgages all over the world. To this day, you better do one HELL of a title search before you buy a distressed property because nobody knows who really owns a lot of them....you can be in for a BIG SURPRISE down the road when you get a letter stating the property you bought didn't belong to the party who sold it to you.

For the Economically challenged, like myself, would it have been possible for Chase, BofA, and Wells to engage in the derivatives game to the extent they did if GS had not been repealed?

Nope, not in the packaging of low and high-risk mortgages that the buyers never really looked through. What needs to be understood is these derivatives were actually DUMPS of the CRA crap paper the bankers had. They had to write the loans or be accused of "redlining" against minorities. Which is why it was Maxine Waters screaming "RACISM" who kept the Bush inspectors at bay while her husband was on the board of either Freddie or Fanny, don't remember which.

Dubya had his hands full with Iraq while GREENSPAN continued assuring everybody who'd listen to his gibberish that the "market" would weed out the grifters. Uh huh, sure thing... I lost my investment with Lehman and Bear Stears....I knew going in the returns they promised were too good to be true but I went along.... I cut my teeth in card games with Detroit Italians who didn't take IOUs and between gunfights in the RVN with cats who were not promised a tomorrow....you paid up at the table or got your ass in a blender. So I knew I was gambling and was more pissed at myself than anybody but my broker....who I hunted for 3 years...he'd disappeared or I would have disappeared him.

What I lost to the commercial banks shenanigans was MY BUSINESS. Couldn't find enough customers to keep it going thanks to them shutting down. They'd only lend to outfits who could have gotten by without it. Not to the small business guy or homeowner with perfect credit who needed a second mortgage to get through the crash. They simply abandoned us who made them GIANTS...and on top of that, Chase STOLE a $5,500 checking account from me...cleaned it out and then told the County Attorney's Office and then the FBI that the information on my account was "proprietary" and none of their business. So I burned them for $4,900 on a Visa card they'd issued me. The way I see it, they're still ahead of me by $600 and my former 770 credit score.

 

[Contumacious]

First, it’s true that Frank was hardly Fannie and Freddie’s biggest critic. Nor did he spot the housing bubble. Back in 2003, as the Examiner’s Philip Klein points out, Frank said that the government-sponsored entities were not in any sort of crisis. “]

Look pal. this is not a Repugnant vs Dumbocrats issue. They are both incompetent fools.

And because Fannie and Freddy were created by the fascist state then - you guessed it - they were exempt from futher regulation.

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[zeke]

But it would not have.

You say it would.... but there is no provision in Glass Steagall preventing that.

The only provisions in Glass Steagall separated Commercial, Retail, Investment and insurance.

Well.. most of the banks that failed... didn't do that.

Bear Stearns.... just an investment bank. There is nothing in Glass Steagall that would have affected Bear Stearns in any way.

Nor Lehman, Wachovia, Indymac, AIG and thousands of others.

Saying "this is what it's supposed to do", and rectifying that with reality, is not the same. There is no evidence that Glass Steagall would have prevented anything.

And again, if keeping "banks from playing with the savings side of their business" is so important to economic stability.... then why hasn't the rest of the world ever needed Glass Steagall?

So you can claim that without Glass Steagall it's the end of the world, but it's funny how the crash started in the US, and not throughout the rest of the world which has never, and still does not, have any such restrictions.

THE ONLY provision you say???????That was exactly the purpose. To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena.

Jesus you are dense.

To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena

You know where banks lost money?

In staid, old fashioned, safe, secure MORTGAGE lending.

Todd, you think that making NINA (No Income No Asset) loans represents "staid, old fashioned, safe, secure mortgage lending?"

How about combo (first and seconds combined) loans with an LTV of 110%? How about plain ole 100% finance with a 600 credit score? Em good loans there eh?

You don't know safe secure mortgage lending. But junk loans never fit that description and junk loans were the reason for the collapse.

BTW. Most banks didn't lose money on mortgage lending. Most if not all small local banks or even larger regional banks had better management and more lending sense than to get involved in the casino that mortgage lending became for the big boys. They actually continued to have borrowers making their payments. Because they had made good, sound, safe mortgage lending decisions. Called prudent underwriting in the trade.

 

[Contumacious]

They actually continued to have borrowers making their payments. Because they had made good, sound, safe mortgage lending decisions. Called prudent underwriting in the trade.

WUT?

That has been against the law since the Carter administration.

"banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as "subprime" loans."

.

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[Dad2three]

But it would not have.

You say it would.... but there is no provision in Glass Steagall preventing that.

The only provisions in Glass Steagall separated Commercial, Retail, Investment and insurance.

Well.. most of the banks that failed... didn't do that.

Bear Stearns.... just an investment bank. There is nothing in Glass Steagall that would have affected Bear Stearns in any way.

Nor Lehman, Wachovia, Indymac, AIG and thousands of others.

Saying "this is what it's supposed to do", and rectifying that with reality, is not the same. There is no evidence that Glass Steagall would have prevented anything.

And again, if keeping "banks from playing with the savings side of their business" is so important to economic stability.... then why hasn't the rest of the world ever needed Glass Steagall?

So you can claim that without Glass Steagall it's the end of the world, but it's funny how the crash started in the US, and not throughout the rest of the world which has never, and still does not, have any such restrictions.

THE ONLY provision you say???????That was exactly the purpose. To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena.

Jesus you are dense.

To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena

You know where banks lost money?

In staid, old fashioned, safe, secure MORTGAGE lending.

Well, except they dropped underwriting standards because they could bundle and off load the risk, mainly to insurance comp's and pension funds, instead of holding the loans as they traditionally did

 

[Contumacious]

THE ONLY provision you say???????That was exactly the purpose. To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena.

Jesus you are dense.

To keep the risky side of INVESTING AWAY from the staid, old fashioned, safe, secure MORTGAGE lending arena

You know where banks lost money?

In staid, old fashioned, safe, secure MORTGAGE lending.

Well, except they dropped underwriting standards because they could bundle and off load the risk, mainly to insurance comp's and pension funds, instead of holding the loans as they traditionally did

"Banks have been placed in a Catch 22 situation by the CRA:

If they comply, they know they will have to suffer from more loan defaults.

If they don’t comply, they face financial penalties and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars.

Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.

.