Why no "Banking Crisis" from 1935 to 1979

[Truthmatters]

SEC Votes for Final Rules Defining How Banks Can Be Securities Brokers
Eight Years After Passage of the Gramm-Leach-Bliley Act, Key Provisions Will Now Be Implemented
FOR IMMEDIATE RELEASE
2007-190
Washington, D.C., Sept. 19, 2007 - Ending eight years of stalled negotiations and impasse, the Commission today voted to adopt, jointly with the Board of Governors of the Federal Reserve System (Board), new rules that will finally implement the bank broker provisions of the Gramm-Leach-Bliley Act of 1999. The Board will consider these final rules at its Sept. 24, 2007 meeting. The Commission and the Board consulted with and sought the concurrence of the Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and Office of Thrift Supervision.

 

[Truthmatters]

Timing and Temporary Exemption
As adopted, Regulation R provides banks with a transitional exemption until the first day of their first fiscal year commencing after Sept. 30, 2008. This will give banks time to make any necessary changes in their systems and compliance programs and should ensure that banks have time to come into compliance with the Exchange Act provisions relating to the broker definition. This exemptive rule will become effective on the date that the Commission's current order expires, Sept. 28, 2007.




Bush annouced the economic crash just a couple of days before the Bank Broker rules FINNALLY went into effect

 

[Truthmatters]

They GAMED the law to give the banks a free broker ride for 8 or 9 long years.

Those were the very same years this mess was built in

 

[Bfgrn]

actually that is stupid beyond words and perfectly liberal!!

Fed Fanny Freddie CRA FHA FDIC are were 100% busy and huge regulators at the time of the housing collapse.

That anyone would ignore this is worse than pure Nazi propaganda and double think!!

Virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Totally wrong in the trillions column! As wrong as Krugman!

http://faculty.chicagobooth.edu/john.cochrane/research/Papers/krugman_response.htm

Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.

Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.

They all suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility. -Barry Ritholtz



Private sector loans, not Fannie or Freddie, triggered crisis

WASHINGTON — As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

• More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

• Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

• Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

Read more here: Private sector loans, not Fannie or Freddie, triggered crisis

 

[Oddball]

Virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Totally wrong in the trillions column! As wrong as Krugman!

http://faculty.chicagobooth.edu/john.cochrane/research/Papers/krugman_response.htm

Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.

Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.

They all suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility. -Barry Ritholtz



Private sector loans, not Fannie or Freddie, triggered crisis

WASHINGTON — As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

• More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

• Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

• Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

Read more here: Private sector loans, not Fannie or Freddie, triggered crisis

Yet another vapid blabbering point for the terminally stupid and easily led partisan hack....Little wonder you keep parroting it.

F&F didn't need to buy nonconforming mortgages, as they were operating in a marketplace where real estate prices had been inflated beyond any rationality by the existence of sub-prime.....They could have bought up every conforming mortgage on the planet and would still have been burned (just like they were) when the home value bubble burst.

That is why F&F are still one of the biggest moral hazards in existence today.

 

[Billo_Really]

he never was.

but the UBS people sure did snap him up after he crammed this crap down our throats when we mistakenly thought they would ACTUALLY impliment the RULE on bank Brokers that were the reason the left got on board with the Law.


Gramm is a con who conned this country.

Its why Bush CHEATED so hard in 2000 to win the election.

It was all part of the Rove plan for a permenant majority for the right

Glass-Steegal was passed into law as a result of the '29 crash. For over half a century, we had no major economic meltdowns. Then just a few short years after its repeal, bam!, another meltdown.

 

[Oddball]

he never was.

but the UBS people sure did snap him up after he crammed this crap down our throats when we mistakenly thought they would ACTUALLY impliment the RULE on bank Brokers that were the reason the left got on board with the Law.


Gramm is a con who conned this country.

Its why Bush CHEATED so hard in 2000 to win the election.

It was all part of the Rove plan for a permenant majority for the right

Glass-Steegal was passed into law as a result of the '29 crash. For over half a century, we had no major economic meltdowns. Then just a few short years after its repeal, bam!, another meltdown.

Correlation ≠ causation.

 

[Billo_Really]

Correlation ≠ causation.

In this case, it does.

 

[Oddball]

There will be fools in any market, fool.

The repeal of Glass-Stegal didn't cause home prices to be bid up beyond rational market levels.

 

[Billo_Really]

There will be fools in any market, fool.

The repeal of Glass-Stegal didn't cause home prices to be bid up beyond rational market levels.

But it's repeal, paved the way for all the "credit default swaps" that ballooned to 180 times the collective GNP of all the nations on the planet.

The housing bubble never got that big!

 

[Truthmatters]

he never was.

but the UBS people sure did snap him up after he crammed this crap down our throats when we mistakenly thought they would ACTUALLY impliment the RULE on bank Brokers that were the reason the left got on board with the Law.


Gramm is a con who conned this country.

Its why Bush CHEATED so hard in 2000 to win the election.

It was all part of the Rove plan for a permenant majority for the right

Glass-Steegal was passed into law as a result of the '29 crash. For over half a century, we had no major economic meltdowns. Then just a few short years after its repeal, bam!, another meltdown.

yes and the only way it could have happened is by NOT fully implimenting the Gramm leach bliely act of 1999.

The kepot the banks FREE of regulations on the very people who were writing these loans and selling the securities with which the banks horked off the mountains of bad debt that would have exploded on them if held.

They made money coming and going.

at the rest of the worlds expense

 

[Truthmatters]

There will be fools in any market, fool.

The repeal of Glass-Stegal didn't cause home prices to be bid up beyond rational market levels.

But it's repeal, paved the way for all the "credit default swaps" that ballooned to 180 times the collective GNP of all the nations on the planet.

The housing bubble never got that big!

the banks would have NEVER sold that much sub prime if they didnt have a way to dump it on someone else before it exploded

 

[Billo_Really]

the banks would have NEVER sold that much sub prime if they didnt have a way to dump it on someone else before it exploded

Once all those bets were called in, the banks were in a world of shit.

 

[Billo_Really]

yes and the only way it could have happened is by NOT fully implimenting the Gramm leach bliely act of 1999.

The kepot the banks FREE of regulations on the very people who were writing these loans and selling the securities with which the banks horked off the mountains of bad debt that would have exploded on them if held.

They made money coming and going.

at the rest of the worlds expense

We need to bring back Glass-Steegall; separate savings and investment banks once again; break up the "big banks" and make them "little banks", much like we did with the phone company.

And it wouldn't hurt if we started enforcing anti-trust laws again.

 

[Oddball]

There will be fools in any market, fool.

The repeal of Glass-Stegal didn't cause home prices to be bid up beyond rational market levels.

But it's repeal, paved the way for all the "credit default swaps" that ballooned to 180 times the collective GNP of all the nations on the planet.

The housing bubble never got that big!

But, but, but, but, but.....Credit default swaps didn't drive the housing value bubble, either.

And the housing value bubble was immense...Anyone who says it wasn't clearly isn't dealing in reality.

 

[Truthmatters]

yes and the only way it could have happened is by NOT fully implimenting the Gramm leach bliely act of 1999.

The kepot the banks FREE of regulations on the very people who were writing these loans and selling the securities with which the banks horked off the mountains of bad debt that would have exploded on them if held.

They made money coming and going.

at the rest of the worlds expense

We need to bring back Glass-Steegall; separate savings and investment banks once again; break up the "big banks" and make them "little banks", much like we did with the phone company.

And it wouldn't hurt if we started enforcing anti-trust laws again.

We need to go all Teddy on their asses.

man the republican party used to have sane people in it

 

[Truthmatters]

There will be fools in any market, fool.

The repeal of Glass-Stegal didn't cause home prices to be bid up beyond rational market levels.

But it's repeal, paved the way for all the "credit default swaps" that ballooned to 180 times the collective GNP of all the nations on the planet.

The housing bubble never got that big!

But, but, but, but, but.....Credit default swaps didn't drive the housing value bubble, either.

And the housing value bubble was immense...Anyone who says it wasn't clearly isn't dealing in reality.

and it was caused by thebanks gaming our system and getting the bank broker rules held back for the very same 8 years this mess was made in.


You just keep pretending you dont see my posts huh

 

[Oddball]

STFU, you blabbering bubblehead.

 

[Truthmatters]

the banks would have NEVER sold that much sub prime if they didnt have a way to dump it on someone else before it exploded

Once all those bets were called in, the banks were in a world of shit.

beause they could NO longer dump them in securities after the rules were in place.

That date was sept 30 2008.

Bush stood in front of the nations just a couple days before the rules on bank brokers went into effect and announced to most Americans surprize that the economy was going to crash.

what a cowinky dink huh?

 

[Truthmatters]

STFU, you blabbering bubblehead.

so you deny what the SEC release says is facts?