To the editor:
Financial regulators were warned by the FBI in September 2004 that rampant fraud in the mortgage industry could cause multibillion-dollar losses to financial institutions. Regulators ignored the warning with the result being the Great Recession. Now, the governor of the Bank of England has cautioned that the world is possibly facing the worst economic crisis in history.
Congress must pass strong regulations that will prevent future financial misconduct by Wall Street bankers and speculators. Unfortunately, this is not likely to happen because of the influence of political campaign contributions by corporations and billionaires.
Getting rid of the influence of large contributions, big money bundlers and contributions by lobbyists is possible. However, true campaign finance reform will require a broad-based mass movement demanding a law similar to the Fair Elections Now Act (S. 750, H.R. 1404). Under this bill, candidates would raise a large number of small contributions (limited to $100) from their communities in order to quality for Fair Elections matching funds. Until there is real campaign finance reform, Main Street and ordinary Americans will continue to be hurt by Wall Street.
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RonHolzwarth (Ron Holzwarth) says…
"Financial regulators were warned by the FBI in September 2004 that rampant fraud in the mortgage industry,,,"
Yeah, yeah, yeah. We heard the same thing about Bernie Madoff.
By the way, I have a great investment for you,,,, it's sort of a "secret", so don't tell anyone, but it pays 24% interest, and if you find anyone else that's interested, you'll get a bonus of 5% of whatever they invest. Give me a call.
And quit your fear mongering. That could ruin our investments!
srj (anonymous) says…
That is one thing Obama does not get credit for. We strengthened the banks by raising capital requirements. We are now at around 13-1 cash/debt ratio, compared to the 40-1 that got us in trouble. For example Germany is at 30-1.
Of course this means less loans to spend our way out of a recession, but in the very long run we will be better for it.
jafs (anonymous) replies…
Your post is hard to understand.
Obama and his administration are responsible for tightening those requirements, among other ones as well.
And, your numbers appear to be off - a 40-1 cash/debt ratio is better than a 13-1 cash/debt ratio, but you present them as the opposite. And Germany is the country doing the best in Europe right now, with a reasonable $30-1 ratio (I haven't checked that number).
If you have $40 of cash reserves for every dollar you lend, you're in a much better position than if you have $13 cash reserves for that dollar.
madameX (anonymous) replies…
I think it's the other way around: they have to have $1 in cash for every $13 they lend as opposed to being require to have $1 in cash for every $40 they lend.
jafs (anonymous) replies…
That would make more sense, but then it should be called a 1-13 cash-debt ratio.
Or a 13-1 debt/cash ratio.
Right?
cato_the_elder (anonymous) says…
"Financial regulators were warned by the FBI in September 2004 that rampant fraud in the mortgage industry could cause multibillion-dollar losses to financial institutions."
Which is why Franklin Raines, Christopher Dodd, and Barney Frank should all be in jail right now.
snap_pop_no_crackle (anonymous) says…
Woof
Moderate (anonymous) says…
Why not just punish those who sell their office??? We know who gave money to whom. A simple rule to restrict voting on matters about which you have received substantial resources would not violate the constitution and would get to the heart of the matter. There is no bribe if you do not accept it. No matter what you do people will always try to buy power.
somedude20 (anonymous) says…
Well, if you are angry about banker's actions just marry one, move to Topeka and domestically abuse them since it is now legal
Liberty_One (anonymous) says…
The strongest regulations are economic regulations. Calling for more government regulations only insulates these firms further from the economic regulations of the market.
snap_pop_no_crackle (anonymous) says…
Waiting for a cool front to blow through.
merrill (anonymous) says…
Elizabeth Warren was also among those advising the Bush/Cheney admin which I speculate the Bush admin knew.
What is ironic similar a home loan fraud scheme also took place in the Reagan/Bush admin...hmmmmmm
This appears as though this a premeditated pattern which nets a group of people somewhere trillions of dollars. What exactly happened to this money? Where exactly did it go? Oddly many from the Reagan/Bush admin also were in the Bush/Cheney admin.
"Congress must pass strong regulations that will prevent future financial misconduct by Wall Street bankers and speculators." My guess is there are more than enough laws and regulations on the books. Nowhere will the american people find in writing " Hey ignore and turned a blind eye to fraudulent exercises".
Nowhere will the American people find in writing " Hey ignore rules of thumb about home loans and who cares if applicants can afford the homes. Loan the applicants the damn money
so we loan institutions,our friends in real estate and our friends in the home construction industry can all make a bundle before this scheme is discovered."
What good will more laws and regulations do considering....
"Fraud certainly was very important in the housing bubble of recent years. But the housing bubble—like bubbles generally—did not depend on fraud, and most of its development was there for everyone to see.
Also, Fed Chairman Alan Greenspan denied the housing bubble’s existence—not fraud exactly, but deception that kept the bubble going.
In addition, government regulatory agencies turned a blind eye to the highly risky practices of financial firms, practices that both encouraged the development of the bubble and made the impact all the worse when it burst.
And, yes, substantial fraud was involved. For example, mortgage companies and banks used deceit to get people to take on mortgages when there was no possibility that the borrowers would be able to meet the payments. Not only was this fraud, but this fraud depended on government authorities ignoring their regulatory responsibilities.
So, no, a bubble and a Ponzi scheme are not the same. But they have elements in common. Usually, however, the losers in a Ponzi scheme are simply the direct investors, the schemer’s marks. A bubble like the housing bubble can wreak havoc on all of us. "
Why elect RINO's ever again? BTW the repub party as such is dead!
http://www.dollarsandsense.org/archiv...
merrill (anonymous) says…
RINO's are posing as republicans. Pure and simple = another form of fraud.
Is fraud in the genes of RINO's? You decide...
Jeb Bush defaulted on a $4.56 million loan from Broward Federal Savings in Sunrise, Florida. After federal regulators closed the S&L, the office building that Jeb used the $4.56 million to finance was reappraised by the regulators at $500,000, which Bush and his partners paid. The taxpayers had to pay back the remaining 4 million plus dollars.
Neil Bush was the most widely targeted member of the Bush family by the press in the S&L scandal. Neil became director of Silverado Savings and Loan at the age of 30 in 1985. Three years later the institution was belly up at a cost of $1.6 billion to tax payers to bail out.
There are several ways in which the Bush family plays into the Savings and Loan scandal, which involves not only many members of the Bush family but also many other politicians that are still in office and were part of the Bush Jr. administration. Jeb Bush, George Bush Sr., and his son Neil Bush have all been implicated in the Savings and Loan Scandal, which cost American tax payers over $1.4 trillion dollars (note that this is about one quarter of our national debt).
http://rationalrevolution0.tripod.com...
snap_pop_no_crackle (anonymous) says…
Double RINO sighting! And merrill remembered how to do attribution, for the moment at least.