Obama Drowning Business in a Sea of Red Tape

joepistole said:
The cause of the Great Recession was not the poor loans. It was the misreprentation of those loans and the remarketing and unregulated trading of derivatives related to those loans.
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If the bad loans hadn't been made in the first place the whole mess would never have happened. So pressuring banks to make loans to "underserved" communities clearly played a key role in the genesis of the crisis.

It really shouldn't have come as a surprise that the banks, having been pressured into making bad loans by the government, would chose to pass them along to someone else. Turning them into mortgage backed securities was a way for the banks to take the bag of shit the government forced them to accept and pass it along to someone else while making a tidy profit in the process.

And now there is more talk of regulations in the news:
A decades-long and highly partisan debate raged anew between the Obama administration and congressional Republicans Tuesday when the president advised John Boehner, in response to an inquiry from the House speaker, that the government is considering seven new regulations that could collectively cost the economy from tens of billions of dollars to more than $100 billion per year.

In fact, a tally of regulatory cost ranges identified by Obama has a high-end total of $105 billion for four rules administered by the Environmental Protection Agency, and another $5 billion for regulations that would be administered by the Department of Transportation. The most expensive regulation on Obama’s list, dealing with health hazards from smog, is estimated to cost the economy between $19 billion and $90 billion.

Boehner responded immediately Tuesday, telling the president by letter that Republicans, listening to the business community and eager to fight regulatory burdens, now want Obama to provide cost estimates for 212 other economically significant regulatory actions in the federal pipeline.

The skirmish over regulations bubbled to the surface as Obama prepared to unveil what the White House says will be a collection of job-creation proposals next week. House Republicans are championing their own plan in advance of the president’s speech. That plan, barely 10 pages long (including graphics), asserts that “total regulatory costs amount to $1.75 trillion annually -- enough money for businesses to provide 17.5 million private sector jobs with an average salary of $100,000.”

On Tuesday, Boehner said federal requirements are “misguided” if they cost the private sector too much and stifle hiring as a result.

“We know from the administration’s own disclosures that there are 212 other regulatory actions in the works, each with an estimated cost to our economy of more than $100 million,” Boehner wrote. “At a time like this, with our economy struggling to create jobs, it’s misguided for the federal government to be imposing so many new rules with such enormous costs, even when some of those rules may be well-intentioned.”
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Even President Obama is aware of the perception that he is squelching economic activity thru over- regulation:
To try to get ahead of his critics, the president in his State of the Union address last January announced that executive departments and agencies would scrub through existing rules that might be outmoded, redundant, burdensome or in conflict with other federal requirements.

The president, through the Office of Information and Regulatory Affairs in the Office of Management and Budget, issued an executive order describing the housecleaning, and the White House has announced increments of progress over the last seven months. While Obama was vacationing in Martha’s Vineyard, the administration on Aug. 23 announced regulatory changes at 26 agencies and departments that it said could save $10 billion in economic costs over five years.
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madanthonywayne said:
If the bad loans hadn't been made in the first place the whole mess would never have happened. So pressuring banks to make loans to "underserved" communities clearly played a key role in the genesis of the crisis.
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If we stopped driving cars, there would be no car accidents too. Bad loans are a reality. They happen all the time, because conditions change. Good loans can become bad loans over time due to changing conditions. The risk of bad loans are priced into the loan.

When the risk is misrepresented as it was in the Great Recession of 2008, loans are not priced appropriately. And that is exactly the problem that caused the financial crisis of 2008. It was not the bad loans as Republicans would have folks believe.

Two, despite all of inflamatory Republican rhetoric, there is NO evidence that government regulators past and present pushed or coerced lenders into making bad loans.

This kind of rhetoric may play well with Republican devotees as it deflects blame from themselves and their financial sponsors. But it is far from the truth. But then that has never ever bother Republicans.

madanthonywayne said:
It really shouldn't have come as a surprise that the banks, having been pressured into making bad loans by the government, would chose to pass them along to someone else. Turning them into mortgage backed securities was a way for the banks to take the bag of shit the government forced them to accept and pass it along to someone else while making a tidy profit in the process.
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Nice conspiracy theory, but like I said there is not an iota of proof that government regulators did anything wrong. Despite Republican rhetoric, there is no evidence regulators pushed banks to make bad loans. Only in the mythical mysterious world of Republican partisanship can it be that loans to minority citizens automatically equate to bad loans.
 
madanthonywayne said:
And now there is more talk of regulations in the news:
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SO? This is a classic shell game Republicans like to play. There may be a cost to regulation. But there is also a cost to not regulating. The key is to find the right balance of cost and benefit.

It is not to just not regulate. Nor it is not to not regulate those special interests that line the campaign coffers of public representatives and fund special interest advertising. What I find interesting about Republicans is that while the claim to be against regulation, what they really mean is they are against any legislation that goes against their favorite sugar daddies in favor of the common man.

madanthonywayne said:
Even President Obama is aware of the perception that he is squelching economic activity thru over- regulation:

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President Obama is aware of the politcal games Republicans are trying to play with the regulation issue. And perceptions, especially in politics, are frequently wrong.
 
madanthonywayne said:
If the bad loans hadn't been made in the first place the whole mess would never have happened. So pressuring banks to make loans to "underserved" communities clearly played a key role in the genesis of the crisis.
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The problem was that banks didn't feel any responsibility to make good loans, since they would only be keeping them for a day or two. It was a pure profit motivation, so the banks screwed themselves for short term gain.

If banks are now required to service loans, they will make good loans. There is nothing about serving a minority community that forces banks to accept bad loans!
 
spidergoat said:
There is enough evidence that the current crisis is the result of misbehavior by brokers, lenders, servicers, and the mortgage-backed securities industry that even former Federal Reserve Chairman Alan Greenspan said in a 2007 Newsweek interview that the “big demand” for subprime mortgages “was not so much on the part of the borrowers as it was on the part of the suppliers who were giving loans which really most people couldn’t afford.” Handsome profits were made at each level of the supply chain, not least of all by investors on Wall Street, who became the prime drivers for expanding high-cost unconventional home mortgage loans.
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Pretty funny how Greenspan is covering his ass by blaming everyone else under the sun and that NO BLAME is assigned to the BORROWERS.

You know, the people taking out the LIAR loans.

Indeed it paints the picture as if the millions of Bad loans occurred on their own.

They didn't.

There was a borrower at the end of each one of them and those borrowers didn't get forced into buying property they couldn't afford by the Mortgage brokers.
 
It's the bank's responsibility to have good lending standards, not the customer. After all, it's the bank that's going to lose the money. Liar loans are a bad banking practice to begin with, the customers did not invent them.

The problem wasn't even the bad loans, but the fact that they were bundled with good loans, given fraudulent ratings, and sold as good investments. If it had only been bad loans, that would not have been a problem that reverberated throughout the economy.
 
spidergoat said:
It's the bank's responsibility to have good lending standards, not the customer. After all, it's the bank that's going to lose the money. Liar loans are a bad banking practice to begin with, the customers did not invent them.
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They were created because there is a need for loans for people who can't document income.
Regardless, blaiming ONLY the banks is silly.

The problem wasn't even the bad loans, but the fact that they were bundled with good loans, given fraudulent ratings, and sold as good investments. If it had only been bad loans, that would not have been a problem that reverberated throughout the economy.
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BS

Intentional Fraud would be easily prosecuted by the investors.

Show the cases where investors have successfully sued for fraud based on this supposed fact.
 
madanthonywayne said:
If the bad loans hadn't been made in the first place the whole mess would never have happened. So pressuring banks to make loans to "underserved" communities clearly played a key role in the genesis of the crisis.
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Can you show us evidence of how depriving underserved communities of loans would have clearly saved the US from its current financial difficulties? Do you have any numbers or analyses to support the argument that loans to such communities constitute a critical portion of the losses and liabilities?
 
spidergoat said:
The problem was that banks didn't feel any responsibility to make good loans, since they would only be keeping them for a day or two. It was a pure profit motivation, so the banks screwed themselves for short term gain.
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Again BS

What happened to lending giants WAMU, Countrywide, IndyMac, Wachovia, Natl City, Fannie and Freddie etc etc.

Guess they didn't feel any responsibiltity to make good loans either?
 
It's not that banks did not want to lend to minorities, they just wanted to be able to wring every penny out of them that they could, kind of like those payday loan schemes and furniture rental companies.
 
adoucette said:
Again BS

What happened to lending giants WAMU, Countrywide, IndyMac, Wachovia, Natl City, Fannie and Freddie etc etc.

Guess they didn't feel any responsibiltity to make good loans either?
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They bought into the whole securities scheme as well because few people really understood it.
 
spidergoat said:
SEC Threatens Credit Rating Agencies With Fraud Charges

Ratings Agencies Accused of Rampant Ratings Fraud

Former Moody's Senior Vice President Accuses Rating Agency of Fraud, Corruption, and Greed
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Except those don't support your case (well except for the misleading headlines)

Show the cases where investors have successfully sued for fraud based on this supposed fact.

The Securities and Exchange Commission has declined to seek fraud charges against Moody's Investors Services

And the ratings were NOT done by the banks, thus the banks were not giving the loans fraudulent ratings.

Arthur
 
spidergoat said:
It's not that banks did not want to lend to minorities, they just wanted to be able to wring every penny out of them that they could, kind of like those payday loan schemes and furniture rental companies.
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Again BS.

Consider two AIG subsidiaries that Justice alleged "failed to supervise or monitor brokers in setting broker fees" between 2003 and 2006, but that Justice didn't pursue aggressively until the Obama administration.

The government claimed that, in aggregate, African-Americans were charged more than other ethnic groups.

AIG settled in March 2010 while it was under federal ownership
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So it was the INDEPENDENT Brokers who were making the money from the large fees, NOT AIG, but the govt went after AIG and then when the fuckin FED owned them, the Obama FEDs SETTLED with the FED.

What a laugh.
 
adoucette said:
Except those don't support your case (well except for the misleading headlines)

Show the cases where investors have successfully sued for fraud based on this supposed fact.

The Securities and Exchange Commission has declined to seek fraud charges against Moody's Investors Services

And the ratings were NOT done by the banks, thus the banks were not giving the loans fraudulent ratings.

Arthur
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They declined for technical reasons, not because they realized they were not guilty.

The banks were working closely with ratings companies, they fed off each other.

I can't show you a case that is finished and closed, but that doesn't really show anything, these kinds of cases can take decades.


We have the richest industries from the richest nation in the world all supporting media outlets that are conspiring to fool the public into thinking that poor people took advantage of the biggest and most powerful corporations in the world and tanked the (world) economy all on their own. And it's all because they don't want a little extra tax to go towards helping build a middle class. The economic elites want a two class society, the poor wage slaves, and the super rich.
 
spidergoat said:
They declined for technical reasons, not because they realized they were not guilty.
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No they declined because it was a LIMITED event: a Moody's analyst found in 2007 that a computer error at the European affiliate had resulted in certain bonds receiving ratings that downplayed their level of risk

Indeed, in 2007 when the computer error was found, the bubble had already burst.

The banks were working closely with ratings companies, they fed off each other.
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And THAT would be Fraud and yet I know of NO CASES in the works that suggests the Banks were doing so.

I can't show you a case that is finished and closed, but that doesn't really show anything, these kinds of cases can take decades.
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Show me a case that is being tried then (and involves the magnitude of dollars that actually matters).

Arthur
 
adoucette said:
Except those don't support your case (well except for the misleading headlines)

Show the cases where investors have successfully sued for fraud based on this supposed fact.

The Securities and Exchange Commission has declined to seek fraud charges against Moody's Investors Services

And the ratings were NOT done by the banks, thus the banks were not giving the loans fraudulent ratings.

Arthur
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You must believe in miracles too. :) Anyone who knows anything about the American judicial system knows that the litigation process is very slow. And considering how recent this event is, I think your expectations are a bit premature.

The Department of Justice is currently investigating the rating agencies for criminal fraud. In this country, contrary to Republican whims, we don't just throw people in jail because we feel like it. The Obama administration is not the Cheney administration. Obama doesn't torture to get confessions either.

What is more telling is how some of these players have settled out of court. I think most of the civil suits will be settled out of court.

http://ewallstreeter.com/sayonara-f...ca-s-billion-mortgage-fraud-settlement-6893/#

And because these issues are typically settled out of court, it does not mean there was no wrong doing. I assure you Bank of American is not paying 8.5 billion dollars of shareholder money to settle these claims because they are nice guys.
 
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