Senator Elizabeth Warren (D) MA to re-attempt Glass Stegall

[jem]

you are a smart guy.

I never would have thought of this because my mind does not think govt ever gets anything right... but that is an ingenious leftist way of thinking about things.

We can just interfere with the market till we get it just right? As opposed to my thought - let them risk their own asses instead of the tax payers.

Quote from Ricter:

Perhaps the best if not perfect solution would be some kind of capital controls at the national level, so that we could say to a flood of petro and sino dollars, "no thanks, we have enough for now."

 

[Ricter]

Quote from jem:

you are a smart guy.

I never would have thought of this because my mind does not think govt ever gets anything right... but that is an ingenious leftist way of thinking about things.

We can just interfere with the market till we get it just right? As opposed to my thought - let them risk their own asses instead of the tax payers.

How do you prevent them from risking depositor assets while they risk their own? G.S. is one approach, do you disagree with that too?

 

[JamesL]

Quote from Tsing Tao:

Bravo, Ms. Warren. You have the right idea. I have almost no faith in your Senate (or the House for that matter) to approve such an bill, and even if they did there's no way Obama would sign it, but nice to see the thought.

With all the hand-wringing, finger-pointing and demagoguery from DC for the past 5 yrs, I find it hard to believe that Obama would veto it or that there wouldn't be a veto-proof majority behind this.

But then again, I might be willfully ignorant on such matters.

 

[PiggyBank]

Quote from Ricter:

How do you prevent them from risking depositor assets while they risk their own?...

Don't insure deposits and force depositors to spread their assets around.

 

[Ricter]

Quote from PiggyBank:

Don't insure deposits and force depositors to spread their assets around.

Where does this laissez faire philosophy break down for you? Food safety, maybe? Or is it simply buyer beware there, too?

 

[Martinghoul]

Quote from Tsing Tao:
Where do you get off saying it's an urban myth? Are you saying the repeal of GS did not set up an epic collapse of financial markets?

Like I said in some old threads, this is a very typical "bankster" meme that allows them to eschew all responsibility for the crisis. It's popularized by people like Charles Calomiris, Edward Pinto, Peter Wallison and some others. There's an over-abundance of evidence that demonstrates that blaming the CRA is nothing but an attempt by the financial industry lobby to return to business as usual ASAP. It's also reasonably clear that the repeal of Glass-Steagall had a lot to do with the crisis. The "blame the CRA" mis-direction has a lot of fans on these forums.

Like yourself, I applaud Warren's attempt to do the right thing and hope she succeeds.

 

[Tsing Tao]

Quote from AAAintheBeltway:

I agree with him.

The financial crisis was the result of a real estate bubble. Mortgage lending is a core banking function. Institutions failed or had to be bailed out because they were overleveraged, largely to mortgage paper.

If you want to go after the cause, look at the Community Reinvestment Act, FNM/FRE, incompetent Fed supervision of lending and mortgage fraud.

And why do you think they were over-leveraged? Why do you think it was so important to bail them out? Do you not think there'd be more resistance to bail them out if there were no depositors to worry about? If banks could not leverage up like they did?

 

[jem]

how is this post from 2010



06-24-10 10:36 AM
You all act as if this market placed was not rigged.

Look until the Wall Street con men realized they were back stopped by the government... people in CA for had to pay 4- 6 points higher in their interest rates and 2-4% to hard money lenders for the last 20% of the loan. (because we had some non recourse loans.)

Then Wall Street set up the big fraud in which they underpriced the hard money guys. They could do this because they were not risking their own money.

They were selling China's money but China new the Fed would back stop them.

Now after the systems crumbled we have the FHA spending over a trillion dollars - giving out below market mortgages at 96.5 to 100%... to save the banks and stablize the low end of the market.
---

The market worked fine until Clinton eliminated glass steagall, congress choose not to regulate CDOS, wall street went from partnerships to corporations --- and Barney Frank Chris Dodd on most of Congress sold themselves to banks.

Get the government back stops out of banking. You will see market, risk, loans and interest rates balance out again.

We will instantly see higher interest rates and lower house prices.

--

by the way if you read my first post on this thread, you see I said bravo to the new glass steagall idea.

if we are going to back stop... and the banks are going to take bailouts we have to separate the tax payers from the leveraged speculation.

Quote from Ricter:

How do you prevent them from risking depositor assets while they risk their own? G.S. is one approach, do you disagree with that too?

 

[Tsing Tao]

Quote from Ricter:

How do you prevent them from risking depositor assets while they risk their own? G.S. is one approach, do you disagree with that too?

Not only risking the assets, but using them to be able to lever up so greatly!

Take away the deposits and watch what happens with leverage.

 

[Ricter]

Quote from jem:

how is this post from 2010

06-24-10 10:36 AM
You all act as if this market placed was not rigged.

Look until the Wall Street con men realized they were back stopped by the government... people in CA for had to pay 4- 6 points higher in their interest rates and 2-4% to hard money lenders for the last 20% of the loan. (because we had some non recourse loans.)

Then Wall Street set up the big fraud in which they underpriced the hard money guys. They could do this because they were not risking their own money.

They were selling China's money but China new the Fed would back stop them.

Now after the systems crumbled we have the FHA spending over a trillion dollars - giving out below market mortgages at 96.5 to 100%... to save the banks and stablize the low end of the market.
---

The market worked fine until Clinton eliminated glass steagall, congress choose not to regulate CDOS, wall street went from partnerships to corporations --- and Barney Frank Chris Dodd on most of Congress sold themselves to banks.

Get the government back stops out of banking. You will see market, risk, loans and interest rates balance out again.

We will instantly see higher interest rates and lower house prices.

--

by the way if you read my first post on this thread, you see I said bravo to the new glass steagall idea.

if we are going to back stop... and the banks are going to take bailouts we have to separate the tax payers from the leveraged speculation.

Ok, misread you. I also think G.S. type regulation is appropriate. Even without a flood of foreign capital, the gamblers create their own currency through leveraging their receivables, aka collateral chains. Let 'em do it, but not with depositor money.