Irony or just a coinkydink?
Cookie Jill over at Skippy’s place reminds us that the global head of Lehman Brothers’ investment management division is….
George Herbert Walker, Bubble Boy’s cousin.Guess it runs in the family!
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Jason I sent that story to you yesterday. Worse Jeb Bush was hired as their Asset Manager last August. George Walker is a cousin! Everything the Bush/Walkers touch goes straight to hell.
Jason didn’t post this, and generally speaking won’t be posting much in the near future. Please use the tip line at the top of the page.
Wow. Is there nothing this family touches that doesn’t turn to shit?
Things you could do with three trillion dollars, other than invade Iraq.
I like “buy a bottle of Jamison’s Irish Whiskey for every human being who has ever lived.” Although the platinum and diamond vibrator for every woman currently residing in Europe and North America would be nice too.
their own bank accounts deldem
John McCain’s son was on the board of one of the banks that failed recently. Silver State, I think? It seems there are McCains around failed banks – coinky dink?
you read that hear UI…. 🙂
http://delawareliberal.net//2008/07/29/apparently-bank-problems-run-in-the-family/
Yep. You can’t trust Republicans with your money.
I’m sure you guys already read this story about who actually started this whole thing. And, of course GeorgeW.Bush tried to fix it 5 years ago but, amazingly, Democrats blocked that measure because it would have stopped poor people from getting into houses they can’t afford.
Better yet, guess who introduced the Federal Housing Enterprise Regulatory Reform Act of 2005, which might have prevented the meltdown of the last day or so? Yep, it was John McCain.
Now, I’m all for strengthening the rules so that these bigwigs can’t bail with their golden parachutes. But don’t even try the “George Bush is over the regulatory agencies” line.
Oh, I know none of this will mean anything to y’all. You’ll just ignore it, like you ignored the fact that Barack Obama has taken money hand over fist from these chislers.
The thing that would have stopped these so-called “poor people” getting houses they couldn’t afford would have been mortgage brokers who checked credit reports, verified employment, asked for downpayments — the way they used to write mortgages as far back as the Clinton administration.
As bad as Freddie Mac and Fannie Mae have been — neither held a gun to anyone’s head to make them write all of this bad paper.
There wouldn’t have been this mortgage crisis if the mortgage brokers had been trained properly, had oversight and not committed fraud against new homeowners.
They were defrauding people, they werent asking for their paperwork, telling them “dont worry we will fill the paperwork out for you”. Many new homeowners didn’t read the “fine print” and did’nt realize the real estate brokers and mortgage brokers working in collusion were raking into millions in commissions for loans they knew the buyer wouldnt be able to afford a year to 18 months into the loan. This was an unregulated ponzi scheme and the brokers made millions on the backs of the poor. Many poor had decent credit, a job and could afford to buy a property. Real estate agents jacked the prices of the homes far beyond their value, then the mortgage companies provided them loans that balooned down the road.
People lost jobs, companies outsourced their jobs. The majority could have afforded the home if they paid a fair mortgage payment.
Why give the brokers a pass and blame it on the victims. Sure there were some people who bought better homes than they could afford, but many were scammed.
Bill Richardson says we are in a depression not seen since the last depression. Ask your grandparents about the big one. They will tell you the same thing happened back then.
“As bad as Freddie Mac and Fannie Mae have been — neither held a gun to anyone’s head to make them write all of this bad paper.”
And no one held a gun to the head of all the folks who bought up these mortgages. You can blame the lenders/banks, since there’s no doubt they’re at fault here, but you’ve also got to blame the folks buying mortgages they had no business buying.
we never didn’t blame them you mental midget.
blame the folks buying mortgages they had no business buying.
If it was just a wave of people welshing on their mortgages, that would be too bad for them and their bank, but it would be over quickly and no big deal.
But noo-o-o…. the stupid bankers had to go and bundle the good loans in with the bad and use the resulting paper to issue layers of wacky derivative instruments. And the Fed and Treasury let them do it. They looked the other way because without the bubble, Bush would have lost in 2004.
And thanks to McCain’s BFF Phil Gramm, this crisis is also bringing down the investment banks and insurance companies.
The problem was the stupid bankers who bundled the bad loans in with the good and used the paper to back up new derivt
It’s the fault of the bankers who
You guys are ridiculous. I am not defending greedy lenders who saw this as a way to make a buck but it was Democrats who insisted that lenders start making loans to people who were “subprime.” That means they would not have qualified under the guidelines you are now saying they should have used. By law, they were required to offer loans to people not qualified or else be penalized.
This mess was started by Democrats and when Republicans tried to rein it in, your people balked and screamed and said there was no problem. Stop trying to shift the blame to somebody else.
This mess was started by Democrats and when Republicans tried to rein it in
Educate us please… how about a link to back up both of those claims.
I am especially interested to hear what was blocking the Republican administration from its oversight duties.
I am not going to go into a ton of detail on this, but there seems to be a lot of misconceptions on how this all got started…
After 9-11 wen the fed lowered the discount rate to near zero there were institutions all over the world which had billions of dollars in cash reserves that needed to be put somewhere. The stock market had just crashed, bonds were not paying a reasonable return…
CDOs had existed for decades. They are a normal and important financial instrument. But the investment firms needed loans to package. They also needed riskier loans – more interest they can pay the various bondholders and the more that they keep fro themselves.
The entire worldwide CDO market ABS/CDS/CDOs was ~$200 Billion in 1996. With the introduction of these ‘synthetic’ securities (the really leveraged ones that are tanking these companies). It was ~ $1.5 Trillion by 2001… It was ~$5 Trillion by 2005…
There were none of these synthetic securities coming from Europe, accounting rules would have prevented them from doing these transactions off-balance sheet. We became ground zero for the issuance of these securities.
The companies needed loans. They needed a ton of them. They needed them fast. Hence the mortgage industry’s lack of standards. They do not write these loans for their intrinsic beauty, they write them to sell to Wall Street. Wall Street did not care what they looked like, they needed something to package and turn around. The entire focus of the marketing was to get people to take out loans they could not afford (that is why they did liar loans with teaser rates in the first place). Billions and billions of dollars were sunk into marketing and a whole new industry rose up of independent brokers to help rake loans to the banks.
All of the additional liquidity in the market was driving increases in ho,e prices – so no one ever needed to be delinquent, they could always refinance and take cash out. The increases in prices also limited downside risk in a foreclosure. Since the risk on paper was low they kept going riskier and riskier.
The parallels to the S+L crisis and the junk bond assets they held is staggering. They took risks knowing the government would be a backstop. Management could walk away if it all blew up. The difference is that these companies that are not regulated are not supposed to get a cent of our money if they fail.
This is a regulatory failure. This is a theft from taxpayers. The mortgage problems were created by insatiable demand to get loans to sell, no matter the quality. It should have never happened.
Ralph Nader called this. Many finance and economics professors called this. This was not a big surprise. Greed drove this and the complete lack of regulation was not a mistake, it is what campaign contributions and lobbyists are for.
Sharon –
You obviously have no understanding of the economics of the industry. If you want to spout partisan nonsense.
Both parties have blood all over their hands. Both parties should be thrown out of government.
That said, it was a Republican Congress and a Republican President when the regulations that were needed were never passed.
Would have been the same with the Dems, but passing the blame like that is absolutely stupid.
This is why they get away with it – all you partisans looking for a finger to point and parrot something someone else said so you feel like you are superior. Reps do it, Dems do it, and no one seems to care about what the truth in the middle is.
Your comment was completely irrelevant. It is childish and ignorant political banter. When did the Republicans try to reign this in exactly?
the complete lack of regulation was not a mistake
Bush used the bubble to win in 2004.
The housing bubble masked the decline in real wages and postponed the inevitable decline in the standard of living.
Wow Sharon,
Go for the distortion. Take your cues from Mr. McSame.
The first article you cite only rails against the clintons (something republithugs LOVE TO DO) but offers no specifics about how he started this whole thing other than to say he asked Fannie and Freddie to open up loans to lower income and diverse homeowners. What it blatantly states is “Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making.”
Yeah, it FORCED lenders to hide documentation and SELL high interest mortgages that people could not afford so that they could keep thier prior profit margin rather than help those in need move ahead a little bit while making less of a profit.
As for you New York Times article you might want to look at the date of 2003 and ask which party controlled both houses of congress and the presidency. Oh, wait that would be the republithugs. So you want to whine that the republithugs could not get something accomplished even though they had control. Wonder if it has something to do with the simple fact that they didn’t know what the word compromise meant. Oh, and in 2003 the republithugs were telling us the economy was fine and dandy so to say they pushed hard for this legislation is a joke.
Oh, and HAGEL was the sponsor of the legislation not McSame. He was a co-sponsor. But it would have done nothing to stop the predatory lending and instead just would have added oversight to Fannie and Freddie at a time when the republithugs said that the economy was fine and there was not a housing mess.
While we are talking about the Bush family let us not forget son Niel. Remember him Silverado savings and loan . You know the mess that was and good old Mcsame involved in the Keating five.
Both political parties are to blame for this mess, but Sharon was correct when she said the following,
“it was Democrats who insisted that lenders start making loans to people who were “subprime.” That means they would not have qualified under the guidelines you are now saying they should have used. By law, they were required to offer loans to people not qualified or else be penalized.”
I have an unfinished post about this whole thing on my blog. Here’s one of the links I use in my post. It’s the text of a 1993 Clinton WH briefing regarding reform of Carter’s 1977 Community Reinvestment Act.
http://clinton6.nara.gov/1993/12/1993-12-08-briefing-by-bentsen-and-rubin.text.html
Read it, you’ll see it validate s exactly what Sharon said above.
There is nothing wrong with making some loans to some sub-prime borrowers, as long as oversight is in place. Let us not forget that most sub-prime borrowers are NOT in default and are living in their homes with their mortgages paid current, and bank shareholders fat on the profits from selling their mortgage.
The Clinton CRA reforms made perfect sense at the time, when the nation was awash in money and real incomes were rising. It was a good policy decision to make sure economic gains reached all levels of society. And they did, as homeownership reached record levels.
But the Bush administration changed the economic environment, with declining real wages, and out-of-control securitization of sub-prime mortgages. That is when regulators should have woken up and responded to the new facts in the economy.
The failure of oversight occurred on Bush’s watch.
The CRA was not about making risky loans to anyone with a social security number (which is what got us where we are today).
The CRA was about a history of redlining and other behaviors by the banking industry that kept minority neighborhoods out of the housing market.
The idea was not to overlook credit and give away money, it was an attempt to put liquidity into an underserved segment of the market.
Those loans are not the problem. The problem was entirely due to the Alt-A and sub-prime mortgages that flooded the market.
The bubble was not created by lending to underserved customers, the people who met the standards for these loans would have been people with thin files or blemishes on their credit.
I do find it funny that we are trying to assign blame to the segment of the market occupied primarily by poor minorities with decent credit when the collapse is mostly white middle class people who became over extended buying cars and electronics and paying for vacations with the equity in their homes.
News Flash – the homes owned by inner city residents and poor rural residents are not worth a whole lot and are a tiny segment of the market Freddie and Fannie served.
The Billions of dollars of Alt-A loand the dems and reps voted to allow Freddie and Fannie to absorb in the beginning of the crisis are a lot of the roblem – another fine piece of corporate welfare from the government. The money moved off the balance sheets of banks and into the GSEs exacly because they were expected to sour.
This whole thing is a fraud. It is a crime.
And let’s all stop blaming Bush by himself… his administration probably had the most reckless economic policy of any president in modern times, but that said, Barney Frank and his pals in Washingtom were right there with him and have been all for the bailouts. We should all be angry, instead we parse sound bites to find some way to blame the other side… you get the government you deserve…
“The Clinton CRA reforms made perfect sense at the time”
Famous last words with regards to a whole plethora of government programs/ideas. “It made perfect sense at the time.”
So Mike W. – I will put you down as one vote to bring back redlining.