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posted 1/18/2010 10:48:30 AM |
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If you follow me at all, I am not a big fan of Democrats.

ESPECIALLY when it comes to a strong military.

They love to cut our military down each time they get elected and in power...

Now they are trying to destroy our Health Care System....

and our nation as they did in the Housing Market forcing BANKS to give mortgages to NON-CREDIT WORTHY people.

Check this out ....

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Blogs by el_gato:
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Two Jokes - Anal Sex and Las Vegas
Let me explain for the dim witted a simple philosophy
Democrats buy votes with our tax dollars
Just when you think America is lost to idiot Democrats,,,
Scary Video!!
Thank You Obama!!
Moron Democrats


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Jan 18 @ 12:06PM  
Fek me !!! If Iran gets those ingredients, HAMAS and
other terrorists will too.

The Republican over the Ft. Hood area says it's time to get rid of
'Political Correctness', as it's killed too many of OUR people.
I'd not mind a little profiling, to save lives.

Jan 18 @ 12:11PM  
Sorry Cat..But the sub prime started years ago in the Bush administration..

The sub prime mortgage crisis was born in a decade-long housing boom fueled by low interest rates and excess liquidity. During these ‘boom’ years, mortgage brokers enticed by the lure of big commissions, talked buyers with poor credit into accepting housing mortgages with little or no down payment and without proper tax documentation and credit checks. And so the groundwork was established for the coming mortgage meltdown.

These loans, usually adjustable rate mortgages (ARMs) were known as subprime mortgages. They typically cost two or three points above those with less-risky credit reports and carry interest rate structures with low ‘teaser rates’ for the first couple of years, followed by a reset to much higher rates. This reset or jump, frequently resulted in raising the borrower’s monthly payment by as much as 100% and thereby making it financially impossible for him to handle.

The new homeowners saw a rising value of their previously foreclosed homes during the initial year or so of their mortgages, and frequently took out home equity loans for extra cash.

In addition, banks and financial institutions often repackaged these debts with other high-risk debts and sold them to worldwide investors creating financial instruments called CDOs or collateralized debt obligations.

The serious sub prime crisis began in June of 2007 when two Bear Stearns hedge funds collapsed. This had a rapid effect on other parts of the financial markets worldwide which reached the crisis level and the number of foreclosures for sale in August-September of this year and temporarily froze the money market sector that is critically important to banking and financial operations.

When this took place, the Federal Reserve Bank and European Central Bank dumped $100-billion in liquidity into the system that calmed the market down for a short period.

The sub prime mortgage market continued to be solid as long as the housing market continued to escalate and interest rates didn’t go up. Meanwhile, the homeowners continued to incur more debt until it reached a level of $700 billion or 5% of the US GDP in 2004. By 2006, housing prices started to taper off after rising nearly 40% between 200 and 2006. They are expected to continue their decline through 2007 and most of 2008.

Jan 18 @ 1:09PM  
Sorry there young fella that you don't like to see facts and only seem to want
your own opinion substantiated with NO facts or reference to back them up..
But that's life in the fast lane

Jan 18 @ 2:06PM  

Bill Clinton Signs Repeal of Glass-Steagall

The banking and financial industry complained about the Banking Act of 1933 even as Congress debated it. As the Act worked its way through Congress, banks vigorously opposed it, causing some doubts about whether it would pass, especially with the provisions Carter Glass advocated that prevented banks from entering into the stock market.

Initial Banking Opposition to Glass-Steagall

The centerpiece of the debate over Glass-Steagall was a three-week filibuster by Louisiana Senator Huey Long, which would stand as the longest filibuster in Congressional History until Strom Thurmond’s filibuster of the Civil Rights Bill. This so incensed Glass that he accused Long of being in the pockets of the banks. The American Banking Association opposed the bill. According to a paper by Jill M. Hendrickson

in 1932, 36 percent of national bank profits came from their investment affiliates (Wall Street Journal 1933b, p. 1).

Glass, in his typical style, made this point more forcefully:

Nobody can conceive of the damage done by these affiliates. They literally loaded the portfolios of interior banks with foreign securities approved by this abominable State Department. [New York Times, December 6, 1933]

Many believe the key moment that changed opposition to Glass-Steagall came with the release of the text of investigative hearings held by New York Senator Ferdinand Pecora. His investigation into banking practices uncovered abuses including:

Reputable investment houses that pushed on unsuspecting investors the securities of a company in which they were closely associated; speculation on the stock exchange; and evasion of income taxes on huge earnings by investment bankers. These questionable activities were aided by the commercial banks as they advised their depositors to use their affiliates’ security salesmen for investment advice.

The hardball tactics by Pecora’s committee seem to come from an America and a Democratic Party the exist only in dim memory, but the Committee’s findings aroused such an outcry that newly-elected President Franklin Roosevelt knew something had to be done. Hendrickson adds that perhaps as instrumental was the impact of the stock market crash itself which made investing in securities less attractive to banks.

Whatever the reason, Glass-Stegall survived Long’s filibuster and became law. Ever since the Act has been a thorn in the side of American financial industry which like the proverbial lion has howled about the thorn in its paw.

Investment Company v Camp

The most notable moment in the attempts to scuttle Glass-Steagall came with the 1971 Supreme Court decision Investment Company Institute v. Camp. In that complex case the Court issued one of the most ringing and unequivocal defenses of Glass-Steagall:

Congress was concerned that commercial banks in general and member banks of the Federal Reserve System in particular had both aggravated and been damaged by stock market decline partly because of their direct and indirect involvement in the trading and ownership of speculative securities.

The legislative history of the Glass-Steagall Act shows that Congress also had in mind and repeatedly focused on the more subtle hazards that arise when a commercial bank goes beyond the business of acting as fiduciary or managing agent and enters the investment banking business either directly or by establishing an affiliate to hold and sell particular investments.

Many arguments the Supreme Court advanced in support of Glass-Steagall, would prove prophetic three decades later.

Rising Opposition

As the Republican Counterrevolution gained power, the GOP began nibbling away at Glass-Steagall. These challenges had both symbolic and legal implications. The two pieces of New Deal legislation the have most irked the Counterrevolution have been Glass-Steagall and Social Security. One dared assert that the government in the interests of the greater good had the right to regulate the nation’s financial industry and the other established the principal that the government had a duty to help the less fortunate to insure a level playing field.

It would take too long to recite all the actions that chipped away at Glass-Steagall but a few highlights stand out. In the mid-1980s a Federal Reserve Board stocked with Reagan-Bush appointees began reinterpreting Glass-Steagall in a series of actions that slowly expanded the ability of banks to engage in other financial operations. In 1990, the Fed, under former J.P. Morgan director Alan Greenspan, permitted guess who–J.P. Morgan–to become the first bank allowed to underwrite securities. It is noteworthy that if William Jennings Bryan had had his way about the Federal Reserve Act, Greenspan would have never ascended to the position that allowed him to weaken the act named for the father of the Federal Reserve System.

Four legislative attempts were made to weaken or repeal parts of Glass-Steagall from 1988-1996. One reason they failed is because smaller banks feared that opening the doors to allow banks to trade in securities would lead to the domination of larger banks–a fate that has come to pass. The biggest change came in 1996 when Alan Greenspan issued a ruling allowing bank investment affiliates to have up to a quarter of their business in investments.

The Rise of Sandy Weill

In the up-tempo financial atmosphere in the years surrounding the Greenspan ruling, all sorts of financial innovations took place, some ingenious and some illicit. Of the latter the most notorious was Enron. In this go-go market it was all but inevitable that mortgages should be drawn into this activity.

For most Americans prior to the 1990s, subprime mortgage lenders had a reputation not far removed from pawnshops and slum landlords. Like them most subprime lenders preyed on people who had no alternative and like them subprime lenders often operated on that narrow line separating the shady and the illegal. In 1986 a young man named Sanford Weill grew bored with Wall Street and purchased one of these subprime lenders, Commercial Credit, a loan company based in Baltimore. In his paper “Banking on Misery Citigroup, Wall Street, and the Fleecing of the South,” Michael Hudson notes Weill drove employees to sell more. He quotes employee Frank Smith:

Over a period of time, it went from a family, employee-oriented company—doing the right thing, trying to help its cust

Jan 18 @ 2:54PM  
The Repeal of Glass Steagall

In the background of the go-go economy, the feeling grew among some economists and the financial community that Glass-Steagall hampered America’s financial competitiveness. Among the many voices favoring this was Alan Greenspan along with former Goldman Sachs partner Robert Rubin, Bill Clinton’s Treasury Secretary. In a 1995 speech and testimony to Congress Rubin signaled the Clinton Administration was ready to repeal Glass-Steagall:

“The banking industry is fundamentally different from what it was two decades ago, let alone in 1933.” He said the industry has been transformed into a global business of facilitating capital formation through diverse new products, services and markets. “U.S. banks generally engage in a broader range of securities activities abroad than is permitted domestically,” said the Treasury secretary. “Even domestically, the separation of investment banking and commercial banking envisioned by Glass-Steagall has eroded significantly.”

Anyone who thinks the repeal of Glass-Steagall was forced on an unwilling Bill Clinton need only read Rubin’s testimony.

A year later Sandy Weill set in motion the forces that would finally end Glass-Steagall. Weill proposed the most audacious financial merger in American history: he would merge one of the largest insurance companies (Travelers), one of the largest investment banks (Salomon Smith Barney), and the largest commercial banks (Citibank) in America. The problem was the merger was illegal in terms of Glass-Steagall

You have to understand the system of economics and the dynamics of the economy at the time leading up to the crisis. Politicians aside, the principles of economics are constantly streaming and cannot be pinpointed to brief periods. Again, it is a dynamic situation.

As to the rest of your comments, el gato, yes we are at a particularly dangerous crossroad. This administration so far has not shown a direction in which to proceed. Being the adroit politician that Obama is, I predict an about face in his policy on terrorism. I hope so. I see him wandering from his political base and in so doing losing losing the support of many liberals. It make take a major catastrophy. When that does happen, the first to yell, scream and point their finger is always the weaker individuals who previously kept their heads in the sand. And the meek shall inherit the earth.....but in what shape or form?

Jan 18 @ 4:22PM  
For most Americans prior to the 1990s, subprime mortgage lenders had a reputation not far removed from pawnshops and slum landlords.

The sub prime practice has been around for decades. To say it started with any particular president isn't...well, in the words of Groucho Marks:

A child of five would understand this. Send someone to fetch a child of five.
Groucho Marx

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Scary Video!!