Wow. I thought the crash in October 1929 brought the market down to the low levels that signalled the great depression. So I was surprised to learn that after a large rebound in the DOW it was really the declines of 1930 that brought the DOW down into the depression era numbers. Look at the 1920’s rise of the DOW and fall to about 250 after the crash of October 1929: Graphs Source is Dow Jones Indexes
Now comes the scary part. Post crash DOW of about 199 was about FIVE TIMES the DOW lows seen during the great depression with a DOW at 41 (yes, that would be forty-one) in 1932.
OF COURSE you can overgeneralize from the depression data. Today billions of shares trade in a market far greater than at that time, the global economy is totally different, etc, etc.
However what really concerns me is the fact that the drops we’ve seen of some 40% from DOW highs of the late 1990s look more like the 1929 prelude to a depression than I’d been thinking. Are we in for just the modest rebound we’ve seen from the market lows of a few years ago and then a long slide into economic despair? Is this even knowable?
Warren Buffett, in an excellent interview on Charlie Rose a few days ago, seemed to think that the bailout / rescue plan will avert a catastrophe, but he was clearly thinking there was at least some trouble ahead bailout or not.
Joe Duck 
Obviously based on how the market reacted this afternoon to the news of the bail-out. If Wall-Street actually thought this bail-out was going to make a difference we would be way up.
Wait until Obama passes $1 trillion in new spending…those charts from the 30’s will look desirable…
We need to send someone to the moon…like yesterday!
One aspect of macroecon. that many arm-chair Keynesians fail to address concerns the relation of investment and speculation to the “real economy” of jobs, production, housing, etc. Conservatives believe boomtown or bullish markets are “good” for the public at large but can rarely prove that: even in the 20s, prior to the big crash of ’29 life was not that good, especially for farmers, workers. F Many bankers and industrial barons were living it up of course (FS Fitzgerald describes the scene pretty well).
The liberals and marxists assume that bullish stock and commodity markets tend towards recession (and there does seem to be some evidence of that, at least in terms of rising prices, and unemployment), which may or may not become a full depression. That may be as unwarranted as the conservatives’ assumptions, but as even these charts show–with the crash on Hoover’s shift–there exists at least some evidence to support the idea that bullish stock/commodities is not necessarily a sign of economic health at large. That said, modern Demopublicans seem a bit more Hooverian than FDRish (not that we should worship the ueber-statist FDR–it was FDR’s team anyway, and not just FDR): Billy Clinton sort of started the bipartisan corruption when signing off on GrammGingrich’s plans.
The point? Macroeconomics is at best sort of statistical anthropology. Various trends may be noted, but there are no reliable indicators, though the market does tend to drift upwards, and recession starts, and market busts–or so it seems. War generally leads to bullish markets, even obscene profits (another leftist talking point, as in oil prices) .
Samuelson does not seem optimistic:
http://www.newsweek.com/id/162138?from=rss?nav=slate
The markets failure to rally today did not leave me with the warm fuzzies, but I’m not going to read too much into it just yet. The market hates uncertainty and there are a lot of elements of the legislation passed today that remain unanswered – how and when the will buy back, at what price, what terms, etc.
The biggest mistake was the fed’s picking and choosing who to save and who to let go.
Letting Lehman Brothers go but saving AIG, etc has created a lot of uncertainly in the markets.
Just another prime example of how our wonderful government solves problems…
Macroeconomics is at best sort of statistical anthropology
Very nicely put, Horatiox!
Paul and Glenn OK and I agree uncertainty is the big challenge to the markets now, but just let us know BEFORE we need to pry the economy from our cold, dead hands.
(6) – Joe, not sure what you are saying / asking.
While there is certainly pork in the package (is anyone truly surprised at this), the wheels of media misinformation continue to spin. Case in point – the arrow brew-ha. An article in our local paper today tells a much different story than is being painted in the national press:
http://www.oregonlive.com/news/index.ssf/2008/10/an_oregon_arrow_maker_suffers.html
Also, Joe, looks like the package secured an extension on the O&C money that will give Southern Oregon communities a bit more time to wean themselves off that former very important source of revenue.
The media paints it as all bad but when I read the exceptions/add-ons, several of them seem quite positive for businesses and employment. I’m not saying there isn’t bad in the bill, just that sweeping generalizations often win the day, to the detriment of the facts.
Paul the point is…
This bill was to bail-out the immediate problem and remove the growing credit crunch.
None of this other items regardless of whether they are good or not had no business being in this bill.
When America needed our elected officials to do the right thing they failed miserably on ALL levels.
1) The passed bill does not solve the problem
2) It is the single most expensive bill ever passed
3) It is loaded with pork and earmarks
The market showed its response on Friday and I think we will see a continued downward slide of the market.
They have created the biggest blunder by inserting even more uncertainty and also abdicating accountability they have sent a clear message of arrogance and screw you taxpayer.
This bill will go down as the biggest mistake of the last 100 years and good ole George Bush led the charge.
This attitude of hey we got something good for our good ole local boys really has to stop in America. This is the exact idea that continues to breed corruption and bad spending.
You hear people spin about the pork…well you can’t expect there not to be pork in it, all the pigs were at the trough, etc… IT IS ABSURD – we should demand as taxpayers this practice should be banned.
Think about it…this is a form of currency to buy votes within our congress – doesn’t that bother anyone? If we the people did this type of stuff in business we would be in jail – and that is the point it should be illegal.
We need term limits.
We need to force every house member and senator to take a definitive vote on ALL issues so we have a clear record of what they are doing.
Every single expenditure needs to stand on its own – I know it is a lot of stuff we but we need to fix the approval process so that it is streamlined but fully lined with accountability.
Your points #2 & #3 are indisputable, I was simply making a point about the fact that things that the media has pointed out as being wasteful and/or wrong, i.e. the arrow story, are not necessarily so evil on closer scrutiny.
The problem with term limits is you indiscriminately fell the good wood along with the bad and it doesn’t necessarily address the problem to the same degree as meaningful campaign finance reform would.
As to #1 – it is very premature to make that judgement. I don’t know, you don’t know, know one knows at this point how this will play out. It is your opinion it will fail, not a fact. I remember well equally draconian forecasts about Resolution Trust Corp., forecasts that proved well off the mark.
The complaints about pork get really tiresome. There is no other way to accomplish ANYTHING. That’s why we do it, and that is why America has accomplished far more than most.
There was a bill that had no pork. It was defeated on Monday.
The RTC took control of around 540 billion in significantly devalued assets – mostly residential and commercial real estate. They were charged with disposing of it very quickly. They basically held fire sales. The 540 billion was whittled down to 124 billion because many of the assets were sold at prices above what the government paid for them. Had the RTC done its work with more patience, it easily could have turned the 124 billion-dollar loss into a significant profit for the taxpayer. Nevertheless, the RTC was a success. A financial catastrophe just as big as the one we are staring down, was averted. Most Americans do not even remember it, and have no idea that it saved their bacon.
And yet, this idiotic notion that government cannot do anything to help persists.
This will be a more harrowing maze to negotiate because of the pooling. My only question is how they are going to control the builders. The taxpayer should get to sell their one million-plus homes before this criminal class is allowed to pour another foundation.
(11) RE – RTC, I could not agree more.
Paul but I was a support of RTC. The problems RTC faced are not anywhere the scale of the problem going on here.
The other big difference is the amount of uncertainty the Fed now has thrown into this game…who gets saved…who goes the way of the dodo.
The auto industry is next…watch what happens in the next 6 months. This probably makes the S&L of the 80’s look like the corner store going out of business.
I understand there is good with the bad with people in our congress and in the pork – however the fact that we do not have a check and balance in place to weed out the bad pork and the bad politicians means we really need to get serious about changes that will clean house (no pun intended).
Maybe we have term limits for a period of time. Maybe we make it start now…how about a publicly support forum where ALL the votes and pork is explained in general terms in a non-partisan manner so we can all have a better understanding of what is really going on? How about campaign finance reform that is real? Take a close look at the way Obama manages his campaign contributions and you will get a very clear picture of how he will try to influence financial management at an executive level – if any CEO or CFO in the country ran biz the way he runs his campaign finances he would be in jail.
http://toledoblade.com/apps/pbcs.dll/article?AID=%2F20081004%2FCOLUMNIST14%2F810040346%2F-1%2FCOLUMNIST
Maybe the government needs to pass a law that states all networks need to provide a non-partisan portion of programming every week – I hate the idea but the MSM has gone so far overboard to play politics this election cycle even going back to the primaries…something needs to be done.
We need to make some very difficult choices in the near future on spending, taxes, etc and the choices are certainly not going to please everyone but the wrong choices will certainly tank our country. It really didn’t take much for the Russian empire to collapse and look at the pain and suffering those people have endured since. It is only the arrogance within America that doesn’t truly appreciate how things can change here.
JCH – anyone with $700,000,000,000 would be able to fix more problems in this country and economy then the government ever will be able to.
It isn’t fair to say that people don’t think the government can help. The majority of people (we live in a democracy) believe the government will most likely squander more than they should.
Additionally the taxpayer understands that their is plenty of blame to go around regardless of party so why would we hand over $700,000,000,000 to the same people that were a major reason we are here.
Let’s face the facts…first we had to bail out Fannie and Freddie and that was supposed to stop the bleeding, then AIG, same story…now instead of $300 billion already spent plugging the dike for two organizations we somehow think $700 billion is going to save the thousands of other companies facing jeopardy now. It is mathematically impossible to see how this plan is going to work.
What does the American taxpayer get? A $700,000,000,000 hail mary pass with 10 seconds left filled with over $200,000,000,000 in unrelated expenses and charges.
None of it makes sense and we still are not doing anything to address the real reasons we are here.
Corrupt politicians, corrupt businessmen and greedy Americans.
JCH – I would suggest that giving $700,000,000,000 to Warren Buffet to help fix things would have gone a lot farther than the people that currently going to be the custodians for it.
BTW…where do you think we are going to get the $700,000,000,000? We have to borrow it from foreign banks.
So let’s go through this brilliant logic especially after e have done such a great job becoming dependent on foreign oil.
We borrow money from foreign banks in countries that probably don’t like us so much.
We then loan that money to our banks to fix their problems from their irresponsible lending practices forced upon them and approved by our government.
Then the corrupt banks some day when all is great again pays the USA back with interest so we can pay back the foreign banks with interest.
Paul my comment above was just a dumb joke alluding to a Charleston Heston quote about guns and the fact things could get very bad, but nobody seems able to predict even a month into the future.
Warren Buffett would have zero interest in that. He supports the bail out.
We are buying bad assets and taking them off their books. Later we hope to sell them at appreciated prices. It’s simply a different version of the RTC. Been done and it worked.
On the auto industry, I think they should pay Honda to take over Ford, and pay KIA to take over General Motors.
This was not forced upon the lenders. In 2004 the investment banks requested a change in their capital requirements, the lifting of a regulation, and the Bush administration gave it to them. The theory was that institutions like Lehman Brothers and Bear Stearns were big boys who would never make loans that endangered them.
Big old wrongo on that one, but they asked for it.
It created a huge abundance of capital that aggressively accelerated mortgage lending. At the urging of the Bush administration, they went out and made around 700 billion in ill-advised and reckless loans. It was an urging, not a forcing. They did it for Bush and his ownership society. You basically had mostly Republican CEOs carrying the political water for their President. It was 2004. These men thought they were invincible. They thought Greenspam controlled the economy like the conductor of an orchestra. They were philosophically dedicated to creating a 100-year reign for the Neocons. The assurance of that was the shattering of the Democrat stranglehold on the minority/poor voting block. What they expected to say in the 2007 election cycle:
The kept you in a ghetto apartment forever; we gave you a great economy and a house in the burbs.
But they wuz a little drunk on power and it blew up in their faces.
The rise and fall of our housing market and how did it happen?
This is a very high level overview of the pertinent facts. Please excuse my typos and grammatical liberties.
Ok we have heard a lot of talk back and forth on what caused the problems that led to the economic meltdown this year. We have heard that it is both party’s fault and that the Democrats share the blame equally with others. Additionally people want you to believe that Glass-Steagal is the main cause here.
What I am going to try to do is provide the core facts of this scenario all the way back to 1938 when Fannie was created.
Before we start with the creation of Fannie Mae a couple of points need to be made.
MBS’s are at the center of the problems with the sub-prime market. Mortgage backed securities have been created to combine risky loans into tranches which then as a bundle are sold as an investment instrument to various financial institutions.
It should be noted from a historic standpoint that between Civil War and WWII in this country there were six failures of mortgage security schemes within this country. Economists of all shapes and sizes if they just reviewed history and learned from it would have known we would have problems with this. MBS’s as a financial instrument alone are not the cause – they need an enabler.
The enabler for this meltdown is Fannie/Freddie and several Democrats hell bent on protecting this scheme for their political gain.
After reviewing the facts you can decide on who is at fault and to what degree.
1938 Roosevelt (D) created the New Deal which Fannie Mae was created to provide an opportunity of credit in a financial market where the “housing” market didn’t exist.
NOTE: Many Great Depression Historians based on review of the cause and effects now conclude with some level of certainty that the “New Deal” only prolonged the most serious effects of the Great Depression.
A lot of people have forgotten that the DOW did not return to its pre-Great Depression levels until 1954 – think about that – if that were today it would mean we wouldn’t be above 10,000 until 2035.
1968 Johnson (D) along with a Democratic controlled congress created one of the largest expansions of government called the “Great Society” which included spinning off Fannie Mae as a quasi-private organization. Even though it was now to be considered private it was always understood that the government would back it – translation: Fannie could take higher risks than any other private company because of the government backing.
1970 Nixon (R) Freddie Mac was created to compete with Fannie Mae
1977 Carter (D) created the CRA (Community Reinvestment Act) which provided for strong oversight. Well that oversight was to force banks to extend credit to low income people regardless of risk.
During the 80’s and 90’s Fannie and Freddie continued to grow but a very interesting event occurred which was the beginning of the launch of bad people that Fannie and Freddie would hold.
A Thrift in Illinois wanted to merge with another bank. ACORN through legal means challenged the merger on the basis that the Thrift was not providing easy enough access for low income based loans. The Thrift countered in the lawsuit that it wasn’t prudent business practice and the loans would jeopardize the bank. ACORN prevailed through the courts to force banks in Illinois to allow these low income loans to be made available regardless of how reckless it was in support of CRA.
You can only guess who was the attorney in Chicago who worked directly with ACORN to make this happen.
DING DING DING you guessed it – Barack Obama (D) himself.
This was actually a landmark victory for CRA because it literally opened up every Thrift in the country to legal trouble if it didn’t adopt the reckless provisions of CRA. Sub-prime lending was born and one its parents is Obama.
During the 1990’s Clinton (D) really blew the support for CRA wide open and lowered the bar even more for more reckless loan giving. During the last few months of his administration they literally mandated Fannie and Freddie were to increase the mix of high risk and reckless loans to the level of 50%. Yep that’s right – 50% of their loans had to be crap.
Two of the biggest defenders for Freddie and Fannie for many years have been Frank (D) and Schumer (D).
4/2001 Bush (R) during the budget request for the following year raised the first alarm about Freddie and Fannie that there was potential trouble there. Dot.com has just busted and then 9/11 all eyes unfortunately were elsewhere.
During 2002 WSJ Editorial page started writing stories warning of the impending disaster of Freddie and Fannie. Each time the editorial staff attempted to interview the key people either in Freddie or Fannie or close organizations like CountryWide they were told to butt out and in some cases were threatened. One of editorials even stated that Freddie and Fannie was going to be our next Enron.
2003 Bush (R) called for significant oversight on Freddie and Fannie. John Snow even made a speech directly on the floor calling for strengthening of the oversight of GSE’s particularly Freddie and Fannie. Barney Frank (D) led the charge to kill any oversight on Freddie and Fannie and using his now becoming famous lines – nothing is wrong with Freddie and Fannie.
2004 Freddie and Fannie were caught cooking their books which mean they were making things look a lot rosier than they really were which in turn allowed picaroons like Reins (strong D supporter) the ability to pocket 10’s of millions of dollars in bonuses.
2/2004 Greenspan even called for oversight of Freddie and Fannie.
4/2005 Schumer (D) took major steps to block any new oversight on Freddie and Fannie – once again stating everything is great in the housing market – why does anyone want to legislate something that is working so well?
4/2005 Bush (R) pushed for more oversight on Freddie and Fannie – you can see the famous YouTube clips now of all the Democrats (D) blowing off ALL calls for any oversight of Freddie and Fannie.
The Senate Banking committee answered the call of President Bush (R) to adopt much stronger legislation which many view in hindsight that if this legislation had passed on the Senate floor it would have stopped the meltdown of this year.
The Senate Banking committee voted on party lines to adopt the legislations ALL Democrats (D) on the committee voted against the new legislation and all Republicans (R) on the committee voted for it.
When it went to the Senate floor the Democrats (D) successfully blocked a vote on it. – The legislation died.
2006 Another Republican bill co-sponsored by McCain (R) hit the floor with McCain specifically warning all members that Freddie and Fannie posed a significant threat to our financial markets and ultimately the taxpayer. He clearly warned them of the impending disaster.
The Democratic (D) controlled killed the legislation. The bill voted down party lines. Democrats (D) against, Republican (R) for.
By the time 2008 came around Freddie and Fannie held over $4 trillion dollars worth of mortgage paper.
In July 2008 Barney Frank (D) told everyone that Freddie and Fannie were fine and going forward everything was going to be great.
Then we had our meltdown. I think it should be noted that the first bail-out bill had over $20 billion earmarked for far left organizations and that is the primary reason that Republicans couldn’t stomach it. The bill failed the house by 12 votes. If the Democrats really wanted to pass it they had the majority to do it. It should be noted that 12 Democrat (D) members of Barney Frank’s banking committee voted against the bill. Even at our darkest hours Barney’s boys were still in denial.
All you have to do is look at the facts and it is pretty clear who bears the majority of responsibility here. (CLUE: Democrats!!!) It is also clear that Republicans are not getting enough credit for trying to fix this time and time again.
According to economists and business school professors Freddie and Fannie and the lack of oversight on their reckless practices is the primary cause for our financial meltdown.
Anyone who tries to tell you Freddie and Fannie were NOT the major cause are not being honest with you. Any politician that is telling you that Freddie and Fannie were NOT a major cause is not dealing with reality.
All we need to do is review history and we can stop these things from happening. Remember Roosevelt (D) raised taxes during the Great Depression and unemployment was at 25%.
One thing is for sure – we CANNOT under any circumstance raise taxes and we CANNOT increase government spending or we will see the Greatest Depression on our shores – and it took WWII for us to start to crawl out of the last one. We are doomed to repeat history unless we get honest and use straight talk with each other.
If you want to look at the entire picture it seems to be clear to me that our meltdown is really a result of almost 100 years of bad government socialistic tendencies and programs which the Democrats seems to want to continue to shove down our throats.
One thing is for sure WE CANNOT LEGISLATE RECOVERY!
Three good videos on YouTube to watch.
When I read posts like the one for JCH that have broad sweeping statements that just don’t match up to the facts.
The points in my last post are the facts. It is kind of hard to ignore who is to blame here.
Granted I will give the Democrats that they probably wanted to really try to help people get into homes however when the rest of the world was screaming – Fannie and Freddie are broken they did conspired to keep it from being exposed and shut down.
Now look at what we have and even with the bail-out, Frank and friends still didn’t want to change a thing.
I heard a phrase that might just apply to this:
DEMRON
Let’s fact it if we want accountability back in Washington we need to start cleaning house. Any Republican that was complacent or voted against any Fannie and Freddie should resign as well.
This is going to cause major damage to the Democratic congress but they deserve to be called out for this. People want to say that I am just out for the Democrats – hey I didn’t put them up to this. What they did is so outrageous and quite frankly if Frank, etc were Republicans I would be saying the same thing.
Time for change in Washington all right.
(18) Warren Buffet said the amount required for the bail-out was too big for the private industry to tackle.
You can’t say what Warren Buffet would do if our Government said to Warren – would you please be the steward for our country for this $700,000,000,000.
In fact I would be surprised is Buffet isn’t included somehow with Paulson’s plans.
To suggest those mergers for the auto industry doesn’t really make any sense.
Nobody even noticed $25 billion going to the auto manufacturers over the weekend…I can remember the $1.5 billion+ bailout of Chrysler was a big deal under Carter – boy times have changed and so has the amount of the check!
The suggested mergers were a joke (KIA taking over GM!), though I think Ford shareholders would do back flips if Honda took over Ford.
Here is a data point. Frank became the chairman of his finance committee on january 31, 2007. So that’s 11 months in 2007 and 9 months in 2008.
in the first three months of 2007, only the last two happened while he was chairman, there were an astonishing 516,000 new foreclosures – the majority of which were mortgages that originated after January 1, 2004.
Aren’t you slightly curious about what happened in 2004?
Prior to january 31, 2007, who ran that committee? Who held the majority in the house and senate. Who held the White House? To which party are most CEOs closely aligned?
And why do you find it so hard to look at precisely what those men did in those roles?
List the names and we will take them one at a time. Just like I did. Spend some time and lets go over the data points.
In ALL cases where reform was suggested for Fannie and Freddie and additional oversight the Democrats in lock step shut it down every time.
You just want to try to spin the game in another direction because you don’t want to admit the Democratic party is now completely corrupt.
The credit market is in turmoil and everyone agrees with that but no one dares to touch the market credibility crisis that Congress now has.
(23) – You going to need a very, very long list of paper. As I have been ascertaining all along, this article details the major players and issues that have contributed to the malaise and, as I have stated several times, there is plenty of blame for both parties, as well as some blame that is totally apolitical.
http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html
Much as you want to pin it all on one party, the truth is quite the opposite. If Americans really believed that, the polls would not be swinging the way they are.
(25) Your referenced article at factcheck squarely place more blame on the democrats than the republicans and the main point is people like Barney Frank and crew conspired to protect their little corrupt Fannie and Freddie.
People want to spin this up into such a big problem that we can’t possibly figure out what went wrong.
We know Freddie and Fannie went wrong, they cooked their books and they did with the help of Barney Frank and crew. Chris Dodd and others got preferential treatment through Countrywide, etc.
We just need to follow the money trail and see where it goes. There is no doubt that Freddie and Fannie were a major contributor to the actual meltdown. 10 people fire bullets at a target and the last bullet hits the target – the 9 previous shooters don’t get any credit for the hit.
Why does everyone want to protect Barney Frank? Do you actually believe he did nothing wrong?
Oh yeah…I keep asking that but no one wants to answer direct questions – they might actually have to admit that their sacred holders of the left wing agenda are actually corrupt and no different than any other corrupt politician from any other party.
The real shame here if these politicians really believed in their cause and put service above self and their country first then they wouldn’t be corrupt. But since they are corrupt they hide behind a veil of doing good but only do the things that give them personal gain.
(25) Numerous posters keep pointing out, as I have, that you keep overlooking an extremely relevant fact: for 6 of the last 8 years, Republicans have controlled both houses of Congress. To ignore this fact and maintain that it is all the Democrats fault defies reason. As Factcheck pointed out:
But saying that Democrats killed the 2005 bill “while Mr. Obama was notably silent” oversimplifies things considerably. The bill made it out of committee in the Senate but was never brought up for consideration. At that time, Republicans had a majority in the Senate and controlled the agenda. Democrats never got the chance to vote against it or to mount a filibuster to block it.
I’m not going to belabor the point further. The record is clear and non-partisan experts share my view – that there is plenty of blame on both sides of the aisle and that some of the contributions to the problem are apolitical.
That you could read that Factcheck piece and come away concluding it blames it more on the Democrats, to me, is ample evidence of a very distinct and overwhelming bias.
It’s concluding statement sums it up well:
“Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.”
Who ever said it was a single piece of legislation?
It was a conspired effort by Frank, Dodd, Schumer, Reins, Johnson, Gorelick, and of course the infamous Mozilo.
It went on for many many years. Even Barney Frank’s life partner is a key executive in this whole mess.
Let me guess Paul what was your position on Enron?
This level of corruption with the dollar amount involved is of course going to have huge ramifications on the system.
No one will concede the fact yet that the Democrats were up to their necks in this Fannie/Freddie/Countrywide fiasco.
As far as Obama…I think his legal activist work with ACORN in Illinois really hurt our reasonable lending process in this country. Obama actually bears a fair amount of responsibility for the landmark decision that basically forced all Thrifts in this country to abandon common sense and let anyone have a mortgage.
The point is Paul even though I have no problem blaming corrupt politicians regardless of party you can’t seem to blame specific Democrats for anything.
Do you give Ayers a pass on his terrorist activities because he was against the Vietnam war?
When you read the CNN article on Ayers today it amazes me how they couch Ayes activities as war protest activities and he was labeled a terrorist by the FBI…
Well, just for starts, in 2005 a F&F reform died in the Senate.
I believe that Senate had 55 Republicans. The chairman of the finance committee was a Republican. The Republicans had the tiebreaker in Cheney. It never got out of the Republican-led committee
Exactly how did the Democrats obstruct that bill?
At the same time a similar bill processed through the house, which also had a significant Republican majority – 232 to 201. The house passed that bill with a 330 to 90 vote.
Again, how did Democrats in the house stop that? By having almost half their members vote for it? That’s an odd approach to obstruction.
(29) Sigh…
Don’t let the facts get in your way…
http://thomas.loc.gov/cgi-bin/bdquery/z?d109:SN00190:@@@L&summ2=m&
Here is the bill you refer to. It was co-sponsored by McCain and sent to the banking committee and reported with an amendment in the nature of a substitute favorably.
For those that don’t know what “an amendment in the nature of a substitute favorably” mean…you read the exhaustive discussion about it here.
http://www.govtrack.us/blog/2008/09/18/what-does-ordered-to-be-reported-with-an-amendment-in-the-nature-of-a-substitute-favorably-mean/
In layman’s terms it mean the bill never made it out of committee…it was killed within the committee. Gee I wonder who could have done that?
Schumer and Dodd killed it. Interestingly enough while this bill was being proposed Dodd was getting his preferred loans from Countrywide.
Thanks for playing please try again.
Let’s research the facts please and get it right.
(29) an interesting tidbit to keep in mind…at no time when oversight or reform was proposed for Fannie and Freddie not one Democrat ever supported it.
(29) at least Rep Artur Davis D-ALA admits the problem.
If you want to truly understand one of the key elements that has made the existing crisis so bad, watch the piece that aired tonight on 60 Minutes on “Credit Default Swaps”. Once again the geniuses on Wall Street have sold us down the river and blown themselves up in the process. It is an excellent piece on a complex topic.
Newsweek also did a very good write-up on this last week:
http://www.newsweek.com/id/161199
…but the 60 Minutes piece conveys it in ways the article does not.
The 60 Minutes piece was interesting, but they fail to even begin to pierce the motive. It’s simplified as greed, and it was not greed. It was power. If only it had been greed. And it was not just our friends on Wall Street; it was also their friends in the WHite House and the congress, and among the President’s department secretaries and their associated yes men.
As far as I know a Senate committee chair can call for a committee vote, as long as there are enough committee members present by the rules, pretty much at will. If the majority of the members vote to report, it gets reported.
So to suggest two minority members could stop the committee chairman and his majority from reporting a bill they liked out of committee seems suspect. The chairman’s fingerprints are all over any bill that dies in committee.
That senators of both parties had problems with the bill is not unlikely. The American Enterprise Institute trashed the house version.
(34) – While money and power go hand-in-hand, I truly think this was more about simple greed. Investment bankers utilized derivatives and credit default swaps in order to significantly amplify the gains they made on MBS, thereby guaranteeing themselves larger bonuses on top of their already egregiously high salaries.
Subprime, in and of itself, could not have brought down all the entities that have failed thus far. It is the leverage and derivatives that have severely amplified the impact of non-performing mortgages. Like portfolio insurance in 1987, Wall Street thought they had found a way to mitigate risk while amping up returns, but never truly understood the tools they were using.
I think a lot of information we’ll have as this shakes out will help assign blame, and I think most people agree that a lot of heads should roll over this.
Glenn you are focusing a lot on the failure of the Dems to allow stronger oversight of Fannie and Freddie but it is not yet clear how much of the trouble has come from loans to high risk people vs the high risk derivatives. My currrent understanding is that the high exposures that froze the markets came from the derivatives which somehow magnified rather than lowered the risks as they were supposed to. I’d like to hear a lot more from the physicists and math guys who created those “weapons of financial mass destruction” as Buffett called them.
Tonight’s 60 Minutes piece was really interesting and supported Ben Stein’s suggestions that the Credit Default Swaps are the key problem, Jim Grant also suggested that top banking execs who brought all the derivatives into play without understanding them acted reprehensibly / criminally.
All I want is Demron investigated and those that violated our trust and the law should be brought to justice.
It is amazing to me that none of you will admit Barney Frank is a corrupt politician…lol
Pelosi and crew have done a great job since they began running things…yeah right.
She promised the most honest and open congress this country has ever had. We got the opposite. She must have just watched Spongebob and realized it was opposite day when she spoke.
History will prove that the housing scandal in the Democratic party specifically Fannie and Freddie played the largest role in causing this meltdown.
60 minutes have never been biased…there hard hitting interview with Obama really drives on the point – NOT ONE DIFFICULT QUESTION ASKED.
Seriously do you think 60 minutes is going to be honest about this situation.
I love Biden’s response in part 2 when asked that Obama and Biden had differences.
JCH you need to learn how committees work in Washington.
Both the Senate and House bill were sponsored and co-sponsored by Republicans and NOT 1 Democrat supported reform.
Do you believe Freddie and Fannie should have been reformed? (that question goes to you to Paul)
Do you think at that time people like Dodd and Frank knew that Freddie and Fannie needed to be reformed?
Why won’t you answer the questions specifically and honestly?
You listen to the testimony of the regulators and at that point they knew they had cooked their books – just like Enron and yet they didn’t want to reform…
You guys want to try to deflect the issue instead of honestly answering YES Barney Frank is a corrupt politician along with Chris Dodd and YES they took every step they could to stop legislation that would have certainly benefited the American taxpayer.
(33) Paul seriously Newsweek???
The same magazine that said Palin is just one of the common folk and is just too stupid to be VP. She is a Governor and is certainly not stupid.
Newsweek is a disgrace – they support and push elitism and class warfare.
Maybe you should try to read more print that is middle of the road.
I wonder how many people realize that the pensions of our politicians are guaranteed. What they should do if calculate out the average loss in the pensions of taxpaying workers in this country and they should deduct that amount from all past and present politicians and that money should be paid back to the taxpayers.
For some reason since a politician wants to help the poor or support the gay community or support minorities having to be fiscally responsible just goes out the window. It’s ok…they were trying to help people its ok that they made a bad decision and it is costing the taxpayers 100’s of billions of dollars – don’t worry the taxpayer will understand.
No one can explain the logic of Obama and ACORN and the thought that every minority in America should be given a mortgage regardless of risk. The famous NINJA loans.
No income, No job and No assets.
This is an example of Obama’s judgement – he thought this was a good idea and he thought lets use the legal system to force financially sound banks to do unsound transactions?
Bill Clinton thought it was a good idea to force Freddie and Fannie to force a ratio of 50% of risky loans into their portfolios.
There is no economist or financial expert that is being honest would have say that those were good ideas.
It reminds me of the “projects” – I have been to the very first project in this country in New Haven, CT. This was another great idea to help the poor that completely backfired.
When are we all going to learn that you can’t bend the sound rules of being fiscally responsible EVER. People need to be given the opportunity to stand up on their own and EARN their place and property.
The world markets have dropped sharply overnight.
Our market is very close to dropping below 10,000. 10,000 is a major line of resistance. If we break 10,000 then it could potentially free fall to a much lower level.
So far the bail-out is NOT working.
If the market closes today below 10,000 we could see a major downward shift of the market over the next several months where we see the DOW around 6,000. We would be quickly moving from a recession to a depression.
This week is going to be key on the market trend.
Paul and JCH…this should be required reading for you and it is from the Village Voice.
http://www.villagevoice.com/2008-03-11/news/why-i-am-no-longer-a-brain-dead-liberal/
Paul back to when you mentioned pork and how it was positive for a few Oregon projects…
Do you know in just over 940 days in congress Obama has amassed over 930 million in pork requests?
In over 7000 days in congress (21 years) McCain has NEVER asked for 1 penny in pork.
Arizona certainly hasn’t been hurt by McCain not wanting to waste taxpayer dollars.
Obama cost: almost $1 million dollars a day in wasteful pork. At Obama’s rate in 21 years Obama would single handily waste over $6,925,531,914…man that sounds like great change!
McCain cost: $0 over 21 years.
(37) – If you can point out to me, specifically, where the piece on Credit Default Swaps was politically biased I would just love to hear where and how. They interviewed many people, none of whom had a political agenda. James Grant is a very highly respected observer of the financial world and the publisher of Grant’s Interest Rate Observer and has written for Barron’s, The Wall Street Journal and Forbes – not exactly bastions of liberalism.
(39) – I mentioned the Newsweek piece because it is a comprehensible explanation of a complex and complicated topic. Again, I challenge you to point out to me where, in that article, you find political bias? That article repeats concerns and viewpoints that have appeared in Barron’s, The Wall Street Journal, Forbes and other financial publications. Once again, these are not publications that are not exactly bastions of the “liberal elite” you so loath.
Typo in (45) above: “these publications are not exactly bastions of the”…
Here is another excellent piece on CDS from Fortune.
http://money.cnn.com/2008/09/30/magazines/fortune/varchaver_derivatives_short.fortune/index.htm
You ok with Fortune or is it problematic too? I bet I can find something on CDS’s at Fox, but I candidly don’t usually go there for objective news on Finance or anything else for that matter. I find the Wall Street Journal to be a much better, more in-depth resource, and it has never been accused of a liberal bias, quite the contrary.
You still won’t answer the questions about Barney Frank?
I think going on a witch hunt after a single person in a crisis that has so many different and varied causes utterly misses the point and is partisanship at its worst. If the voters in Massachusetts see fit to do something that is their business.
Paul this is of national consequence. He can keep his elected office until he is convicted as far as I am concerned. But he should step down from the national committee he chairs.
You still can’t admit it and you now call it a witch hunt…
But so goes the liberal left…ostriches when everything points to them…
What law did Frank break? He’s allowed to take money. He’s accounted for it.
Please explain how two Democrats, who were in the minority, were able to stop the Republicans from passing reforms. What is the mechanism?
You know so much about Senate committees – explain.
JCH you are about the only person in America that doesn’t think Barney Frank didn’t do anything wrong?
Amazing how the left wants to give a pass to this Freddie and Fannie debacle and how you just want to ignore the repeated video coverage of Barney Frank, Maxine Waters, etc denying anything was wrong with Freddie and Fannie. Now I know Frank likes to give preferential treatment to Fannie but come on you are just spinning this way out in left field.
The regulators made the case with the numbers and Frank and crew attacked them for it. And look where it got us.
Funny how you guys want to try to shift it to Deregulation (which Clinton put through)…let’s compare the two:
Deregulation – we are going to make it easier so you can get creative with the ever-changing economy and we are going to let business diversify so you can become stronger and more competitive on a global basis. Oh yeah if you are an unethical business man or dishonest you will probably be able to take advantage of this.
Clinton passed dereg.
compared to:
CRA,Freddie/Fannie: we are going to force you through law to make risky insane mortgages to people who have no chance in hell in being able to pay them back. In fact we think it is such a good idea we are going to FORCE through law that Fannie and Freddie adopt a ratio of 50% of worthless paper.
Carter dreamed this up and Clinton made it happen.
So there you go. Go ahead and blame deregulation if you want and give a pass to CRA,Freddie and Fannie either case the Democrats are responsible for making both law.
The Democrats are responsible period.
When people realized it was all wrong the Democrats did everything in their power to stop any reform – the RECORD is 100% clear on this.
This is going to be Demron and the truth will and is coming out.
Barney Frank is only the tip of the iceberg – follow the money trail and investigate all involved.
I can’t figure out what drives you guys more to defend this…
either that the Dems and Obama have their fingerprints all over this failed legislation and ultimate meltdown or that you can’t pin any of this on McCain.
How come it seems McCain keeps coming out on the right side of all these problems our country keeps having and Obama is either present or doing the wrong thing?
who cares about mcain and obama because i dont
Austin that is what is great about America…you can have that position just like I have mine and JCH, Paul, etc all have theirs.
i was just kidding everybody should care about the elections/ i think that obama will get what do yall think?
(51) “The Democrats are responsible period.” – if only it were that simple.
The world is neither black nor white but full of shades of gray.
All this hand wringing.
What law did Frank break? Without one, you are a lynch mob. And dude, I do not care what most Americans think; I care about connecting actual dots to the dots to which they are actually connected. I do not think you share my ferocity in that regard.
Explain how two Senators in the minority were able to thwart the reforms you seem convinced the Republicans wanted.
What is the mechanism they two senators used to prevent the Republican chairman and his Republican committee majority from sending that bill out for the Republican majority in the Senate to pass and send on for signature by a Republican President?
And Dude…why would you think I would so arrogant to even begin what laws Frank has broken? I said he needs to be investigated and follow the money trail and investigate all that are involved regardless of party.
You guys want to give Frank a pass, you want to assume he hasn’t done anything wrong…how could he? He is liberal, gay and we need him in congress.
Give me a break. Investigate, get to the bottom and prosecute every crook involved.
We have seen corruption before and it is obvious that their is corruption here and Frank clearly has a conflict of interest as well – it needs to be investigated and we need to clear our all corrupt politicians.
JCH,
When Enron happened did you think crimes were committed?
Did you think Republicans were involved?
Did you want investigations?
The similarities with Enron and now Demron are startling.
If the investigations are honest many heads will roll.
Here is a small list to start with…
http://theforumblog.wordpress.com/tag/barney-frank/
Gee there doesn’t look like anything shady was going on here?
Franklin Raines and Jim Johnson are patriots they should be given medals and we certainly want them advising our President.
Seriously JCH, Paul how can you both believe that their isn’t a huge amount of corruption with this Democrat crowd.
I wish they were Republicans so we could be talking about substance with each other but for some reason since they represent the most liberal left we need to protect them it is the new form of racism that is brewing in this country…
Because you’ve come up with nothing of substance.
It just hand wring, scatter shooting, and cherry picking.
So again, how did two Democratic senators in the minority half of the finance committee prevent the Republican chairman and his Republican majority from sending a reform bill out of their committee so a Republican majority in the Senate could pass it and send it on for a Republican President’s signature into law.
Just a simple question.
(59) You keep bring up Enron – the one relevevant relationship between Enron and this crisis is that in both cases there was a catalyst for both meltdowns – insatiable, voracious greed.
JCH – so let me get this straight.
Your defense is since it was buried in committee it somehow absolves Frank and crew from accountability with the biggest financial debacle ever to befall this country.
Click to access HowToKillABill.pdf
That should help you see how easy it is to kill a bill in committee regardless of who controls the committee.
(51) “The Democrats are responsible period”
From the Fortune article sited earlier on Credit Default Swaps:
There is at least one key difference between casino gambling and CDS trading: Gambling has strict government regulation. The federal government has long shied away from any oversight of CDS. The CFTC floated the idea of taking an oversight role in the late ’90s, only to find itself opposed by Federal Reserve chairman Alan Greenspan and others. Then, in 2000, Congress, with the support of Greenspan and Treasury Secretary Lawrence Summers, passed a bill prohibiting all federal and most state regulation of CDS and other derivatives. In a press release at the time, co-sponsor Senator Phil Gramm – most recently in the news when he stepped down as John McCain’s campaign co-chair this summer after calling people who talk about a recession “whiners” – crowed that the new law “protects financial institutions from over-regulation … and it guarantees that the United States will maintain its global dominance of financial markets.” (The authors of the legislation were so bent on warding off regulation that they had the bill specify that it would “supersede and preempt the application of any state or local law that prohibits gaming …”) Not everyone was as sanguine as Gramm. In 2003 Warren Buffett famously called derivatives “financial weapons of mass destruction.”
Yeah, right, it’s all the Democrats fault.
Any failure as complex as this one has multiple moving parts and there are contributors from both sides of the aisle. I don’t absolve Democrats, nor do I absolve Republicans, nor the SEC, the Treasury, Bernanke, Greenspan, the bankers, the brokers, Wall Street, the Bush administration, the Clinton administration nor the American public for naively buying into the belief that real estate values can escalate indefinitely and are therefore safe to borrow against.
There isn’t a single smoking gun.
There are multiple, intertwined causes.
Even my most conservative Republican friends concede this.
It’s not my only defense, it’s just the first card I’m going to pull out of your house of cards.
You said I needed to learn how Senate committees work. You’ve used insult and bluster and hand wringing. I’m waiting to be schooled on committees.
(65) Everyone out there agrees the housing fiasco is the primary cause for this entire mess. Everyone agrees that Fannie and Freddie were the biggest enablers. Everyone agrees it was Democratic legislation that created this mess.
If you want to say Wall-Street saw an opportunity and created insane instruments to maximize a return for investors – fine.
If you want to blame the agencies for not properly rating these risks – fine.
But the fact of the matter is – these loans did not get re-paid, proper lending principles were thrown out the window, no income, no job, no assets – NO PROBLEM we will give you what you want. These loans were only made possible by horrible Democratic legislation.
You just can’t admit that their socialist program failed and was the main catalysts to the biggest financial failure in the history of this country.
(66) Read the ways committee members can stall, introduce alternatives, etc…there are many paths that a bill can die in committee.
I wasn’t in the room to see exactly what happened but I have seen Schumer make the statement that he thought the bill was ridiculous and it went nowhere in the committee.
Additionally if the Democrats wanted any oversight or reform at all they could have introduced an alternative – which they didn’t.
What more can I tell you? Republicans over and over again over a period of 6 years pushed to have reform and oversight brought into Fannie and Freddie and 100% of the Democrats across the board either voted against it, filibustered it or killed it in committees.
JCH you are the only one out there arguing that the Democrats didn’t try to defeat the reform and oversight.
It is getting silly. Sooner or later you will have to admit it.
Actually, I disagree with Paul. You can mismanage anything, and you can manage most things. The mortgage system is more than capable of handling CRA loans. properly managed, it can absorb foreclosures forever. Prices fluctuate. The mortgage system can handle all of that.
If it is properly managed.
It was woefully mismanaged by the Bush administration and its minions And the reason that Buffett is hanging out with Obama is he knows it’s true.
(69)…lol
Buffet is hanging out with Obama because he knows it will increase his power and allow him even more access. I don’t think Buffet and Soros will get along so well.
Freddie and Fannie were protected by Barney Frank and crew…
The news today from BOA somewhat expected is very disturbing.
We are going to see significant changes and consolidation within the industry.
The market is not going to be up tomorrow. I would expect to hear more bad news tomorrow.
I still think the remaining issue with the Paulson plan is that is a gamble – what are the odds of them hitting the right marks with a few hundred billion?
More hand waving, no answer.
Just more totally unsubstantiated claims.
How does a minority party shield an entity from a majority party reform effort?
Answer – the majority party never really wanted it reformed in the first place.
(72) JCH that is a complete mis-representation. I would agree if the bill were out of committee.
It is very easy for minority members to kill a bill.
Good bills get killed that way all day long.
If you don’t want to look at that then how come Frank’s boyfriend was a key executive in Fannie Mae? Isn’t that a conflict of interest?
What about Chris Dodd and his multiple mortgages he got?
There is a huge list of people here.
I have news for your JCH the investigations have already begun and hopefully they will get to the bottom of it – accountability is key for their credibility. If they did nothing wrong they should welcome it.
IMO Dodd will actually get charged with crimes out of this.
I have no idea how bad Frank’s behavior was.
It’s is not “easy” for minority members to kill a bill.
Lots of bills die in committee, but I can think of no possible scenario that would allow for that when the chairman and his majority want them to report out. if they all vote together, it’s out.
“Me and Shumer are using our Monopoly set’s ‘we get three extra votes’ card.”
But I don’t know as much about Senate committees as you and I need schooling.
On Frank, one thing the media has actually obstructed, Frank took control of the finance committee on January 31, 2007. His committee processed a Ginnie and Freddie reform bill that had full approval of the White House and the Secretary of the Treasury in a mere four calendar months – something that the Republican-led committees of both houses had been able to accomplish in the entire first 6 years of GWB’s Presidency – ultimately because they were all beholding to a wide array of money interests who had paid for their obstructionist votes – majority votes. Those are the ones you buy if you really want to get your way.
One killed one of the bills because it provided for rental properties for the poor, and they wanted to build each of those poor families a house – because they made a whole bunch more money that way, and the Ownership Society doctrine approved only of ownership.
Well now we know Frank is hiding something…
http://www.breitbart.com/article.php?id=D93LAKT01&show_article=1
Despicable…
The very program that was so dear to him he actually helped ruin many of their lives. The man is a disgrace.
No Mr. Chairman the anger we are appealing to is all the irresponsibility and greed that was fecundated by miscreant apparatchiks like yourself.
Resign from your chair and show true leadership and remorse.
Your aim is so far off it’s ridiculous.
He did not mismanage it. He’s a congressman. It was mismanaged by people who have the authority of management.
If the bill had been passed the way he wanted it, many of those people would have gone to rental units, and their lives would not be ruined.
The Republicans were opposed to that. They wanted each and every one of those people to get a mortgage, and they did.
(77) JCH you seem to forget that Barney Frank in July got up and told the country that Fannie and Freddie were going to be just fine and shortly thereafter they crashed and burned.
He knew how bad it was and he knew they had a serious chance of falling apart but he tried to paint a picture that something was different just like he has for years before – since he got away with it so many time he figured he could get away with it again.
He chaired the committee that was supposed to understand what was going on and was supposed to things to keep this from happening – he failed in his responsibility not only to keep things sound but he failed in leadership when he didn’t have the courage to admit what was wrong and do something about it.
Pelosi said the accounting was so complex that he couldn’t possibly have known it was so bad – BS
Then during the bail-out Pelosi stated Barney Frank is so smart and understands this so well that she was sure he was going to come up with a great way to handle this.
Barney Frank’s original response to the bail-out: $760,000,000 funneled to ACORN.
And yet you continue to defend Frank as shown time and time again at best he is completely incompetent or at worst he conspired in criminal activity (cooked books) to protect the lynch pin that caused the worst financial crisis in American history.
No, I don’t forget what he said. What I realize is it is not a hanging offense. A congressman is not an investment analyst. Anybody who thinks that deserves to lose natural selection contest.
I’m defending Barnet Frank form the lynch-mob mentality, which throws all sorts of one-side accusations into the air in the hopes of overwhelming the public with the false notion that an investigation and trial has taken place.
Barney Frank has not been investigated. The accusations have not passed the evidence test – any evidence test. What is being said is astonishingly one-sided, and in many cases, is obviously false.
You can’t name a law he has violated. You are obviously angry at him. So what? Bill O’lielly is angry with him. So what?
Everywhere you go you hear people say that these investments are difficult to understand. Guess what, I know CPAs, auditors at Enron, who insist they had no idea how bad things actually were. They were inside the building looking at accounting records and writing parts of the financial statements, for years in a row.
So Pelosi says it and she’s wrong. You are irrational.
(80) I never said Frank was investigated…I said he will be investigated and some are already being investigated.
History will prove me right and will prove your willingness to look the other way because someone is far left is what is irrational here.
Evade evade.
Name the law.
Explain your mystery committee procedure.
Refute that the Republicans blocked their own party and President on passing a Ginnie and Freddie reform. My gawd, they were the only people who could.
Refute that within 4 months of becoming chairman, that Frank’s committee sent out a reform bill that was overwhelming approved by the full house, and that satisfied the President. It was a reform bill he had worked tirelessly to pass for more than a decade, and the President liked it. The vast majority of the Republicans in the house liked it.
JCH – 17 times the Republicans tried to reform GSE’s – Freddie and Fannie.
17 times the Democrats blocked the reform.
You want to confuse the issue with one situation involving John McCain’s co-sponsored bill where it is clear that Dodd, Schumer, etc have said publicly they killed the bill in committee – yet you magically think I know what procedure they used to kill it…
The irony of Frank is that when they finally did do something in 2007 most of Barney’s cabal voted against the reform even then.
Of course Frank had to do something he had worked with his cohorts to block it 17 times before.
Seriously JCH you want to deflect and try defend this – the reason you know EXACTLY how damaging this is going to be to the party you are so desperately trying to protect.
JCH
PRESIDENT BILL CLINTON: “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”
JCH It’s not that complicated.
McCain called for stronger oversight of Fannie and Freddie in 2005, but Senate Democrats (including Obama) blocked reform.
Between 2005 and 2007, Fannie and Freddie bought up a trillion dollars worth of subprime mortgages. Some they kept, some they packaged and sold to Wall Street.
Fannie and Freddie enabled and spread the contagion that melted our financial system, while the Democrats enabled Fannie and Freddie over John McCain’s objections.
You really need to read more JCH…
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aSKSoiNbnQY0
JCH – There is some really good info here:
http://www.aei.org/publications/pubID.22514/pub_detail.asp
JCH – You must have missed this one:
http://online.wsj.com/article/SB122212948811465427.html
JCH and here is a definition of what Barney Frank’s committee does:
House Financial Services Committee
The United States House Committee on Financial Services (or House Banking Committee) oversees the entire financial services industry, including the securities, insurance, banking, and housing industries. The Committee also oversees the work of the Federal Reserve, the United States Department of the Treasury, the U.S. Securities and Exchange Commission, and other financial services regulators.
Did the House Financial Services Committee do their job?
They didn’t – Barney Frank must go – he failed miserably and possibly conspired to thwart reform that would have enabled his committee to do their job – PROTECT THE AMERICAN TAXPAYER.
Laughable. The info you cite is one-sided garbage.
How on earth can a minority stop a majority? You refuse to answer the question. I will help you. Only defections from the majority can stop the majority.
That is why it died in committee. Because Republicans defected.
Why didn’t they stop the Patriot Act? You don’t even have to go look. Answer: either no defections, not enough defections, or nullifying defections from the minority.
That’s how it works. The garbage you are citing totally ignores how it works, and settles for blaming, oh my gosh what a shock, the liberals.
JCH – Republicans within the committee votes for the reform 100%.
Republicans never defected on any vote at any time for reform of Freddie and Fannie.
Democrats 100% of the time voted and/or blocked any reform for Freddie and Fannie.
You are talking utter nonsense. Schumer and Dodd both said they killed it in committee – stop trying to mislead people.
So let’s try another route…let’s use the congressional record:
Dodd – (D) Conn
Schumer – (D) NY
Menendez – (D) NJ
Reed (D) RI
These are the senators in the committee that amended bill:s109-190. Once the bill was put in for amendment it was passed to the next congress for vote – guess who took control of congress by the time this came up for vote – it was never even introduced for vote in 2006 so it was cleared off.
In case you want to review the actual words via c-span of the Democrats involved you can watch it here:
And for people that really want to know how a minority member of a committee stonewalls or blocks a bill for committee vote – all they need to do is submit it for amendment and it is moved off the vote. That is exactly what Dodd and Schumer did with s190.
Don’t forget Katrina hit that year as well.
It was up to the Democrats who controlled the congress in 2006 to bring this back up and specifically it was Dodd who should have brought it up to to vote in committee.
Here is the full amended version of the bill.
Click to access s190_amd3.pdf
And now with Frank raising the race card for any attack on this issue is a disgrace to our country.
How come the left always makes race an issue? They seem to be far more racist than any other political party in this country.
And you have Senator Byrd…need I say anymore…geesh.
I can only imagine what CNN, Time, NBC, ABC, MSNBC, JCH etc would be saying if Freddie and Fannie was a Republican program.
Think about it – Freddie and Fannie are most definitely the main lynch pin of our economic meltdown and anyone that wants to spin it elsewhere are not being honest with themselves nor are they being honest with you. If we don’t fix this problem within our congress we are doomed to repeat it.
BTW…the housing meltdown has now happened 7 times in our country’s history since the Civil War and every time is was because the government did very similar things
Do you want your children to go through this?
A minority can’t kill a bill in committee if 100% of the majority votes for it.
100% opposition, and yet, when they took control of the committees, the house rapidly passed a bill the President liked. It took the Senate a little longer, but the President got what he wanted and he signed it.
What do you think the National Association of Home Builders thought about those bills? How about the various realtor groups? They had billions of dollars on the line. I think they were screaming at their Republican sluts to let it die in committee. Which, oddly, is what happened.
And if you need convincing…I am going to post this link again – Joe thanks for letting me being repetitive you need to hear the questions, answers being given in their own words in testimony over the Freddie and Fannie issue.
If you actually take the time to hear their own words it becomes obviously clear what is going on here.
Think about what we know now and does anyone think that the Democrats actually believed what they were saying. How is it the regulators and republicans had all the right questions and concerns and yet EVERY single Democrat didn’t believe any of the concerns nor did they even think it was fair to ask the questions.
Seriously this is a serious injustice to the American taxpayers and it rests squarely on the Democrats shoulders.
(94) JCH all you need to do is forward a bill for amendment and then there is time needed for the amendment and it needs to be brought back into committee for vote.
By the time the amendment was completed and filed…congress adjourned.
The 2006 congress was responsible for bringing this bill back into committee approving and putting it up for a floor vote.
That didn’t happen. Dodd had the power to kill it by delay and he did and he had the power to do the right thing and bring it back for vote and he didn’t.
This is ALL on the Democrats back. PERIOD.
(94) JCH why do you keep diverting to other issues…you pushed your question and by me spending a lot of time actually digging through the congressional record I found the answer.
Now you don’t like the answer you want to divert.
JCH since you introduced irrational to the discussion.
Think about the reasoning of the Democratic party in regard to reform of Freddie and Fannie.
Regulators predicting the exact scenario which unfold at great taxpayers expenses and people like Maxine Waters stating Franklin Raines is just so great,etc…
After we all learned about the corruption by Raines and the cooking of the books at Freddie and Fannie…
Still Democrats DID nothing. Where was the outrage?
The reason…any attack on CRA has a racial undertone according to the far left so we have to protect it at all costs it is just too important.
That I would submit is irrational thinking and decision making and goes right to the core of problems we have with our elected officials – too many of them in both parties are just too irrational for taxpayer good.
PRESIDENT BILL CLINTON: “I think the responsibility that the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.”
What a laugh. Clinton cut the de-reg deals with Gramm/ Gingrich and GOP, and those deals led to fewer “standards” in regards to all lending/mortgage rackets, INCLUDING the FHLMC and FanMae (FredMac actually a private corp. for the most part, which Nixon signed into effect). Yes, the demo stalled on the issue, but the GOP could have done something–they had majority in congress until 2004—and didn’t. Blame the Demopublicans.
(98) Why do you want to put the blame of the bad judgment of the Democrats on the Republicans?
The line…well they had the majority and they could have forced through legislation if they really wanted to…
as compared to:
the Democrats blocked and/or voted against any reform of Freddie and Fannie 100% of the time. At least Republican absolutely so the problem and tried to do something about it and the Democrats did everything in their power to stop it.
There is no comparison.
You can evaluate this a couple of ways:
Either the Democrats were conspiring to protect their liberal program regardless of cost to the American taxpayer or the Democrats just don’t understand the economy and our financial systems.
It is probably a little of both.
2008 Demron
“As recently as September of last year, [Obama] said that subprime loans had been, quote, ‘a good idea.’ Well, Senator Obama, that ‘good idea’ has now plunged this country into the worst financial crisis since the Great Depression,” McCain said.
The drop in the DOW is really where we are going now…we will most likely see 6,000 before the end of the year.
The housing market will not tank completely for several more months at a minimum.
We better hope that Paulson and his super heroes from Goldman make the right bets – and they are betting because they have no idea on how any of this is going to turn out. If they get it wrong it could mean we will be in for decades of DOW performance well below the 10,000 mark.
Not to be even more depressing but these drops in the markets also historically correlate with major global conflicts include global war. Every day this is going to get worse and worse.
I still think it would have been better to let it all collapse more quickly then to try to delay yes the pain would have been greater but we would have been healing much much faster.
Without a doubt things like universal healthcare, tax increases and increases in spending our completely out the window. It would be complete insanity to try anything with huge tax increase or spending now and for the foreseeable future.
Buckle down America we have a very tough road ahead but we are the strongest nation in the world because of our diversity and tolerance and we need to fall back to the core roots that make us great, come together and help each other climb back out of this dark abyss.
The NASDAQ numbers are frightening…
We need to watch the DVOL on the markets over the next week or two to really see how bad this is really going to be.
We need to seriously look at some major tax changes to turn this around. There is between $12-16 trillion US taxpayer dollars sitting in offshore accounts in tax shelters.
Time to suspend capital gains tax, corporate taxes, etc to get this money back here and to get companies expanding here in the US because of the recovery opportunity.
What did George Bush and the White House have to say about proposed reforms in 2005:
The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers. …
Just another hint on why reform never passed, and a hint on who was really pushing for increased minority home ownership.
101 ways to be against something and for it all at the same time.
(104) JCH you just don’t give up.
I was thinking about why I am so pissed off at Barney Frank and it really comes down to Frank Raines’s testimoney when the regulators, congress were all discussing Fannie and Freddie.
To listen to Raines say: These assets are so risk less that the capital for holding them should be under 2%.
When you hear that they had to know he was a con artist.
Anyone with basic real estate knowledge understands that is a crock of chit. The major problem with the housing bubble is that the valuation and price of the mortgage was mostly based on the “value” of the improvement “the building” and not the value of the land. It is a fact that the dirt is what appreciates and never the improvement and in fact the improvement is forced to depreciate.
So what we ended up is these huge homes built on very small parcels of land and they played a supply and demand game to artificially inflate the value of the homes. Even though our supply was way out in front of the demand – they conveniently worked to keep that out in front with MBS bundles.
Anyone involved in this should have known this and it is my belief that they did and they decided to line their pockets and let the train just run away.
It was just inexcusable for Barney Frank to participate in enabling this to happen. This has nothing to do with what other people could have done this is ALL about what the Democrats SHOULD have done.
Here you go JCH explain this one?
A voodoo priestess told police a commissioner trying to get even with a political rival wrote the priestess bad checks.
George Ann Mills, a high priestess in Blythewood, S.C., told Cobb County Police that Cobb Commissioner Annette Kesting wrote her $3,000 in bad checks.
A police report says the commissioner wanted commissioner-elect Woody Thompson to “catch cancer” to “have a car accident.”
Kesting paid Mills a $2,000 check for the ritual on Aug. 27 and postdated a $1,000 check for Sept. 11. Both checks bounced. The report said Kesting paid cash to make up for the first bounced check.
Kesting defeated Thompson, a two-term Republican incumbent in the 2004 general election to become Cobb County’s first black commissioner.
The Georgia Bureau of Investigation is investigating.
via AP
It’s right there. The President was demanding that Freddie and Ginnie make riskier loans. It started on the day one of his administration.
You are too chicken to look at why.
(107)…LOL
Seriously…I can play your game.
Two years ago the Democrats screamed we needed change and they took over the Senate and House.
Are you better off today than you were two years ago?
Deficit has skyrocket from the 8 trillion ballpark to 11 trillion in just two short years.
They are completely out of control.
Now take Obama’s plan…add another trillion just for good measure.
Where are we going to get it?
Oh yeah…he is going to raise literally every single tax we have in this country…that means less jobs.
JCH the world we live in today is vastly different than the world when Obama started promising all of this stuff.
But hey don’t worry Pelosi, Dodd and Frank will keep doing the bang up job and in 4 years based on their current rate of spending they will raise the deficit at least $12 trillion more dollars and at the same time unemployment will raise into significant two digit values.
You think the last three weeks have been bad give them another four years and during the next election will have to get on a predesignated ACORN voter bus to take you to the polls. You will have to decide before you get on the bus…the bus for Obama will take you to the promised land the challenger’s bus…well you can figure out how it would be in the Obama/Radical/ACORN voting world.
I thought it was horrible to see voter fraud in developing and fledgling democracy’s but to see what is going on here in our great country is really kooky.
Your ability to figure out who is at fault is amazingly inaccurate.
The Republicans run the voter fraud scam every year, and it never amounts to anything.
“Oh my gawd, they’re registering dead black radical necrophiliacs! Hide the frigid Republican women.”
CLAIM: Democrats engaged in fraudulent activities in South Dakota during the 2002 election that led to Democrat Tim Johnson’s win.
FACT: South Dakota’s Republican attorney general dismissed the allegations, called affidavits supporting Republican charges “flat false.”
And so it ended, long after the criminals who attempted to steal the election via manufactured false claims left the state.
(110) Currently 14 states are investigating ACORN. Nevada state officials raided ACORN offices today.
Difference with your position and mine – ACORN representatives have been found guilty of voter fraud and have gone to jail.
This month before the election they will expose a major misuse of taxpayer dollars that ACORN has received and has been funneled to them by — guess who — Dodd and Frank.
Total dollar amount: over $700,000,000
for everything else there is VISA
well unless your an illegal then Dodd and Frank, etc say you don’t need one.
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