US Govt to file suit against big banks for mortgage securities fraud

[lektrode]

Re: US Govt to file suit against big banks for mortgage securities fraud

What's the point of suing the banks? Jailing the bank executives will be more satisfying.

+1
along with clawing back all the millions/billions they 'madoff' with too!

[lektrode]

Re: This Democratic leadership sure has gull.

well we do know that ole henry will say whatever he must to prove whatever point he's being paid to push:
http://www.forbes.com/2003/01/06/cx_da_0106topnews.html
and that raines, personally, doesnt _sound_ like a bad guy - and examined individually, none of the players in the game seems like bad people...
but it took a widescreen view of the entirety of what happened, such as what INSIDE JOB did, to begin to understand just how totally corrupt the whole system that wall st has built/perp'd - and operates in cahoots with the DC aristocracy - has gotten away with - mostly in the 2009-10 timeframe, even if it was a long time 'building', the real crime against the rest of us occured, IMHO during 09-10, when _something_ might've been done to stop it, what happened?
lets see: we got a heathcare bill nobody wanted, that benefits mostly the health insurance industry and the lawyers that feed off of it, the auto/municipal unions and the state buracracies got bailed out for a year, and we got 2200 new pages of financial regulations that only the banks and their lawyers understand and we get to pay higher fees for....

in short - while the prev congress spent 3 or 4 trillion more than they took in (and still dont have a budget on paper), now all of a sudden its 'conspiratorial' that the new house is focusing on what exactly happened?

let the campaign of the apologists begin...

[lektrode]

Re: US Govt to file suit against big banks for mortgage securities fraud

esp since it would appear that - according to one of EJ's latest comments/charts - that more of the FIRE money is now flowing to others besides the messiah - so hey! mights well put a little heat on em, just to remind em whos still 'in control'
and then, if they can get the 'pubs to say even more bad stuff about the fed, well... that just plays right into their plan, eh?

i must say dc, i do like/appreciate the way you think.

[doom&gloom]

Re: This Democratic leadership sure has gull.

All I want to know is, when will they FINALLY put some of those assholes in jail? i's downright embarassing how blatant the theft has become.

[lektrode]

Re: This Democratic leadership sure has gull.

All I want to know is, when will they FINALLY put some of those assholes in jail? i's downright embarassing how blatant the theft has become.

well.. if the banking industry (at least in ny) was run mostly by 'pubs, like say.. oh i dunno - the oil industry?

there would've been trials already...

maybe next year we might finally see some action, but i doubt it, since the 'pubs will be too busy trying to get elected/taking back the senate, which will then cause the FIREmen to stuff _their_ pockets with money, as appears to already be happening?

but any luck at all, we'll get some made-for-primetime 'theatrics' leading up to november

oh.. and if my comment about the big ny banks being run by dems isnt true, i would appreciate being corrected, WITH PROOF, that is - because everything i have seen so far, re the big outfits in lower manhattan anyway, indicates to me that they are ALL run by new york city's finest limosine liberals...

but please do correct/educate me if i'm wrong = its why i'm here, to learn and i consider the subscribers here to be among the best to offer this insight.

[Milton Kuo]

Re: This Democratic leadership sure has gull.

oh.. and if my comment about the big ny banks being run by dems isnt true, i would appreciate being corrected, WITH PROOF, that is - because everything i have seen so far, re the big outfits in lower manhattan anyway, indicates to me that they are ALL run by new york city's finest limosine liberals...

but please do correct/educate me if i'm wrong = its why i'm here, to learn and i consider the subscribers here to be among the best to offer this insight.

It doesn't matter whether the too-big-to-fail banks are being run by Democrats or Republicans: both political parties are equally corrupt and suborned by the FIRE economy. The dilemmas the U.S. is facing are not a matter of whether the Democrats or Republicans are in charge.

However, to provide evidence that the Republicans would not do any better, you need look no further than George W. Bush's terms in office. It was under his presidency that the housing bubble, and all the fraud that enabled it, started and took off. Search for the various articles that William Black has written about the rampant fraud in the mortgage industry during the housing bubble. He specifically points out that the FBI stated in the early 2000's that mortgage fraud was on the rise and, left unchecked, would lead to a banking crisis. Why didn't Bush or the Republican-controlled Congress heed the words of the FBI, nevermind iTulip and other non-establishment players warning about a housing bubble?

The banks were not "forced" to lend to poor, colored people, either as a matter of Democrat political platform. In one of Bush's speeches, he called for an "ownership society," cheerleading the housing bubble. Again, this was when the Republicans controlled Congress so no one can say Bush's arms were being twisted by Democrats.

For what it's worth, this is not just Republican or Bush bashing. Obama has done a terrible job (my opinion is that he's every bit as bad as Bush was) and many notable Democrats have decried the broken promises of Obama. I believe Joseph Stieglitz has said that Obama has "betrayed us." Finally, check out some of the essays and interviews Dr. Michael Hudson has done recently. He pretty much says that Obama is selling out his constituency to Wall Street.

[dcarrigg]

Re: This Democratic leadership sure has gull.

It doesn't matter whether the too-big-to-fail banks are being run by Democrats or Republicans: both political parties are equally corrupt and suborned by the FIRE economy.

BAM! Nail on the head.

[FrankL]

Re: This Democratic leadership sure has gull.

BAM! Nail on the head.

lektrode: are you incapable of acknowledging this fact (both Republican and Democrats lead the populace to the slaughterhouse), or are you just a troll?

You've ignored similar points in previous threads countless of times, where you continue to post the same false dichotomy again in new threads.

[aaron]

Re: This Democratic leadership sure has gull.

lektrode may come around soon enough. I know I have been educated a lot on these boards. At one point in my life, I too thought there was a difference between the parties.

lektrode has 2 personalities. One that spells correctly and is quite sober in thought. The other speaks in a strange dialect (Hawaiin?) and says some funny things. I suggest he puts down the Hawaiin punch and stops playing their game of divide and conquer.

[lektrode]

Re: This Democratic leadership sure has gull.

mr K... thanks for the comeback.

It doesn't matter whether the too-big-to-fail banks are being run by Democrats or Republicans: both political parties are equally corrupt and suborned by the FIRE economy. The dilemmas the U.S. is facing are not a matter of whether the Democrats or Republicans are in charge.

agreed!
(and +1 with dcarrigg)

However, to provide evidence that the Republicans would not do any better, you need look no further than George W. Bush's terms in office. It was under his presidency that the housing bubble, and all the fraud that enabled it, started and took off. Search for the various articles that William Black has written about the rampant fraud in the mortgage industry during the housing bubble. He specifically points out that the FBI stated in the early 2000's that mortgage fraud was on the rise and, left unchecked, would lead to a banking crisis. Why didn't Bush or the Republican-controlled Congress heed the words of the FBI, nevermind iTulip and other non-establishment players warning about a housing bubble?

there seems to be an awful lot of 'selective memory' around here on this topic and it seems to revolve around ones political pursuasion - is all i'm saying - and wish i had the intellectual capacity and more time to collect the references/evidence to put forth a better case to support my argument in the debate - so i'll rely on the below

and i'm not nearly as partisan-polarized as some seem to think - tho i do lean in the direction of the traditional NH republican (note the small r) point of view: smaller gov is better gov and what we have now is completely out of control, with fault/blame spread evenly on BOTH sides of the aisle, with a tad more 'credit' for the mess that passes for 'governance' to the liberal wing of the dems.

The banks were not "forced" to lend to poor, colored people, either as a matter of Democrat political platform. In one of Bush's speeches, he called for an "ownership society," cheerleading the housing bubble. Again, this was when the Republicans controlled Congress so no one can say Bush's arms were being twisted by Democrats.

again - this strikes me as selective memory - see below

For what it's worth, this is not just Republican or Bush bashing.

point taken/accepted.

Obama has done a terrible job (my opinion is that he's every bit as bad as Bush was) and many notable Democrats have decried the broken promises of Obama. I believe Joseph Stieglitz has said that Obama has "betrayed us." Finally, check out some of the essays and interviews Dr. Michael Hudson has done recently. He pretty much says that Obama is selling out his constituency to Wall Street.

no argument there = strongly agreed!
and tho i'm not advocating strictly for 'pubs - as they certainly havent come up with a better plan - i just think that the debate tends to be a bit one-sided around here at times, esp when the other side says something that obviously conflicts with the itulip consensus/status quo - tho i willingly absorb/engage the debate and am quite open to the other sides POV - i just think some ignore what doesnt suit their point of view: namely that the big banks, along with the legal lobby, tend to 'bankroll' the dems and that its the political class (both sides) in general that is to blame for what has happened

so i offer this in support of my position (and NO i dont typically, nor even seldom watch this particular video source, mostly PBS and NPR)



found on: http://www.norcalblogs.com/post_scri...bothed-wa.html

Because some people have selective memories while accusing us of having short memories, here is a little video evidence to help establish who has a memory problem and who doesn't. It only took about 3 seconds of looking on the net to come up with this one and there is a ton more of dated material to prove my case...watch and enjoy Libby, I know we will.
Headline: Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings
by Jim Hoft on Sunday, September 21, 2008, 12:32 PM

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted.
Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.
The White House released this list of attempts by President Bush to reform Freddie Mae and Freddie Mac since he took office in 2001.
Unfortunately, Congress did not act on the president's warnings:
** 2001
April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."
** 2002
May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)
** 2003
January: Freddie Mac announces it has to restate financial results for the previous three years.
February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)
September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.
September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.
October: Fannie Mae discloses $1.2 billion accounting error.
November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)
** 2004
February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore...should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)
February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)
June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)
** 2005
April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America... Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)
** 2007
July: Two Bear Stearns hedge funds invested in mortgage securities collapse.
August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)
September: RealtyTrac announces foreclosure filings up 243,000 in August - up 115 percent from the year before.
September: Single-family existing home sales decreases 7.5 percent from the previous month - the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.
December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs - and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)
** 2008
January: Bank of America announces it will buy Countrywide.
January: Citigroup announces mortgage portfolio lost $18.1 billion in value.
February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)
March: Bear Stearns announces it will sell itself to JPMorgan Chase.
March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)
April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by ... helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)
May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.
"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)
"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that - and Congress is making progress on this - is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)
"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)
June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)
July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
In 2005- Senator John McCain partnered with three other Senate Republicans to reform the government's involvement in lending.
Democrats blocked this reform, too.
More... Not only did democrats not act on these warnings but Barack Obama put one of the major Sub-Prime Slime players on his campaign as finance chairperson.
UPDATE: The media is not reporting that the failed financial institutions are big Obama donors.
And now this tidbit...
A September 11, 2003 New York Times article shows that President Bush proposed "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." His proposal: An agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac.
Fearing that mortgages would no longer be available to people who were unable to pay them back, Democrats eventually killed the proposal. The current meltdown in the mortgage industry is a direct result of giving mortgages to people who could not pay them back, a practice protected by Congressional Democrats.
Both entities were recently taken over by the government, a move that puts trillions of taxpayer dollars at risk.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
But Democrats in Congress, also known as "the caucus perpetually on the wrong side of history," were having none of this "responsibility" stuff.
"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing," Mr. Watt said.
The proposal worked its way around Congress for a couple of years. Efforts at reform of the kind proposed by President Bush were shot down by Democrats each time.
In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie's lobbyists set out to weaken it.
[...]
During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, [Democrat in bed with the mortgage industry Chris] Dodd -- who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 -- actively opposed such measures and further weakened existing regulation.
According to OpenSecrets.org, between 1988 and 2008 Dodd received $133,900, Kerry $111,000, Clinton $75,550, and Obama -- in only 143 days in the Senate -- received a whopping $105,849 from Fannie Mae and Freddie Mac.
Pennsylvania Democrat representative Paul Kanjorksi, who also opposed new Fannie Mae and Freddie Mac regulations, was given more than any other member of the House of Representatives. He was paid $65,500 by representatives of these entities.
And, in case you were wondering, John McCain co-sponsored a bill requiring greater Fannie Mae / Freddie Mac regulation in 2005. It was also blocked procedurally by Democrats.
The 2003 New York Times article was unearthed by a Free Republic poster.
UPDATE: 2004 video posted to YouTube shows Republicans arguing for, and Democrats arguing against, regulations that would have saved us from the current crisis.

[lektrode]

Re: This Democratic leadership sure has gull.

certainly NOT a troll, i pay for my priviledge to post... (and value the opportunity to interact with the very smart people here)

http://online.wsj.com/article/SB122290574391296381.html

• OCTOBER 2, 2008

What They Said About Fan and Fred



House Financial Services Committee hearing, Sept. 10, 2003:
Rep. Barney Frank (D., Mass.): I worry, frankly, that there's a tension here. The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disaster scenarios. . . .
APClockwise from top left: Sen. Thomas Carper, Rep. Barney Frank, Sen. Robert Bennett, Rep. Maxine Waters, Sen. Chris Dodd and Sen. Charles Schumer.



Rep. Maxine Waters (D., Calif.), speaking to Housing and Urban Development Secretary Mel Martinez:
Secretary Martinez, if it ain't broke, why do you want to fix it? Have the GSEs [government-sponsored enterprises] ever missed their housing goals?
* * *

House Financial Services Committee hearing, Sept. 25, 2003:
Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .
* * *

House Financial Services Committee hearing, Sept. 25, 2003:
Rep. Gregory Meeks, (D., N.Y.): . . . I am just pissed off at Ofheo [Office of Federal Housing Enterprise Oversight] because if it wasn't for you I don't think that we would be here in the first place.



Fannie Mayhem: A History

A compendium of The Wall Street Journal's recent editorial coverage of Fannie and Freddie.


And Freddie Mac, who on its own, you know, came out front and indicated it is wrong, and now the problem that we have and that we are faced with is maybe some individuals who wanted to do away with GSEs in the first place, you have given them an excuse to try to have this forum so that we can talk about it and maybe change the direction and the mission of what the GSEs had, which they have done a tremendous job. . .
Ofheo Director Armando Falcon Jr.: Congressman, Ofheo did not improperly apply accounting rules; Freddie Mac did. Ofheo did not try to manage earnings improperly; Freddie Mac did. So this isn't about the agency's engagement in improper conduct, it is about Freddie Mac. Let me just correct the record on that. . . . I have been asking for these additional authorities for four years now. I have been asking for additional resources, the independent appropriations assessment powers.


This is not a matter of the agency engaging in any misconduct. . . .
Rep. Waters: However, I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn't broke. Housing is the economic engine of our economy, and in no community does this engine need to work more than in mine. With last week's hurricane and the drain on the economy from the war in Iraq, we should do no harm to these GSEs. We should be enhancing regulation, not making fundamental change.
Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 act has worked just fine. In fact, the GSEs have exceeded their housing goals. . . .
Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?
Mr. Raines?
Mr. Raines: No, sir.
Mr. Frank: Mr. Gould?
Mr. Gould: No, sir. . . .
Mr. Frank: OK. Then I am not entirely sure why we are here. . . .
Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.
* * *

Senate Banking Committee, Oct. 16, 2003:
Sen. Charles Schumer (D., N.Y.): And my worry is that we're using the recent safety and soundness concerns, particularly with Freddie, and with a poor regulator, as a straw man to curtail Fannie and Freddie's mission. And I don't think there is any doubt that there are some in the administration who don't believe in Fannie and Freddie altogether, say let the private sector do it. That would be sort of an ideological position.
Mr. Raines: But more importantly, banks are in a far more risky business than we are.
* * *

Senate Banking Committee, Feb. 24-25, 2004:
Sen. Thomas Carper (D., Del.): What is the wrong that we're trying to right here? What is the potential harm that we're trying to avert?
Federal Reserve Chairman Alan Greenspan: Well, I think that that is a very good question, senator.
What we're trying to avert is we have in our financial system right now two very large and growing financial institutions which are very effective and are essentially capable of gaining market shares in a very major market to a large extent as a consequence of what is perceived to be a subsidy that prevents the markets from adjusting appropriately, prevents competition and the normal adjustment processes that we see on a day-by-day basis from functioning in a way that creates stability. . . . And so what we have is a structure here in which a very rapidly growing organization, holding assets and financing them by subsidized debt, is growing in a manner which really does not in and of itself contribute to either home ownership or necessarily liquidity or other aspects of the financial markets. . . .
Sen. Richard Shelby (R., Ala.): [T]he federal government has [an] ambiguous relationship with the GSEs. And how do we actually get rid of that ambiguity is a complicated, tricky thing. I don't know how we do it.
I mean, you've alluded to it a little bit, but how do we define the relationship? It's important, is it not?
Mr. Greenspan: Yes. Of all the issues that have been discussed today, I think that is the most difficult one. Because you cannot have, in a rational government or a rational society, two fundamentally different views as to what will happen under a certain event. Because it invites crisis, and it invites instability. . .
Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time. And we don't want to lose sight of that and [what] has been pointed out by all of our witnesses here, obviously, the 70% of Americans who own their own homes today, in no small measure, due because of the work that's been done here. And that shouldn't be lost in this debate and discussion. . . .
* * *

Senate Banking Committee, April 6, 2005:
Sen. Schumer: I'll lay my marker down right now, Mr. Chairman. I think Fannie and Freddie need some changes, but I don't think they need dramatic restructuring in terms of their mission, in terms of their role in the secondary mortgage market, et cetera. Change some of the accounting and regulatory issues, yes, but don't undo Fannie and Freddie.
* * *

Senate Banking Committee, June 15, 2006:
Sen. Robert Bennett (R., Utah): I think we do need a strong regulator. I think we do need a piece of legislation. But I think we do need also to be careful that we don't overreact.
I know the press, particularly, keeps saying this is another Enron, which it clearly is not. Fannie Mae has taken its lumps. Fannie Mae is paying a very large fine. Fannie Mae is under a very, very strong microscope, which it needs to be. . . . So let's not do nothing, and at the same time, let's not overreact. . .
Sen. Charles Schumer (D., N.Y.): I think a lot of people are being opportunistic, . . . throwing out the baby with the bathwater, saying, "Let's dramatically restructure Fannie and Freddie," when that is not what's called for as a result of what's happened here. . . .
Sen. Chuck Hagel (R., Neb.): Mr. Chairman, what we're dealing with is an astounding failure of management and board responsibility, driven clearly by self interest and greed. And when we reference this issue in the context of -- the best we can say is, "It's no Enron." Now, that's a hell of a high standard.

[lektrode]

Re: This Democratic leadership sure has gull.

lektrode may come around soon enough. I know I have been educated a lot on these boards. At one point in my life, I too thought there was a difference between the parties.

will most certainly agree!
and yes, dcarrigg has been slowly winning my admiration, and never mind dave stratman...

lektrode has 2 personalities. One that spells correctly and is quite sober in thought. The other speaks in a strange dialect (Hawaiin?) and says some funny things. I suggest he puts down the Hawaiin punch and stops playing their game of divide and conquer.

believe it or not, i have a great deal of fun on the 'tulip - it has been by far the most entertaining source of reading material eye have _ever_ run across (and thats even before we get to EJ's output, never mind mr c1ue's, ash, bart, and the finster)
and yes, i do try to input some humor in my posts. (and typically stay out of the serious discussion of EJ's posts, or try to, as i certainly am a lightweight in these sorts of matters) - but far as 'the news' is concerned: i think this aspect of itulip is 'open season' and free-for-all to jump in with their .02 and i do read _everybody_ the discussion of 'the news' is my fave part of the '3ring circus' here.

and i dont see how offering up some contrast tween the 2 parties, in terms of economic issues, for debate here is 'divide and conquer' as i typically solicit additional and opposing POV (and sometimes get _way_ more than i bargain for and have capacity to rebutt ;)

oh - and try spell Hawaiian correctly - they appreciate their language being used/spelled in a correct manner

[Thailandnotes]

Re: This Democratic leadership sure has gull.

The fight over GSE reform was really a fight about whether or not to privatize Fannie and Freddie, which was why reform was never possible. Oxley's reform bill passed the House. It had bipartisan support. I think the vote was like 400 to 90 in favor. It provided for real over site. It was killed in the senate and Oxley (R) ended up blaming the WSJ and the Bush administration. Fannie and Freddie were corrupt and out of control. The leadership took tens of millions in compensation and handed out tons of campaign contributions and under priced loans. But real reform was blocked by both parties. Most of the people talking the talk, had no intention of walking the walk.

“All the Devils are Here” details the bipartisan natures of the housing scandal...from Amazon...”As soon as the financial crisis erupted, the finger-pointing began. Should the blame fall on Wall Street, Main Street, or Pennsylvania Avenue? On greedy traders, misguided regulators, sleazy subprime companies, cowardly legislators, or clueless home buyers? According to Bethany McLean and Joe Nocera, two of America's most acclaimed business journalists, the real answer is all of the above-and more.

[brent217]

Re: This Democratic leadership sure has gull.

From:

http://www.zerohedge.com/news/fhfa-l...bail-out-banks

That Zero Hedge has a jaded outlook on the world is pretty much clear by now. But even our cynicism is amateur hour compared to that exhibited by some of our readers. Below we present one outlook by reader Joseph, on how the FHFA "lawsuit" against the banks, a development that as we noted before stinks to high heaven from a purely (lack of ) logical standpoint, could be nothing less than Res Judicata in sheep's clothing, whose purpose is simply to facilitate the case for QE (banks tumble), then settlement of the settlement (banks soar), but not before the crony communists have built up a solid equity position in the names, QE3 is firmly in place, and Obama is seen as the crusader against the hated banks. Is it possible? Who knows. We will find out as the affidavits start trickling in.
Some brainstorming from Joseph:

"Issue preclusion" in first suit "fully and fairly litigated" is res judicata in all subsequent cases even if parties are different.

1. Initiate Fed Fannie/Freddie suit and stay all other litigation while bank panic ensues.
2. Drag down market and start QE3 while bank directors shovel money into Obama's campaign.
3. Bernanke buys the shitty MBS and worthless bank stock "to save economy," stocks up, bonuses saved, election won!
4. Throw the suit and lose (on a technicality!) creating res judicata so banks thereafter can win based on res judicata in all the other state and federal cases
5. Banks walk from all litigation winners so screw the attorney generals settlement and the New York state BOA litigation.
6. Taxpayers pick up tab TWICE, once for the original fraud MBS sold to F/F and once for QE3 to "save the economy."
7. Obama is a lawyer and this is basic "con" law.
8. Occam's razor. Wells Fargo, the one not sued, is the one going down, IMHO.
9. On the other hand, I'm a sick twisted fuck, so what do I know.

A lot of the commentary on zero hedge has to do with the exact legal principles expressed being incorrect, however, the general idea of the message seems cynical and twisted enough to be true.

[lektrode]

Re: This Democratic leadership sure has gull.

thanks TN
appreciate the insight
i dont pretend to know everything about these topics, why i'm willing to stick my neck out (at the risk of being labled an 'ideologue' or being marked for 'ignore') and the intent of my posts is to stimulate the exchange of thought different from my own = how i learn

apologies to those whos sensibilities i've apparently offended, its not my intention

The fight over GSE reform was really a fight about whether or not to privatize Fannie and Freddie, which was why reform was never possible. Oxley's reform bill passed the House. It had bipartisan support. I think the vote was like 400 to 90 in favor. It provided for real over site. It was killed in the senate and Oxley (R) ended up blaming the WSJ and the Bush administration. Fannie and Freddie were corrupt and out of control. The leadership took tens of millions in compensation and handed out tons of campaign contributions and under priced loans. But real reform was blocked by both parties. Most of the people talking the talk, had no intention of walking the walk.

“All the Devils are Here” details the bipartisan natures of the housing scandal...from Amazon...”As soon as the financial crisis erupted, the finger-pointing began. Should the blame fall on Wall Street, Main Street, or Pennsylvania Avenue? On greedy traders, misguided regulators, sleazy subprime companies, cowardly legislators, or clueless home buyers? According to Bethany McLean and Joe Nocera, two of America's most acclaimed business journalists, the real answer is all of the above-and more.