Iraq Reverts

[Conan71]

No, it was created by massively borrowing money in an expanding economy to pay for two wars overheating the economy, very lax oversight of investment banks, new rules blurring of lines between traditional banks, investment banks and insurance companies and most importantly the Joe Biden backed and Bush signed revision of bankruptcy laws that removed the shield over personal real estate in bankruptcies. But thanks for trying.

You are aware that the genesis of the derivatives market started around 1980 and really started to expand during the over-heated '90's right?

Nice analysis from those who were actual players in the market:

http://www.pbs.org/wgbh/pages/frontline/warning/themes/derivatives.html

It points to the sort of degenerate gamblers who run Wall Street.

[swake]

You are aware that the genesis of the derivatives market started around 1980 and really started to expand during the over-heated '90's right?

Nice analysis from those who were actual players in the market:

http://www.pbs.org/wgbh/pages/frontline/warning/themes/derivatives.html

It points to the sort of degenerate gamblers who run Wall Street.

I am. But I am also aware that the SEC under Bush considered but declined to regulate or monitor Credit Default Swaps.

[Gaspar]

I am. But I am also aware that the SEC under Bush considered but declined to regulate or monitor Credit Default Swaps.

Yup.

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.

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 againhighlights 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.

[Conan71]

I am. But I am also aware that the SEC under Bush considered but declined to regulate or monitor Credit Default Swaps.

It's long been said they did nothing because it was so complex no one really understood the mechanics of them.  The CFMA of 2000 may have been another reason for lack of action.  One thing is for certain, taking Wall Streeters and putting them into roles which involve monetary policy and regulations for the finance industry is allowing the fox to guard the hen house.  This is a decades-old policy which needs to change.

Back to Clinton's original confession. What was the fuss about? Let's take a look. He revealed that concerning advice from Rubin and Summers on derivatives:

"I think they were wrong and I think I was wrong to take it because the argument on derivatives was that these things are expensive and sophisticated and only a handful of investors will buy them and they don't need any extra protection, and any extra transparency. . .  And the flaw in that argument was that first of all sometimes people with a lot of money make stupid decisions and make it without transparency. . . And secondly, the most important flaw was even if less than 1 percent of the total investment community is involved in derivative exchanges, so much money was involved that if they went bad, they could affect a 100 percent of the investments, and indeed a 100 percent of the citizens in countries."

With these comments, Clinton, however vaguely, seemed to admit he was wrong for signing the Commodities Futures Modernization Act of 2000. It would have been nice if he explicitly apologized to Brooksley Born for not heeding her truly excellent, prescient advice. Among other things, the CFMA blocked the SEC from regulating credit default swaps as securities. And, it forbade the states from enforcing anti-gambling laws against those who bought credit protection without owning the underlying reference obligation.

http://baselinescenario.com/2010/04/20/clinton-rubin-summers-derivatives/

[swake]

Republicans, and especially Libertarians constantly espouse laissez-faire capitalism. "Free the markets, regulation is bad", you hear it all the time. Republicans are STILL wanting less regulation and oversight. It's idiotic and it's what has been pushed by the right since Reagan.

Certainly there was too much regulation in the 70s, but the pendulum swung too far and led to the Great Recession. It's what happened in the Great Depression too but thankfully Bush and Obama did what Hoover didn't and moved to stop the banking system from melting down like what happened in 1929. The main drivers in the 2008 crash were removal of Glass Steagall in 1999, The Bankruptcy Reform Act of 2005 Bush's SEC not regulating Credit Default Swaps and REITs effectively.

[Townsend]

Soooo yeeeaaahh...

There's news in Iraq.  Prob best if you look at BBC.  God knows out national news will be skewed like a motherscratcher.

[Gaspar]

Republicans, and especially Libertarians constantly espouse laissez-faire capitalism. "Free the markets, regulation is bad", you hear it all the time. Republicans are STILL wanting less regulation and oversight. It's idiotic and it's what has been pushed by the right since Reagan.

Certainly there was too much regulation in the 70s, but the pendulum swung too far and led to the Great Recession. It's what happened in the Great Depression too but thankfully Bush and Obama did what Hoover didn't and moved to stop the banking system from melting down like what happened in 1929. The main drivers in the 2008 crash were removal of Glass Steagall in 1999, The Bankruptcy Reform Act of 2005 Bush's SEC not regulating Credit Default Swaps and REITs effectively.

Never a good policy to blame the fly-paper for all of the flies in the house.  Best to find the open door.
Regulation would not have been necessary if government hadn't stepped in and required banks to lend money to people who couldn't afford to pay it back, and then implied that somehow that money would be guaranteed by Fanny/Freddy under some quasi-government banking marriage.

You can't blame people, banks, or builders for taking free money, especially when the government says they have to take it!

Government regulation is almost always a reaction to previous government intervention.

[heironymouspasparagus]

Republicans, and especially Libertarians constantly espouse laissez-faire capitalism. "Free the markets, regulation is bad", you hear it all the time. Republicans are STILL wanting less regulation and oversight. It's idiotic and it's what has been pushed by the right since Reagan.

Certainly there was too much regulation in the 70s, but the pendulum swung too far and led to the Great Recession. It's what happened in the Great Depression too but thankfully Bush and Obama did what Hoover didn't and moved to stop the banking system from melting down like what happened in 1929. The main drivers in the 2008 crash were removal of Glass Steagall in 1999, The Bankruptcy Reform Act of 2005 Bush's SEC not regulating Credit Default Swaps and REITs effectively.

They espouse one thing - capitalism - then put in place another thing - capitalistic monopolism.  Not the same thing at all.  And it's a bad thing!


No, there wasn't too much regulation in the 70's.  That's just a plaintive bleat the RWRE uses to try to somehow convince people that keeping corporate America responsible for their actions - as in "personal responsibility", since corporations have been defined as 'people' - is somehow bad!  Which it is not.

They have been wildly successful at removing many of the barriers to un-throttled "robber-baron-ism" in this country.  The effects are seen in the things you mention such as credit default swaps, all the way to the facts of real income in this country going down for the vast majority over the last 30+ years.  And the lowest incomes have suffered the most with a real drop in income of more than 30% since 1968.

[TheArtist]

Are there no moderators to this forum?

[guido911]

Are there no moderators to this forum?

What's the problem? The, I'll get on it.

[TheArtist]

What's the problem? The, I'll get on it.

Off topic discussion.

[heironymouspasparagus]

Off topic discussion.

Wasn't the Iraq issued solved ?  Iran is gonna take care of it....

[cannon_fodder]

1) the market collapse was because of too much government doing too little.  We subsidize the housing market, we provide a secure secondary market for lenders, and we guarantee the assets of the banks.  If they fail - we pump in billions to save them.  THEN, when it comes time to regulate them the shout comes up about government interference.

Welcome to the 17th richest country in the world, where the goal is to have the most millionaires - middle class be damned.


2). I don't understand how a country that was invaded without a followup plan could possibly be in shambles.  1) step one: invade, destroy infrastructure and social order, disband all security forces and disallow participation of anyone with leadership experience, rebuild artificial line drawn country as a democracy and gtfo as fast as possible.  2) step two:  ?   3) step 3: success.

[Gaspar]

We started evacuating the largest US embassy in the world this weekend as bombs began to fall on the capital city.  The Iraq embassy employs thousands of people, and a staff will remain to keep the embassy operational as non-essential personnel are evacuated. We still have around 3,000 contractors in the country and have moved the aircraft carrier George Bush to provide support for evacuations and possible airstrikes.



President Obama met with his regular crisis team twice this weekend.  On Saturday, the team met at the Sunnylands course (a favorite of retired US presidents), and then on Sunday at the private course of billionaire Larry Ellison, Porcupine Creek, an ultra-exclusive course that caters to the billionaire crowd.  On both days the team (Marvin Nicholson and Joe Paulsen) spent the day playing golf working out a strategy to contain the violence in Iraq and protect American contractors, interests, and the civilian population. According to Golf Digest, Porcupine Creek is one of the best golf courses in the country and an excellent backdrop for high-level talks with Marvin who schedules all of his vacations and golf outings, and Joe who, as his Advance Lead, makes all of the hotel arrangements for the president, his family and the hundreds of secret service staff.

Prior to teeing off, the president met briefly to discuss the crisis with interior designer Michael S. Smith and his partner James Costos.  The president previously appointed Costos, a prominent campaign donor, as a U.S. ambassador to Spain.  There are also rumors that the family is house hunting in the Coachella valley because the president likes the climate and high-end golf culture, and may be using Smith and Costos to aid in their home search. http://www.desertsun.com/story/life/home-garden/2014/06/13/michelle-obama-michael-s-smith-rancho-mirage-couple/10410567/

It is unclear exactly what strategies were discussed in these important meetings, but during these strategic discussions, the rebels began posting photographs of the mass executions of men, women, and children near the capital of Baghdad. Smith and Costos have yet to release any statements regarding the rebel wardrobe or footwear choices presented in these photographs.


http://www.desertsun.com/story/news/world/2014/06/15/iraq-us-qaeda-insurgency/10545803/

As the executions progressed, the president met a number of challenges posed by the exclusive Tim Blixseth designed course.  Each hole (all par 4) is designed after a famous hole from great courses around the world and is intended to force the participant to imagine they are somewhere else.  Of course many of the holes have been altered since Ellison purchased the course, but most don't detract too much from the original intension of the course designer.  Hole 14, for instance, only offers a very slight fairway, and on each side there is a steep drop-off of contrasting desert terrain resembling a long dry riverbed, or mass grave, much like you might find just outside of Baghdad at this very moment.

The ultra-exclusive clubhouse and facilities were sure to delight the first family and keep them occupied during the president's strategy sessions.



When asked about another trip in the midst of another crisis, Obama advisor Valerie Jarrett responded: "I think frankly we've all been through a cold and bitter winter and the bear has cabin fever," "His cabin is a little bit bigger and harder to escape than most."  She added that Obama has fantasized about being "on a beach somewhere drinking out of a coconut" or simply being able to walk out of the White House gate and stroll around unrecognized.
http://news.yahoo.com/obama-longs-break-white-house-bubble-120614293--politics.html

[guido911]

I support Obama's decision to send troops in. Maybe the bombing can now start. Wouldn't it be great if this event resulted in some sort of a detente with Iran?