Occupy Wall Street (1 Viewer)

[guderian]

You guess.

As I said, until they come out with a formal list of demands, issues, proposals, cogent thoughts--all we can do is guess.

 

[guderian]

Oof. I agree with some of their demands, but citing movies isn't going to get them very far.

I'll admit it's a better list than I thought we would get from them. However, it's still not 'formal' yet. If they stick to the Glass-Steagall bit and issues about money in politics (although I think they err by focusing solely on corporate money in politics and not unions, trial lawyers, etc.) and stay away from the stuff that sounds like Obama wrote it, they may make some headway.

 

[TobiasFunke]

As I mentioned, I really agree with their #1 demand--to reinstate Glass Steagall.

They start to lose me here:

USE CONGRESSIONAL AUTHORITY AND OVERSIGHT TO ENSURE APPROPRIATE FEDERAL AGENCIES FULLY INVESTIGATE AND PROSECUTE THE WALL STREET CRIMINALS who clearly broke the law and helped cause the 2008 financial crisis in the following notable cases: (insert list of the most clear cut criminal actions). There is a pretty broad consensus that there is a clear group of people who got away with millions / billions illegally and haven't been brought to justice. Boy would this be long overdue and cathartic for millions of Americans. It would also be a shot across the bow for the financial industry. If you watch the solidly researched and awared winning documentary film "Inside Job" that was narrated by Matt Damon (pretty brave Matt!) and do other research, it wouldn't take long to develop the list.

I'm fine with prosecuting criminal activity, but making money isn't a criminal activity and a documentary narrated by Matt Damon doesn't seem like the place to begin in proving anything. CONGRESS PASS THE BUFFETT RULE ON FAIR TAXATION SO THE RICH AND CORPORATIONS PAY THEIR FAIR SHARE & CLOSE CORPORATE TAX LOOP HOLES AND ENACT A PROHIBITION ON HIDING FUNDS OFF SHORE. No more GE paying zero or negative taxes. Pass the Buffet Rule on fair taxation so the rich pay their fair share. (If we have a really had a good negotiating position and have the place surrounded, we could actually dial up taxes on millionaires, billionaires and corporations even higher...back to what they once were in the 50's and 60's.

We've had this debate before about the rich 'paying their fair share'. This entire proposal seems like it was copied from an Obama speech and goes to show why many tie this protest to the Democrats. As we've discussed, 47% don't pay any federal income taxes, get luxurious government benefits and just voted themselves health care at the expense of the rich. I'm not sure they know what "their fair share" really means.

CONGRESS COMPLETELY REVAMP THE SECURITIES AND EXCHANGE COMMISSION and staff it at all levels with proven professionals who get the job done protecting the integrity of the marketplace so citizens and investors are both protected. This agency needs a large staff and needs to be well-funded. It's currently has a joke of a budget and is run by Wall St. insiders who often leave for high ticket cushy jobs with the corporations they were just regulating. Hmmm.

Staff it with "professionals who get the job done." Sounds like a cotton candy proposal.

CONGRESS PASS SPECIFIC AND EFFECTIVE LAWS LIMITING THE INFLUENCE OF LOBBYISTS AND ELIMINATING THE PRACTICE OF LOBBYISTS WRITING LEGISLATION THAT ENDS UP ON THE FLOOR OF CONGRESS.

CONGRESS PASSING "Revolving Door Legislation" LEGISLATION ELIMINATING THE ABILITY OF FORMER GOVERNMENT REGULATORS GOING TO WORK FOR CORPORATIONS THAT THEY ONCE REGULATED. So, you don't get to work at the FDA for five years playing softball with Pfizer and then go to work for Pfizer making $195,000 a year. While they're at it, Congress should pass specific and effective laws to enforce strict judicial standards of conduct in matters concerning conflicts of interest. So long as judges are culled from the ranks of corporate attorneys the 1% will retain control.

They seem to want to get corporations out of politics but are fine with unions, trial lawyers and other traditional left-wing types in politics.

ELIMINATE "PERSONHOOD" LEGAL STATUS FOR CORPORATIONS. The film "The Corporation" has a great section on how corporations won "personhood status".

I agree with a lot of what you say here, but I think you are either misinformed about the government benefits received by the poor or you and I have very different opinions about what is "luxurious."Also I don't understand your complaint about them wanting corporations out of politics but not lawyers and unions. Their proposal doesn't make much sense but it seems only to be saying that you should avoid conflicts of interest. That's a uniquely corporate issue. Nobody really leaves a union to go to the government and engage in activity arguable benefiting their former union, or leaves government for a particular union that they just enriched while in the government and then gains from that enrichment personally. And as far as trial lawyers go, the analogy doesn't really work at all. Trial lawyers are not really enriched by legislative or administrative decisions in any significant way.

Other than that, I agree with the rest of your post. Citing to a documentary and saying "do that!" is pretty gosh darn stupid. And their SEC complaint is also kind of weird.

 

[guderian]

I agree with a lot of what you say here, but I think you are either misinformed about the government benefits received by the poor or you and I have very different opinions about what is "luxurious."Also I don't understand your complaint about them wanting corporations out of politics but not lawyers and unions. Their proposal doesn't make much sense but it seems only to be saying that you should avoid conflicts of interest. That's a uniquely corporate issue. Nobody really leaves a union to go to the government and engage in activity arguable benefiting their former union, or leaves government for a particular union that they just enriched while in the government and then gains from that enrichment personally. And as far as trial lawyers go, the analogy doesn't really work at all. Trial lawyers are not really enriched by legislative or administrative decisions in any significant way. Other than that, I agree with the rest of your post. Citing to a documentary and saying "do that!" is pretty gosh darn stupid. And their SEC complaint is also kind of weird.

I say "luxurious" because the "Wall Street got bailed out and we got sold out" bit strikes me the wrong way, so I'm being a bit facetious. Wall Street did get bailed out (and repaid much of it), but Main Street got a lot too since the crash--health care, a stimulus, extensive unemployment benefits, etc. and many of them still don't pay federal income taxes. So, this notion of making the rich "pay their fair share" makes me call into question their definition of 'fair'. However, I know we won't settle this debate here.As far as trial lawyers, I do think they benefit tremendously from legislative and executive decisions. Malpractice reform being one example and former Congressman do end up lobbying for unions. I know their beef is with corporations, but their suggestion just leaves a lot of money on the table for traditional Democratic donors and that strikes me as partisan--something they seem to be intent on avoiding. However, I'd love to see them get the money out of politics.

 

[TobiasFunke]

I agree with a lot of what you say here, but I think you are either misinformed about the government benefits received by the poor or you and I have very different opinions about what is "luxurious."Also I don't understand your complaint about them wanting corporations out of politics but not lawyers and unions. Their proposal doesn't make much sense but it seems only to be saying that you should avoid conflicts of interest. That's a uniquely corporate issue. Nobody really leaves a union to go to the government and engage in activity arguable benefiting their former union, or leaves government for a particular union that they just enriched while in the government and then gains from that enrichment personally. And as far as trial lawyers go, the analogy doesn't really work at all. Trial lawyers are not really enriched by legislative or administrative decisions in any significant way. Other than that, I agree with the rest of your post. Citing to a documentary and saying "do that!" is pretty gosh darn stupid. And their SEC complaint is also kind of weird.

I say "luxurious" because the "Wall Street got bailed out and we got sold out" bit strikes me the wrong way, so I'm being a bit facetious. Wall Street did get bailed out (and repaid much of it), but Main Street got a lot too since the crash--health care, a stimulus, extensive unemployment benefits, etc. and many of them still don't pay federal income taxes. So, this notion of making the rich "pay their fair share" makes me call into question their definition of 'fair'. However, I know we won't settle this debate here.As far as trial lawyers, I do think they benefit tremendously from legislative and executive decisions. Malpractice reform being one example and former Congressman do end up lobbying for unions. I know their beef is with corporations, but their suggestion just leaves a lot of money on the table for traditional Democratic donors and that strikes me as partisan--something they seem to be intent on avoiding. However, I'd love to see them get the money out of politics.

Gotcha. I'd take unemployment out of the mix since you can't get it if you didn't pay into it, but otherwise, point taken.99% of what trial lawyers do is regulated by state governments, not the feds. I agree that I'd like to see the money removed, even if that takes a Constitutional Amendment. But I don't think they were complaining about donors, I think they were complaining about direct benefits for former and future employers. There's simply not a lot that a federal government employee can do to benefit a union or a trial lawyer organization in the same way that they can benefit a corporation or particular industry. Sure the NLRB can take action benefitting a particular union and that's a valid concern, but that's about it.

 

[BigSteelThrill]

Can we change the subtitle to "this thing seems to be going away?"

My link

Its currently expanding into new cities across the map, that for sure.

 

[Road Warriors]

I agree with a lot of what you say here, but I think you are either misinformed about the government benefits received by the poor or you and I have very different opinions about what is "luxurious."

Also I don't understand your complaint about them wanting corporations out of politics but not lawyers and unions. Their proposal doesn't make much sense but it seems only to be saying that you should avoid conflicts of interest. That's a uniquely corporate issue. Nobody really leaves a union to go to the government and engage in activity arguable benefiting their former union, or leaves government for a particular union that they just enriched while in the government and then gains from that enrichment personally. And as far as trial lawyers go, the analogy doesn't really work at all. Trial lawyers are not really enriched by legislative or administrative decisions in any significant way.

Other than that, I agree with the rest of your post. Citing to a documentary and saying "do that!" is pretty gosh darn stupid. And their SEC complaint is also kind of weird.

I say "luxurious" because the "Wall Street got bailed out and we got sold out" bit strikes me the wrong way, so I'm being a bit facetious. Wall Street did get bailed out (and repaid much of it), but Main Street got a lot too since the crash--health care, a stimulus, extensive unemployment benefits, etc. and many of them still don't pay federal income taxes. So, this notion of making the rich "pay their fair share" makes me call into question their definition of 'fair'. However, I know we won't settle this debate here.As far as trial lawyers, I do think they benefit tremendously from legislative and executive decisions. Malpractice reform being one example and former Congressman do end up lobbying for unions. I know their beef is with corporations, but their suggestion just leaves a lot of money on the table for traditional Democratic donors and that strikes me as partisan--something they seem to be intent on avoiding.

However, I'd love to see them get the money out of politics.

Gotcha. I'd take unemployment out of the mix since you can't get it if you didn't pay into it, but otherwise, point taken.99% of what trial lawyers do is regulated by state governments, not the feds.

I agree that I'd like to see the money removed, even if that takes a Constitutional Amendment. But I don't think they were complaining about donors, I think they were complaining about direct benefits for former and future employers. There's simply not a lot that a federal government employee can do to benefit a union or a trial lawyer organization in the same way that they can benefit a corporation or particular industry. Sure the NLRB can take action benefitting a particular union and that's a valid concern, but that's about it.

NLRB can and does benefit private unions. Public unions, on the other hand, do create a direct conflict of interest by funding certain candidates that will then directly negotiate public union compensation, although this too is mostly at a state/local level.Getting all special interest money out of politics would be a huge step to having the elected officials be more representative of the voters interests.

 

[Dr. Gobbler]

I'm pretty sure if we made lobbying, lobbyists, PAC's, Super Pac's illegal and punishable by death we could turn this place around pretty quick.

 

[flufhed]

As far as trial lawyers, I do think they benefit tremendously from legislative and executive decisions. Malpractice reform being one example

huh?

 

[SacramentoBob]

Can we change the subtitle to "this thing seems to be going away?"

My link

Its currently expanding into new cities across the map, that for sure.

I'm sure the 14 people who wander in will be the difference makers.

 

[belljr]

Why did you take a loan for 5000 dollars

Protester: because its free money, why wouldnt I

 

[SacramentoBob]

Why did you take a loan for 5000 dollars

Protester: because its free money, why wouldnt I

Seriously?

 

[BigSteelThrill]

Can we change the subtitle to "this thing seems to be going away?"

My link

Its currently expanding into new cities across the map, that for sure.

I'm sure the 14 people who wander in will be the difference makers.

You are completely wrong here. But you know that and just want to ridicule to make yourself feel better.

 

[belljr]

Why did you take a loan for 5000 dollars

Protester: because its free money, why wouldnt I

Seriously?

was listening to O&A, they were playing clips of interviews, may not be exact but was along those lines

 

[SacramentoBob]

Why did you take a loan for 5000 dollars

Protester: because its free money, why wouldnt I

Seriously?

was listening to O&A, they were playing clips of interviews, may not be exact but was along those lines

Love the fact that these guys are getting raked over the coals by the 99% they claim to represent.

 

[Neofight]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

Might as well say that if Wall Street hadn't screwed everything up, no one would be protesting wall street right now.

Your "it's all Wall Street's fault" narrative has driven policy for the past 3 years and here we are. Perhaps it's now time to consider the alternative narrative...

Wall Street's Gullible Occupiers

The protesters have been sold a bill of goods. Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.

By PETER J. WALLISON

There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.

Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis.

Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30%. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations HUD raised the quota to 50% by 2000 and 55% by 2007.

It is certainly possible to find prime borrowers among people with incomes below the median. But when more than half of the mortgages Fannie and Freddie were required to buy were required to have that characteristic, these two government-sponsored enterprises had to significantly reduce their underwriting standards.

Fannie and Freddie were not the only government-backed or government-controlled organizations that were enlisted in this process. The Federal Housing Administration was competing with Fannie and Freddie for the same mortgages. And thanks to rules adopted in 1995 under the Community Reinvestment Act, regulated banks as well as savings and loan associations had to make a certain number of loans to borrowers who were at or below 80% of the median income in the areas they served.

Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments.

Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution. Thus it is clear where the demand for these deficient mortgages came from.

The huge government investment in subprime mortgages achieved its purpose. Home ownership in the U.S. increased to 69% from 65% (where it had been for 30 years). But it also led to the biggest housing bubble in American history. This bubble, which lasted from 1997 to 2007, also created a huge private market for mortgage-backed securities (MBS) based on pools of subprime loans.

As housing bubbles grow, rising prices suppress delinquencies and defaults. People who could not meet their mortgage obligations could refinance or sell, because their houses were now worth more.

Accordingly, by the mid-2000s, investors had begun to notice that securities based on subprime mortgages were producing the high yields, but not showing the large number of defaults, that are usually associated with subprime loans. This triggered strong investor demand for these securities, causing the growth of the first significant private market for MBS based on subprime and other risky mortgages.

By 2008, Mr. Pinto has shown, this market consisted of about 7.8 million subprime loans, somewhat less than one-third of the 27 million that were then outstanding. The private financial sector must certainly share some blame for the financial crisis, but it cannot fairly be accused of causing that crisis when only a small minority of subprime and other risky mortgages outstanding in 2008 were the result of that private activity.

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default, driving down housing prices throughout the U.S. and throwing Fannie and Freddie into insolvency. Seeing these sudden losses, investors fled from the market for privately issued MBS, and mark-to-market accounting required banks and others to write down the value of their mortgage-backed assets to the distress levels in a market that now had few buyers. This raised questions about the solvency and liquidity of the largest financial institutions and began a period of great investor anxiety.

The government's rescue of Bear Stearns in March 2008 temporarily calmed the market. But it created significant moral hazard: Market participants were led to believe that the government would rescue all large financial institutions. When Lehman Brothers was allowed to fail in September, investors panicked. They withdrew their funds from the institutions that held large amounts of privately issued MBS, causing banks and others—such as investment banks, finance companies and insurers—to hoard cash against the risk of further withdrawals. Their refusal to lend to one another in these conditions froze credit markets, bringing on what we now call the financial crisis.

The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.

That 70% in bold seems ridiculously high:

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

[*]More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

[*]Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

[*]Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

It's also true that as the bubble grew larger, Fannie and Freddie's stake in the securitization of these mortagtes actually decreased:

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.

My linkMore odd than all these discrepancies in the numbers is the fact that your article mentions defaults 3 separate times but never mentions what those rates were at any of the GSE's, much less the private banks. Do you have those numbers available to you? Care to guess if the GSE's were higher or lower than the TBTF's?

All of this completely glosses over the fact that it was the private lending institutions that were not only loaning the money in the first place, but also creating the instruments of self destruction by finding creative new ways to package and sell them while running leverage ratios equaling who the hell really knows what. That's a cute trick.

ETA: Chart of Top Subprime Serving Institutions in 2008

 

[jamny]

They blew it. This will never amount to anything. I wanted to support them but they waited too long to get a coherent message across and now they are co-opted by too many different groups.

 

[Neofight]

They blew it. This will never amount to anything. I wanted to support them but they waited too long to get a coherent message across and now they are co-opted by too many different groups.

Apathy is the new empathy.

 

[davidbostonsbicepsfan]

The unaccountable are still by my office.

 

[BigSteelThrill]

I wanted to support them

Sure you did. Your favorite jabroni Glen Beck told you they would kill you.

 

[DrJ]

I agree with a lot of what you say here, but I think you are either misinformed about the government benefits received by the poor or you and I have very different opinions about what is "luxurious."Also I don't understand your complaint about them wanting corporations out of politics but not lawyers and unions. Their proposal doesn't make much sense but it seems only to be saying that you should avoid conflicts of interest. That's a uniquely corporate issue. Nobody really leaves a union to go to the government and engage in activity arguable benefiting their former union, or leaves government for a particular union that they just enriched while in the government and then gains from that enrichment personally. And as far as trial lawyers go, the analogy doesn't really work at all. Trial lawyers are not really enriched by legislative or administrative decisions in any significant way. Other than that, I agree with the rest of your post. Citing to a documentary and saying "do that!" is pretty gosh darn stupid. And their SEC complaint is also kind of weird.

I say "luxurious" because the "Wall Street got bailed out and we got sold out" bit strikes me the wrong way, so I'm being a bit facetious. Wall Street did get bailed out (and repaid much of it), but Main Street got a lot too since the crash--health care, a stimulus, extensive unemployment benefits, etc. and many of them still don't pay federal income taxes. So, this notion of making the rich "pay their fair share" makes me call into question their definition of 'fair'. However, I know we won't settle this debate here.As far as trial lawyers, I do think they benefit tremendously from legislative and executive decisions. Malpractice reform being one example and former Congressman do end up lobbying for unions. I know their beef is with corporations, but their suggestion just leaves a lot of money on the table for traditional Democratic donors and that strikes me as partisan--something they seem to be intent on avoiding. However, I'd love to see them get the money out of politics.

Gotcha. I'd take unemployment out of the mix since you can't get it if you didn't pay into it, but otherwise, point taken.99% of what trial lawyers do is regulated by state governments, not the feds. I agree that I'd like to see the money removed, even if that takes a Constitutional Amendment. But I don't think they were complaining about donors, I think they were complaining about direct benefits for former and future employers. There's simply not a lot that a federal government employee can do to benefit a union or a trial lawyer organization in the same way that they can benefit a corporation or particular industry. Sure the NLRB can take action benefitting a particular union and that's a valid concern, but that's about it.

You can't take unemployment out of the mix entirely, because it was significantly expanded beyond what people were paying in to receive.

 

[jamny]

I wanted to support them

Sure you did. Your favorite jabroni Glen Beck told you they would kill you.

You clearly know me very well. I haven't heard anything from Beck since his show was cancelled. I seriously did feel this was a much needed reaction to what's going on. Some of the early complaints were right on point. I hoped to support it, but it has lost me. But feel free to go ahead and assume that because I liked Glenn Beck when he was on that I only think one way.

 

[bueno]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

 

[Jojo the circus boy]

Well, things just keep getting easier and easier for the Repulicans. George Soros's insider trading conviction just got upheld. Sure, it's a ridiculous conviction, but it's going to kill Obama and the Dems come election time when the Republicans point out how much money Soros is funneling to Democrats and Democratic causes and that he's not only part of "Wall Street", but as a convicted insider trader, he's the very evil they're protesting!

http://www.reuters.com/article/2011/10/13/us-wallstreet-protests-origins-idUSTRE79C1YN20111013?feedType=RSS&feedName=topNews&rpc=71

 

[ericttspikes]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Why is CEO pay back to where it was pre-collapse? Up over 50% in the last two years.

 

[urbanhack]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

bull-#### to both of your statements.

 

[Neofight]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.

Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.

Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Do you even try any longer? The rich don't make money in this economy? Relative to the salaries bankers received during the collapse years of '06 & '07 (when they were busy doing the most damage in the subprime market), I suppose you have a modest point. But let's be honest for a moment: a 26% pay hike is not exactly hitting the skids.According to Bloomberg Markets, pay rose even for CEO's when a company's results weren't so hot. 

The big pay hikes for bank and asset management CEOs were awarded amid flat or sinking 2010 share prices. [Larry] Fink [the highest paid finance CEO of all, at BlackRock Capital], Blankfein, Dimon, Morgan Stanley CEO James Gorman and [bryant] Moynihan of Bank of America all made Bloomberg Markets’ list of financial executives who provided the least shareholder value in 2010.

 

[bueno]

This thing looks like Spiderman's PJ's, so I'll keep this brief and retire for the evening. Suffice to say we have different opinions of what it would mean to break up the banks that are too big to fail. I see it as a positive thing if the commercial side was kept separate from the investment side. It just makes sense. As does a partnership requirement as per what was mentioned earlier in the thread. The real big players that the US banks would compete with would still be European banks like UBS, not any Canadian Banks (who should be commended for coming away from the subprime crisis largely unscathed). Look where UBS is now? Do you think they are in any greater position than our restructured mega-banks would be after having to eliminate nearly 20,000 jobs and instituting a new payment structure that significantly pared down pay, stock incentives and variable compensation? Ask Peter Kurer.I also believe credit needs to be approached in a more rational manner and come under control for individual consumers as well as corporations and governments. People are slowly waking up to this. I'll leave the predictions for the future to others, but I can see some big changes coming in this regard. Technology and the internet, if left uncontrolled by corporate interests, will go a long way towards this... we'll see.

Thank gods that dog's breakfast is gone!What suffices to say, is that I think you lack an international perspective as to what breaking up our banks would mean to our ability to compete in global credit markets. This is perfectly clear, as you don't realize what a large player the Bank of Montreal is in the international markets. i wasn't referring to the home mortgage business. No offense really. Most Americans lack that perspective.One could argue, and I would agree, that breaking out Merrill Lynch from Bank of America (i.e. getting banks out of the financial adviser/broker business) might be a net positive, but I'm not sure that would be sufficient to prevent another derivative bubble. Still, Bank of America would be too big to fail. So what else would you do? Maybe Slapdash can weigh in on that. However, if you weaken our banks, then you will see more branches of HSBC, Scotia Bank, UBS, etc. take their place in the niches our banks are forced to abandon. You will be other banks surpass ours in the global investment banking industry. And yes, I think UBS will be stronger for the reorganization that they are going through now. I also don't believe you have the perspective as to what getting our banks out of the investment market would do to their ability to compete in the world market with regard to investing in capital projects rather than just lending money. As to personal credit, beware of unintended consequences. Putting a cap on credit card interest will have farther-reaching negative effects than you think it does.

Fácil tigre! I did not know you were French. I wasn't really limiting my scope to the mortgage markets, amigo, but if you say so...Just so the class understands; you are talking about BMO, yes? The third largest bank in all of the empire of Canadia? With something on the order of $400 billion (with a "B") in total assets? This is who you fear for the sake of our little ol' banks? Isn't the RBC something like twice the size of BMO? Why not worry about them? Didn't they almost get swallowed by RBC before those Socialists up north stepped in and they had to settle for a merged credit processing solution in Moneris? Perhaps this behemoth is what we should all be up late at night worrying about!Honestly man, this is tripe. I went so far as to ask my buddy David V., who not only has boatloads but also experience in int. finance, if your suppositions held any weight and he basically asked why I was bothering him with this Bank of Montreal nonsense (full disclosure: the man is from Toronto, so maybe it's a civic pride/rivalry thing). He is a good deal smarter than me (and possibly even as smart as you, though doubtful). When pressed he offered that you were either fear mongering or perhaps had some other reason to be fearful, but either way were "talking out of someplace other than his mouth." I offered that you could be fishing but that one went over his head. He did text me later though with a thought to share with you: "Tell him to hide all his money... if they actually go through with it!"... Perhaps he would fit right in around here.So which is it: are you BS-ing or are the hippies getting to you?

Well, seeing as you don't want to be civil anymore,Nobody is fearing them (BMO). I'm saying that if you break up our banks (like maybe divide them in half), then they won't be able to compete as well with bigger banks in foreign countries. I have plenty of buddies in int. finance myself. You knowing David V. doe snot impress me. Where'd you get that name anyway? Off of LinkedIn?

It's the hippies, isn't it? They've got you sweating just a little bit, no Bueno?I didn't give you a full name, but I just looked on my iPhone for it. I also have video on that same phone from his retirement party in June, when Gates gave a roast and Chris Isaak played a few sets. David was hoping for the Black Crowes, but they weren't available. Bummer, but Isaak is a great performer. I'll tell D to mind his P's and Q's.

Well, hobnobbing with the evil 1% (Gates) doesn't impress me much.However, this was about breaking up banks that are "too big to fail." If BMO were a US bank, it would certainly be in that category. So if we break up our banks to the point where they are too big to fail, they would of necessity be smaller than BMO. So using that bank as an example of superior financial strength should we break up our banks is legitimate.I see that like a typical "progressive" yopu begin to cast aspersions on my knowledge or intelligence or character when you are losing an argument. As if I am so bad that whatever expertise I have is irredeemably tainted by my depravity. Well, wrong again.

 

[bueno]

I agree with a lot of what you say here, but I think you are either misinformed about the government benefits received by the poor or you and I have very different opinions about what is "luxurious."Also I don't understand your complaint about them wanting corporations out of politics but not lawyers and unions. Their proposal doesn't make much sense but it seems only to be saying that you should avoid conflicts of interest. That's a uniquely corporate issue. Nobody really leaves a union to go to the government and engage in activity arguable benefiting their former union, or leaves government for a particular union that they just enriched while in the government and then gains from that enrichment personally. And as far as trial lawyers go, the analogy doesn't really work at all. Trial lawyers are not really enriched by legislative or administrative decisions in any significant way. Other than that, I agree with the rest of your post. Citing to a documentary and saying "do that!" is pretty gosh darn stupid. And their SEC complaint is also kind of weird.

I say "luxurious" because the "Wall Street got bailed out and we got sold out" bit strikes me the wrong way, so I'm being a bit facetious. Wall Street did get bailed out (and repaid much of it), but Main Street got a lot too since the crash--health care, a stimulus, extensive unemployment benefits, etc. and many of them still don't pay federal income taxes. So, this notion of making the rich "pay their fair share" makes me call into question their definition of 'fair'. However, I know we won't settle this debate here.As far as trial lawyers, I do think they benefit tremendously from legislative and executive decisions. Malpractice reform being one example and former Congressman do end up lobbying for unions. I know their beef is with corporations, but their suggestion just leaves a lot of money on the table for traditional Democratic donors and that strikes me as partisan--something they seem to be intent on avoiding. However, I'd love to see them get the money out of politics.

Obama/RNC raised $70 million in the third quarter. Not sure how you can get the money out of politics.

 

[bueno]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.

Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.

Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Do you even try any longer? The rich don't make money in this economy? Relative to the salaries bankers received during the collapse years of '06 & '07 (when they were busy doing the most damage in the subprime market), I suppose you have a modest point. But let's be honest for a moment: a 26% pay hike is not exactly hitting the skids.According to Bloomberg Markets, pay rose even for CEO's when a company's results weren't so hot.

The big pay hikes for bank and asset management CEOs were awarded amid flat or sinking 2010 share prices. [Larry] Fink [the highest paid finance CEO of all, at BlackRock Capital], Blankfein, Dimon, Morgan Stanley CEO James Gorman and [bryant] Moynihan of Bank of America all made Bloomberg Markets' list of financial executives who provided the least shareholder value in 2010.

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

 

[Idiot Boxer]

Well this settles it. Banks must be truly evil.

http://www.charlotteobserver.com/2011/10/12/2684280/bofa-to-reimburse-gay-employees.html

 

[Neofight]

This thing looks like Spiderman's PJ's, so I'll keep this brief and retire for the evening. Suffice to say we have different opinions of what it would mean to break up the banks that are too big to fail. I see it as a positive thing if the commercial side was kept separate from the investment side. It just makes sense. As does a partnership requirement as per what was mentioned earlier in the thread. The real big players that the US banks would compete with would still be European banks like UBS, not any Canadian Banks (who should be commended for coming away from the subprime crisis largely unscathed). Look where UBS is now? Do you think they are in any greater position than our restructured mega-banks would be after having to eliminate nearly 20,000 jobs and instituting a new payment structure that significantly pared down pay, stock incentives and variable compensation? Ask Peter Kurer.I also believe credit needs to be approached in a more rational manner and come under control for individual consumers as well as corporations and governments. People are slowly waking up to this. I'll leave the predictions for the future to others, but I can see some big changes coming in this regard. Technology and the internet, if left uncontrolled by corporate interests, will go a long way towards this... we'll see.

Thank gods that dog's breakfast is gone!What suffices to say, is that I think you lack an international perspective as to what breaking up our banks would mean to our ability to compete in global credit markets. This is perfectly clear, as you don't realize what a large player the Bank of Montreal is in the international markets. i wasn't referring to the home mortgage business. No offense really. Most Americans lack that perspective.One could argue, and I would agree, that breaking out Merrill Lynch from Bank of America (i.e. getting banks out of the financial adviser/broker business) might be a net positive, but I'm not sure that would be sufficient to prevent another derivative bubble. Still, Bank of America would be too big to fail. So what else would you do? Maybe Slapdash can weigh in on that. However, if you weaken our banks, then you will see more branches of HSBC, Scotia Bank, UBS, etc. take their place in the niches our banks are forced to abandon. You will be other banks surpass ours in the global investment banking industry. And yes, I think UBS will be stronger for the reorganization that they are going through now. I also don't believe you have the perspective as to what getting our banks out of the investment market would do to their ability to compete in the world market with regard to investing in capital projects rather than just lending money. As to personal credit, beware of unintended consequences. Putting a cap on credit card interest will have farther-reaching negative effects than you think it does.

Fácil tigre! I did not know you were French. I wasn't really limiting my scope to the mortgage markets, amigo, but if you say so...Just so the class understands; you are talking about BMO, yes? The third largest bank in all of the empire of Canadia? With something on the order of $400 billion (with a "B") in total assets? This is who you fear for the sake of our little ol' banks? Isn't the RBC something like twice the size of BMO? Why not worry about them? Didn't they almost get swallowed by RBC before those Socialists up north stepped in and they had to settle for a merged credit processing solution in Moneris? Perhaps this behemoth is what we should all be up late at night worrying about!Honestly man, this is tripe. I went so far as to ask my buddy David V., who not only has boatloads but also experience in int. finance, if your suppositions held any weight and he basically asked why I was bothering him with this Bank of Montreal nonsense (full disclosure: the man is from Toronto, so maybe it's a civic pride/rivalry thing). He is a good deal smarter than me (and possibly even as smart as you, though doubtful). When pressed he offered that you were either fear mongering or perhaps had some other reason to be fearful, but either way were "talking out of someplace other than his mouth." I offered that you could be fishing but that one went over his head. He did text me later though with a thought to share with you: "Tell him to hide all his money... if they actually go through with it!"... Perhaps he would fit right in around here.So which is it: are you BS-ing or are the hippies getting to you?

Well, seeing as you don't want to be civil anymore,Nobody is fearing them (BMO). I'm saying that if you break up our banks (like maybe divide them in half), then they won't be able to compete as well with bigger banks in foreign countries. I have plenty of buddies in int. finance myself. You knowing David V. doe snot impress me. Where'd you get that name anyway? Off of LinkedIn?

It's the hippies, isn't it? They've got you sweating just a little bit, no Bueno?I didn't give you a full name, but I just looked on my iPhone for it. I also have video on that same phone from his retirement party in June, when Gates gave a roast and Chris Isaak played a few sets. David was hoping for the Black Crowes, but they weren't available. Bummer, but Isaak is a great performer. I'll tell D to mind his P's and Q's.

Well, hobnobbing with the evil 1% (Gates) doesn't impress me much.However, this was about breaking up banks that are "too big to fail." If BMO were a US bank, it would certainly be in that category. So if we break up our banks to the point where they are too big to fail, they would of necessity be smaller than BMO. So using that bank as an example of superior financial strength should we break up our banks is legitimate.I see that like a typical "progressive" yopu begin to cast aspersions on my knowledge or intelligence or character when you are losing an argument. As if I am so bad that whatever expertise I have is irredeemably tainted by my depravity. Well, wrong again.

I adore unintentional irony. Gates is the greatest philanthropist the world has ever known. His father was behind the WA State initiative to raise the taxes on the rich. It is not about hating people who have money, it's about obliterating the myth that the right has held so sacred that Greed is Good. Read my sig for the single most defining statement on this issue. For someone who started in on the condescension in this thread before I related to you my colleagues thoughts on the matter, you do seem a bit overly sensitive. I understand you've had it rough around here over the last few weeks - and I would also point to your resolution for people dumping waste in your water (as if the entire stream is yours and yours alone) with a baseball bat as indicative of your level of civility - but if anyone is casting aspersions on your knowledge, character, intelligence or anything else it is you, amigo.

 

[Neofight]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.

Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.

Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Do you even try any longer? The rich don't make money in this economy? Relative to the salaries bankers received during the collapse years of '06 & '07 (when they were busy doing the most damage in the subprime market), I suppose you have a modest point. But let's be honest for a moment: a 26% pay hike is not exactly hitting the skids.According to Bloomberg Markets, pay rose even for CEO's when a company's results weren't so hot.

The big pay hikes for bank and asset management CEOs were awarded amid flat or sinking 2010 share prices. [Larry] Fink [the highest paid finance CEO of all, at BlackRock Capital], Blankfein, Dimon, Morgan Stanley CEO James Gorman and [bryant] Moynihan of Bank of America all made Bloomberg Markets' list of financial executives who provided the least shareholder value in 2010.

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

Really, you don't say. What are those taxed at again?

 

[bueno]

This thing looks like Spiderman's PJ's, so I'll keep this brief and retire for the evening. Suffice to say we have different opinions of what it would mean to break up the banks that are too big to fail. I see it as a positive thing if the commercial side was kept separate from the investment side. It just makes sense. As does a partnership requirement as per what was mentioned earlier in the thread. The real big players that the US banks would compete with would still be European banks like UBS, not any Canadian Banks (who should be commended for coming away from the subprime crisis largely unscathed). Look where UBS is now? Do you think they are in any greater position than our restructured mega-banks would be after having to eliminate nearly 20,000 jobs and instituting a new payment structure that significantly pared down pay, stock incentives and variable compensation? Ask Peter Kurer.I also believe credit needs to be approached in a more rational manner and come under control for individual consumers as well as corporations and governments. People are slowly waking up to this. I'll leave the predictions for the future to others, but I can see some big changes coming in this regard. Technology and the internet, if left uncontrolled by corporate interests, will go a long way towards this... we'll see.

Thank gods that dog's breakfast is gone!What suffices to say, is that I think you lack an international perspective as to what breaking up our banks would mean to our ability to compete in global credit markets. This is perfectly clear, as you don't realize what a large player the Bank of Montreal is in the international markets. i wasn't referring to the home mortgage business. No offense really. Most Americans lack that perspective.One could argue, and I would agree, that breaking out Merrill Lynch from Bank of America (i.e. getting banks out of the financial adviser/broker business) might be a net positive, but I'm not sure that would be sufficient to prevent another derivative bubble. Still, Bank of America would be too big to fail. So what else would you do? Maybe Slapdash can weigh in on that. However, if you weaken our banks, then you will see more branches of HSBC, Scotia Bank, UBS, etc. take their place in the niches our banks are forced to abandon. You will be other banks surpass ours in the global investment banking industry. And yes, I think UBS will be stronger for the reorganization that they are going through now. I also don't believe you have the perspective as to what getting our banks out of the investment market would do to their ability to compete in the world market with regard to investing in capital projects rather than just lending money. As to personal credit, beware of unintended consequences. Putting a cap on credit card interest will have farther-reaching negative effects than you think it does.

Fácil tigre! I did not know you were French. I wasn't really limiting my scope to the mortgage markets, amigo, but if you say so...Just so the class understands; you are talking about BMO, yes? The third largest bank in all of the empire of Canadia? With something on the order of $400 billion (with a "B") in total assets? This is who you fear for the sake of our little ol' banks? Isn't the RBC something like twice the size of BMO? Why not worry about them? Didn't they almost get swallowed by RBC before those Socialists up north stepped in and they had to settle for a merged credit processing solution in Moneris? Perhaps this behemoth is what we should all be up late at night worrying about!Honestly man, this is tripe. I went so far as to ask my buddy David V., who not only has boatloads but also experience in int. finance, if your suppositions held any weight and he basically asked why I was bothering him with this Bank of Montreal nonsense (full disclosure: the man is from Toronto, so maybe it's a civic pride/rivalry thing). He is a good deal smarter than me (and possibly even as smart as you, though doubtful). When pressed he offered that you were either fear mongering or perhaps had some other reason to be fearful, but either way were "talking out of someplace other than his mouth." I offered that you could be fishing but that one went over his head. He did text me later though with a thought to share with you: "Tell him to hide all his money... if they actually go through with it!"... Perhaps he would fit right in around here.So which is it: are you BS-ing or are the hippies getting to you?

Well, seeing as you don't want to be civil anymore,Nobody is fearing them (BMO). I'm saying that if you break up our banks (like maybe divide them in half), then they won't be able to compete as well with bigger banks in foreign countries. I have plenty of buddies in int. finance myself. You knowing David V. doe snot impress me. Where'd you get that name anyway? Off of LinkedIn?

It's the hippies, isn't it? They've got you sweating just a little bit, no Bueno?I didn't give you a full name, but I just looked on my iPhone for it. I also have video on that same phone from his retirement party in June, when Gates gave a roast and Chris Isaak played a few sets. David was hoping for the Black Crowes, but they weren't available. Bummer, but Isaak is a great performer. I'll tell D to mind his P's and Q's.

Well, hobnobbing with the evil 1% (Gates) doesn't impress me much.However, this was about breaking up banks that are "too big to fail." If BMO were a US bank, it would certainly be in that category. So if we break up our banks to the point where they are too big to fail, they would of necessity be smaller than BMO. So using that bank as an example of superior financial strength should we break up our banks is legitimate.I see that like a typical "progressive" yopu begin to cast aspersions on my knowledge or intelligence or character when you are losing an argument. As if I am so bad that whatever expertise I have is irredeemably tainted by my depravity. Well, wrong again.

I adore unintentional irony. Gates is the greatest philanthropist the world has ever known. His father was behind the WA State initiative to raise the taxes on the rich. It is not about hating people who have money, it's about obliterating the myth that the right has held so sacred that Greed is Good. Read my sig for the single most defining statement on this issue. For someone who started in on the condescension in this thread before I related to you my colleagues thoughts on the matter, you do seem a bit overly sensitive. I understand you've had it rough around here over the last few weeks - and I would also point to your resolution for people dumping waste in your water (as if the entire stream is yours and yours alone) with a baseball bat as indicative of your level of civility - but if anyone is casting aspersions on your knowledge, character, intelligence or anything else it is you, amigo.

I live in Washington. I know all about Gates, thank you. You think that someone who took someone else's stuff, conned IBM into a monopolistic relationship and is absolutely paranoid that another company might challenge is monopoly is not part of the 1% because he is charitable? Gates is part of the 1%. I don't think he is evil for it, because I don't think the 1% as a group are evil.

 

[bueno]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.

Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.

Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Do you even try any longer? The rich don't make money in this economy? Relative to the salaries bankers received during the collapse years of '06 & '07 (when they were busy doing the most damage in the subprime market), I suppose you have a modest point. But let's be honest for a moment: a 26% pay hike is not exactly hitting the skids.According to Bloomberg Markets, pay rose even for CEO's when a company's results weren't so hot.

The big pay hikes for bank and asset management CEOs were awarded amid flat or sinking 2010 share prices. [Larry] Fink [the highest paid finance CEO of all, at BlackRock Capital], Blankfein, Dimon, Morgan Stanley CEO James Gorman and [bryant] Moynihan of Bank of America all made Bloomberg Markets' list of financial executives who provided the least shareholder value in 2010.

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

Really, you don't say. What are those taxed at again?

15%,, just like my capital gains. The salary is taxed at much higher rates, assuming no deductions. Give me capital gains over salary any time. I'll make more money when the economy is good. Which is the point. Bank and asset management CEOs got raises to compensate for their loss of capital gains revenue, which meant they were not doing as well in the present economy. They have every reason to want a healthy economy because that is where the money is made.

 

[bonesman]

Citing to a documentary and saying "do that!" is pretty gosh darn stupid.

Straw man.... at least you had the decency to refer to it as a documentary rather than a "movie" though. Still, saying that they are saying "do that!" when citing those documentary films is pretty gosh darn stupid.

 

[James Daulton]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

I also don't think that either Wall Street or the '1%' prefer this type of an economy nor are they intentionally pushing for legislation to keep the economy stalled. The disconnect between the growing economy that everyone seems to want and where we are seems to lie elsewhere.

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.

Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.

Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Do you even try any longer? The rich don't make money in this economy? Relative to the salaries bankers received during the collapse years of '06 & '07 (when they were busy doing the most damage in the subprime market), I suppose you have a modest point. But let's be honest for a moment: a 26% pay hike is not exactly hitting the skids.According to Bloomberg Markets, pay rose even for CEO's when a company's results weren't so hot.

The big pay hikes for bank and asset management CEOs were awarded amid flat or sinking 2010 share prices. [Larry] Fink [the highest paid finance CEO of all, at BlackRock Capital], Blankfein, Dimon, Morgan Stanley CEO James Gorman and [bryant] Moynihan of Bank of America all made Bloomberg Markets' list of financial executives who provided the least shareholder value in 2010.

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

Really, you don't say. What are those taxed at again?

15%,, just like my capital gains. The salary is taxed at much higher rates, assuming no deductions. Give me capital gains over salary any time. I'll make more money when the economy is good. Which is the point. Bank and asset management CEOs got raises to compensate for their loss of capital gains revenue, which meant they were not doing as well in the present economy. They have every reason to want a healthy economy because that is where the money is made.

So they get paid no matter what? Good deal for them.

 

[Maurile Tremblay]

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

Really, you don't say. What are those taxed at again?

15%,, just like my capital gains. The salary is taxed at much higher rates, assuming no deductions. Give me capital gains over salary any time.

It's effectively more like 30%, similar to salary.Inflation is generally about 3% per year, and the average return on invested capital is around 6% per year. If you have $10 worth of capital gains, you typically have only $5 of additional purchasing power — of real (as opposed to nominal) income. A 15% tax on $10 is really a 30% on $5.That's just the average, though. Really smart (or lucky) investors earn much better than 6%, so their effective capital gains tax rate is much lower than 30%. Really stupid (or unlucky) investors, however, are effectively paying much more than 30%.

 

[Neofight]

This thing looks like Spiderman's PJ's, so I'll keep this brief and retire for the evening. Suffice to say we have different opinions of what it would mean to break up the banks that are too big to fail. I see it as a positive thing if the commercial side was kept separate from the investment side. It just makes sense. As does a partnership requirement as per what was mentioned earlier in the thread. The real big players that the US banks would compete with would still be European banks like UBS, not any Canadian Banks (who should be commended for coming away from the subprime crisis largely unscathed). Look where UBS is now? Do you think they are in any greater position than our restructured mega-banks would be after having to eliminate nearly 20,000 jobs and instituting a new payment structure that significantly pared down pay, stock incentives and variable compensation? Ask Peter Kurer.I also believe credit needs to be approached in a more rational manner and come under control for individual consumers as well as corporations and governments. People are slowly waking up to this. I'll leave the predictions for the future to others, but I can see some big changes coming in this regard. Technology and the internet, if left uncontrolled by corporate interests, will go a long way towards this... we'll see.

Thank gods that dog's breakfast is gone!What suffices to say, is that I think you lack an international perspective as to what breaking up our banks would mean to our ability to compete in global credit markets. This is perfectly clear, as you don't realize what a large player the Bank of Montreal is in the international markets. i wasn't referring to the home mortgage business. No offense really. Most Americans lack that perspective.One could argue, and I would agree, that breaking out Merrill Lynch from Bank of America (i.e. getting banks out of the financial adviser/broker business) might be a net positive, but I'm not sure that would be sufficient to prevent another derivative bubble. Still, Bank of America would be too big to fail. So what else would you do? Maybe Slapdash can weigh in on that. However, if you weaken our banks, then you will see more branches of HSBC, Scotia Bank, UBS, etc. take their place in the niches our banks are forced to abandon. You will be other banks surpass ours in the global investment banking industry. And yes, I think UBS will be stronger for the reorganization that they are going through now. I also don't believe you have the perspective as to what getting our banks out of the investment market would do to their ability to compete in the world market with regard to investing in capital projects rather than just lending money. As to personal credit, beware of unintended consequences. Putting a cap on credit card interest will have farther-reaching negative effects than you think it does.

Fácil tigre! I did not know you were French. I wasn't really limiting my scope to the mortgage markets, amigo, but if you say so...Just so the class understands; you are talking about BMO, yes? The third largest bank in all of the empire of Canadia? With something on the order of $400 billion (with a "B") in total assets? This is who you fear for the sake of our little ol' banks? Isn't the RBC something like twice the size of BMO? Why not worry about them? Didn't they almost get swallowed by RBC before those Socialists up north stepped in and they had to settle for a merged credit processing solution in Moneris? Perhaps this behemoth is what we should all be up late at night worrying about!Honestly man, this is tripe. I went so far as to ask my buddy David V., who not only has boatloads but also experience in int. finance, if your suppositions held any weight and he basically asked why I was bothering him with this Bank of Montreal nonsense (full disclosure: the man is from Toronto, so maybe it's a civic pride/rivalry thing). He is a good deal smarter than me (and possibly even as smart as you, though doubtful). When pressed he offered that you were either fear mongering or perhaps had some other reason to be fearful, but either way were "talking out of someplace other than his mouth." I offered that you could be fishing but that one went over his head. He did text me later though with a thought to share with you: "Tell him to hide all his money... if they actually go through with it!"... Perhaps he would fit right in around here.So which is it: are you BS-ing or are the hippies getting to you?

Well, seeing as you don't want to be civil anymore,Nobody is fearing them (BMO). I'm saying that if you break up our banks (like maybe divide them in half), then they won't be able to compete as well with bigger banks in foreign countries. I have plenty of buddies in int. finance myself. You knowing David V. doe snot impress me. Where'd you get that name anyway? Off of LinkedIn?

It's the hippies, isn't it? They've got you sweating just a little bit, no Bueno?I didn't give you a full name, but I just looked on my iPhone for it. I also have video on that same phone from his retirement party in June, when Gates gave a roast and Chris Isaak played a few sets. David was hoping for the Black Crowes, but they weren't available. Bummer, but Isaak is a great performer. I'll tell D to mind his P's and Q's.

Well, hobnobbing with the evil 1% (Gates) doesn't impress me much.However, this was about breaking up banks that are "too big to fail." If BMO were a US bank, it would certainly be in that category. So if we break up our banks to the point where they are too big to fail, they would of necessity be smaller than BMO. So using that bank as an example of superior financial strength should we break up our banks is legitimate.I see that like a typical "progressive" yopu begin to cast aspersions on my knowledge or intelligence or character when you are losing an argument. As if I am so bad that whatever expertise I have is irredeemably tainted by my depravity. Well, wrong again.

I adore unintentional irony. Gates is the greatest philanthropist the world has ever known. His father was behind the WA State initiative to raise the taxes on the rich. It is not about hating people who have money, it's about obliterating the myth that the right has held so sacred that Greed is Good. Read my sig for the single most defining statement on this issue. For someone who started in on the condescension in this thread before I related to you my colleagues thoughts on the matter, you do seem a bit overly sensitive. I understand you've had it rough around here over the last few weeks - and I would also point to your resolution for people dumping waste in your water (as if the entire stream is yours and yours alone) with a baseball bat as indicative of your level of civility - but if anyone is casting aspersions on your knowledge, character, intelligence or anything else it is you, amigo.

I live in Washington. I know all about Gates, thank you. You think that someone who took someone else's stuff, conned IBM into a monopolistic relationship and is absolutely paranoid that another company might challenge is monopoly is not part of the 1% because he is charitable? Gates is part of the 1%. I don't think he is evil for it, because I don't think the 1% as a group are evil.

For someone who doesn't think the 1% is evil you have a strange way of characterizing its most philanthropic member. Gates is not just part of the 1%, he could employ most of the rest of them. Dimon could be his caddy and Blankfein his daughter's Hunter & Jumper trainer for all I care, that's not the point. You seem to have a hard time following this, but I am not the one who is typing the number "1" followed by "%" with the word "evil" close by. That again is you, my friend.And it must be me you are addressing because you are responding to my post and we have already determined that you do not sweat (or perspire) the dirty masses.

 

[bueno]

It's all political. One party doesn't want the economy to be "humming along" currently for partisan reasons. There are plenty of things Congress could be doing but aren't. It's all about power and greed.

It doesn't take much to see that America has been pillaged and a massive transfer of wealth has occurred. That didn't happen by accident. The rules are written by the people with the most money and influence to further rig the game and make more money. Not sure what is too hard to understand about that. Seems like the only argument against the protesters is that they should be smarter and work harder to grab all that cash back and push the pendulum back in their favor, and I suppose that is what the uproar is about and maybe the protests are the first steps in doing just that.

Consumers in the end hold more power than either government or private industry. Consumers have been given the task of propping up the economy AND paying the bill for bailing out failing industries. Maybe these protests are signs that some people are waking up from the manufactured reality of consumerism. We simply don't need a majority of the crap that is being sold. If the "job creators" don't think hiring people is in their best interest, they shouldn't be shocked when consumers stop buying their crap. And if the right wants to promote austerity and job contraction, then it shouldn't be a surprise when consumers stay home and save money instead. Like it or not, we are all in this together. If one small group of people wants a majority of the wealth so be it. The consequences of that will play itself out one way or another.

And I'm not sure why it's hard to understand that driving the economy into the ground would serve the interests of anyone.

Who's driving it into the ground? Certainly not the "hippies" and "unwashed" people at the protests. You can't get blood from a stone. The "haves" appear not to care too much about the "have nots". They have the cash and can isolate themselves from the rest of America if they want. The 1 percenters really aren't even truly American, they are globalists who work, play and live with their own class all over the world. They don't go to Target, shop for groceries, worry about their mortgage, etc. They've carved out their own little world to themselves. I do agree that the people who hold the wealth in this country are shortsighted when it comes to the future of America and the American consumer, but greed will do that to a person. No real reason to care about the future when you believe you have enough cash to live anywhere on the planet. Generational wealth is powerful. Most of these people really do have enough money to live well for at least the entirety of their lives, and most have enough money to keep their families living well for generations.

Why should a guy like Jamie Dimon really give a crap about the future? He makes more money an hour than most people make in a year. More power to him. Guys like him want more and more, and make sure the rules are in place to get more and more. To them, I believe, they simply don't see or understand the consequences of unbridled greed. More importantly they probably don't give a crap.

The government drove the economy into the ground. The rich don't make money when the economy is in the situation it is in today.

Do you even try any longer? The rich don't make money in this economy? Relative to the salaries bankers received during the collapse years of '06 & '07 (when they were busy doing the most damage in the subprime market), I suppose you have a modest point. But let's be honest for a moment: a 26% pay hike is not exactly hitting the skids.According to Bloomberg Markets, pay rose even for CEO's when a company's results weren't so hot.

The big pay hikes for bank and asset management CEOs were awarded amid flat or sinking 2010 share prices. [Larry] Fink [the highest paid finance CEO of all, at BlackRock Capital], Blankfein, Dimon, Morgan Stanley CEO James Gorman and [bryant] Moynihan of Bank of America all made Bloomberg Markets' list of financial executives who provided the least shareholder value in 2010.

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

Really, you don't say. What are those taxed at again?

15%,, just like my capital gains. The salary is taxed at much higher rates, assuming no deductions. Give me capital gains over salary any time. I'll make more money when the economy is good. Which is the point. Bank and asset management CEOs got raises to compensate for their loss of capital gains revenue, which meant they were not doing as well in the present economy. They have every reason to want a healthy economy because that is where the money is made.

So they get paid no matter what? Good deal for them.

They don't get paid as much and salaries are subject to a higher tax rate than capital gains.

 

[bueno]

Salary is only a minor part of your income when you are rich. Capital gains is far larger.

Really, you don't say. What are those taxed at again?

15%,, just like my capital gains. The salary is taxed at much higher rates, assuming no deductions. Give me capital gains over salary any time.

It's effectively more like 30%, similar to salary.Inflation is generally about 3% per year, and the average return on invested capital is around 6% per year. If you have $10 worth of capital gains, you typically have only $5 of additional purchasing power — of real (as opposed to nominal) income. A 15% tax on $10 is really a 30% on $5.That's just the average, though. Really smart (or lucky) investors earn much better than 6%, so their effective capital gains tax rate is much lower than 30%. Really stupid (or unlucky) investors, however, are effectively paying much more than 30%.

Come on Maurile, dollars are subject to inflation whether they come from salary or capital gains.And if you can't do better than 6% return during a bull market, you need to consider other investment vehicles.

 

[guderian]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

Might as well say that if Wall Street hadn't screwed everything up, no one would be protesting wall street right now.

Your "it's all Wall Street's fault" narrative has driven policy for the past 3 years and here we are. Perhaps it's now time to consider the alternative narrative...

Wall Street's Gullible Occupiers

The protesters have been sold a bill of goods. Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.

By PETER J. WALLISON

There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.

Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis.

Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30%. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations HUD raised the quota to 50% by 2000 and 55% by 2007.

It is certainly possible to find prime borrowers among people with incomes below the median. But when more than half of the mortgages Fannie and Freddie were required to buy were required to have that characteristic, these two government-sponsored enterprises had to significantly reduce their underwriting standards.

Fannie and Freddie were not the only government-backed or government-controlled organizations that were enlisted in this process. The Federal Housing Administration was competing with Fannie and Freddie for the same mortgages. And thanks to rules adopted in 1995 under the Community Reinvestment Act, regulated banks as well as savings and loan associations had to make a certain number of loans to borrowers who were at or below 80% of the median income in the areas they served.

Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments.

Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution. Thus it is clear where the demand for these deficient mortgages came from.

The huge government investment in subprime mortgages achieved its purpose. Home ownership in the U.S. increased to 69% from 65% (where it had been for 30 years). But it also led to the biggest housing bubble in American history. This bubble, which lasted from 1997 to 2007, also created a huge private market for mortgage-backed securities (MBS) based on pools of subprime loans.

As housing bubbles grow, rising prices suppress delinquencies and defaults. People who could not meet their mortgage obligations could refinance or sell, because their houses were now worth more.

Accordingly, by the mid-2000s, investors had begun to notice that securities based on subprime mortgages were producing the high yields, but not showing the large number of defaults, that are usually associated with subprime loans. This triggered strong investor demand for these securities, causing the growth of the first significant private market for MBS based on subprime and other risky mortgages.

By 2008, Mr. Pinto has shown, this market consisted of about 7.8 million subprime loans, somewhat less than one-third of the 27 million that were then outstanding. The private financial sector must certainly share some blame for the financial crisis, but it cannot fairly be accused of causing that crisis when only a small minority of subprime and other risky mortgages outstanding in 2008 were the result of that private activity.

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default, driving down housing prices throughout the U.S. and throwing Fannie and Freddie into insolvency. Seeing these sudden losses, investors fled from the market for privately issued MBS, and mark-to-market accounting required banks and others to write down the value of their mortgage-backed assets to the distress levels in a market that now had few buyers. This raised questions about the solvency and liquidity of the largest financial institutions and began a period of great investor anxiety.

The government's rescue of Bear Stearns in March 2008 temporarily calmed the market. But it created significant moral hazard: Market participants were led to believe that the government would rescue all large financial institutions. When Lehman Brothers was allowed to fail in September, investors panicked. They withdrew their funds from the institutions that held large amounts of privately issued MBS, causing banks and others—such as investment banks, finance companies and insurers—to hoard cash against the risk of further withdrawals. Their refusal to lend to one another in these conditions froze credit markets, bringing on what we now call the financial crisis.

The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.

That 70% in bold seems ridiculously high:

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

[*]More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

[*]Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

[*]Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

It's also true that as the bubble grew larger, Fannie and Freddie's stake in the securitization of these mortagtes actually decreased:

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.

My linkMore odd than all these discrepancies in the numbers is the fact that your article mentions defaults 3 separate times but never mentions what those rates were at any of the GSE's, much less the private banks. Do you have those numbers available to you? Care to guess if the GSE's were higher or lower than the TBTF's?

All of this completely glosses over the fact that it was the private lending institutions that were not only loaning the money in the first place, but also creating the instruments of self destruction by finding creative new ways to package and sell them while running leverage ratios equaling who the hell really knows what. That's a cute trick.

ETA: Chart of Top Subprime Serving Institutions in 2008

So it's just a coincidence that after 100+ years of mortgage lending by banks that sub-prime and other credit challenged lending started to explode at exactly the same time that the federal government was mandating Fannie and Freddie to start significantly increase their lending to such credits? I'm not absolving the banks of some culpability, but pointing out that the factors leading to the collapse in 2008 were catalyzed by the government and their role in this has been completely swept aside. Where is the Dodd-Frank legislation directed at the government's role in this? No. Those in the government that were largely responsible got to put their name on that legislation. It's like the government telling a trillion dollar agency that half of what they buy has to be red teddy bears. Guess what's going to happen to the market for red teddy bears???

 

[Maurile Tremblay]

Come on Maurile, dollars are subject to inflation whether they come from salary or capital gains.

When you receive a salary, it's 100% real income. A $2,000 paycheck gives you $2,000 of additional purchasing power you previously lacked.Not so with capital gains.If you buy a house for $100,000, and twenty years later you sell it for $200,000 because between those years the government inflated the currency, what have you gained that you should be taxed on? Your $200,000 doesn't buy you any more stuff than the $100,000 you started with would have bought twenty years ago. That's not income; that's the government lying about your income by measuring your wealth in smaller dollars.Of course, in real life assets typically appreciate faster than inflation. But not a lot faster. The lower tax rate on capital gains roughly compensates for part of the income not being real. (Undercompensates in some years, overcompensates in other years. It would make more sense to simply adjust purchase price for inflation and charge the normal rate on the real gain. But that would require Congress to show a little intelligence.)

 

[Neofight]

As much as they try to say this is about the 1%, corporate greed or whatever--I think that if we were humming along at 3+% GDP growth with sub 7% unemployment like we should at this stage of a recovery, no one would be trying to occupy anything.

Might as well say that if Wall Street hadn't screwed everything up, no one would be protesting wall street right now.

Your "it's all Wall Street's fault" narrative has driven policy for the past 3 years and here we are. Perhaps it's now time to consider the alternative narrative...

Wall Street's Gullible Occupiers

The protesters have been sold a bill of goods. Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.

By PETER J. WALLISON

There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.

Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis.

Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30%. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations HUD raised the quota to 50% by 2000 and 55% by 2007.

It is certainly possible to find prime borrowers among people with incomes below the median. But when more than half of the mortgages Fannie and Freddie were required to buy were required to have that characteristic, these two government-sponsored enterprises had to significantly reduce their underwriting standards.

Fannie and Freddie were not the only government-backed or government-controlled organizations that were enlisted in this process. The Federal Housing Administration was competing with Fannie and Freddie for the same mortgages. And thanks to rules adopted in 1995 under the Community Reinvestment Act, regulated banks as well as savings and loan associations had to make a certain number of loans to borrowers who were at or below 80% of the median income in the areas they served.

Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments.

Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution. Thus it is clear where the demand for these deficient mortgages came from.

The huge government investment in subprime mortgages achieved its purpose. Home ownership in the U.S. increased to 69% from 65% (where it had been for 30 years). But it also led to the biggest housing bubble in American history. This bubble, which lasted from 1997 to 2007, also created a huge private market for mortgage-backed securities (MBS) based on pools of subprime loans.

As housing bubbles grow, rising prices suppress delinquencies and defaults. People who could not meet their mortgage obligations could refinance or sell, because their houses were now worth more.

Accordingly, by the mid-2000s, investors had begun to notice that securities based on subprime mortgages were producing the high yields, but not showing the large number of defaults, that are usually associated with subprime loans. This triggered strong investor demand for these securities, causing the growth of the first significant private market for MBS based on subprime and other risky mortgages.

By 2008, Mr. Pinto has shown, this market consisted of about 7.8 million subprime loans, somewhat less than one-third of the 27 million that were then outstanding. The private financial sector must certainly share some blame for the financial crisis, but it cannot fairly be accused of causing that crisis when only a small minority of subprime and other risky mortgages outstanding in 2008 were the result of that private activity.

When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default, driving down housing prices throughout the U.S. and throwing Fannie and Freddie into insolvency. Seeing these sudden losses, investors fled from the market for privately issued MBS, and mark-to-market accounting required banks and others to write down the value of their mortgage-backed assets to the distress levels in a market that now had few buyers. This raised questions about the solvency and liquidity of the largest financial institutions and began a period of great investor anxiety.

The government's rescue of Bear Stearns in March 2008 temporarily calmed the market. But it created significant moral hazard: Market participants were led to believe that the government would rescue all large financial institutions. When Lehman Brothers was allowed to fail in September, investors panicked. They withdrew their funds from the institutions that held large amounts of privately issued MBS, causing banks and others—such as investment banks, finance companies and insurers—to hoard cash against the risk of further withdrawals. Their refusal to lend to one another in these conditions froze credit markets, bringing on what we now call the financial crisis.

The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.

That 70% in bold seems ridiculously high:

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

[*]More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

[*]Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

[*]Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

It's also true that as the bubble grew larger, Fannie and Freddie's stake in the securitization of these mortagtes actually decreased:

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.

My linkMore odd than all these discrepancies in the numbers is the fact that your article mentions defaults 3 separate times but never mentions what those rates were at any of the GSE's, much less the private banks. Do you have those numbers available to you? Care to guess if the GSE's were higher or lower than the TBTF's?

All of this completely glosses over the fact that it was the private lending institutions that were not only loaning the money in the first place, but also creating the instruments of self destruction by finding creative new ways to package and sell them while running leverage ratios equaling who the hell really knows what. That's a cute trick.

ETA: Chart of Top Subprime Serving Institutions in 2008

So it's just a coincidence that after 100+ years of mortgage lending by banks that sub-prime and other credit challenged lending started to explode at exactly the same time that the federal government was mandating Fannie and Freddie to start significantly increase their lending to such credits? I'm not absolving the banks of some culpability, but pointing out that the factors leading to the collapse in 2008 were catalyzed by the government and their role in this has been completely swept aside. Where is the Dodd-Frank legislation directed at the government's role in this? No. Those in the government that were largely responsible got to put their name on that legislation. It's like the government telling a trillion dollar agency that half of what they buy has to be red teddy bears. Guess what's going to happen to the market for red teddy bears???

You don't deny the banks originated those loans? You don't deny they underwrote them? What about the true percentage of subprimes held by the banks at the time of the collapse? What were those default rates? Who was securitizing the majority of these loans during the boom years? Did you even peruse the article?There is no coincidence: something happened in '99 that lead many to predict this outcome, and it wasn't Clinton's "mandate", which actually occurred in '92. How is that "exactly the same time", exactly?

 

[guderian]

You don't deny the banks originated those loans? You don't deny they underwrote them? What about the true percentage of subprimes held by the banks at the time of the collapse? What were those default rates? Who was securitizing the majority of these loans during the boom years? Did you even peruse the article?

There is no coincidence: something happened in '99 that lead many to predict this outcome, and it wasn't Clinton's "mandate", which actually occurred in '92. How is that "exactly the same time", exactly?

Hell no, I don't deny that banks and other lenders originated those loans. That's not the purpose of Freddie or Fannie. They guarantee them, securitize them and own them. I stopped reading the article when their primary argument was based on statistics of loans that were "issued". All of those firms listed in the articles only started "issuing" them because they could flip them to Fannie and Freddie. That created the bull market in sub-prime securities that ended up attracting "Wall Street" and a whole gaggle of lenders and originators. Look at trading in the market for treasuries if you doubt the impact that the government can have on a market like that. The Federal Reserve driven bull market in treasuries has attracted a lot of other investors because it's the only place to make money these days. So when that market collapses you can't look at statistics that say that the Federal Reserve isn't largely responsible because it only owned a minority of treasuries at the time of collapse. This is what happened in 1999:

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

 

[Neofight]

You don't deny the banks originated those loans? You don't deny they underwrote them? What about the true percentage of subprimes held by the banks at the time of the collapse? What were those default rates? Who was securitizing the majority of these loans during the boom years? Did you even peruse the article?

There is no coincidence: something happened in '99 that lead many to predict this outcome, and it wasn't Clinton's "mandate", which actually occurred in '92. How is that "exactly the same time", exactly?

Hell no, I don't deny that banks and other lenders originated those loans. That's not the purpose of Freddie or Fannie. They guarantee them, securitize them and own them. I stopped reading the article when their primary argument was based on statistics of loans that were "issued". All of those firms listed in the articles only started "issuing" them because they could flip them to Fannie and Freddie. That created the bull market in sub-prime securities that ended up attracting "Wall Street" and a whole gaggle of lenders and originators. Look at trading in the market for treasuries if you doubt the impact that the government can have on a market like that. The Federal Reserve driven bull market in treasuries has attracted a lot of other investors because it's the only place to make money these days. So when that market collapses you can't look at statistics that say that the Federal Reserve isn't largely responsible because it only owned a minority of treasuries at the time of collapse. This is what happened in 1999:

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

Yet, as I've stated twice now, F&F were both holding and securitizing fewer loans at the height of the bubble. The number was on a steady downward trend from 1999. And their default rates were lower (in some cases much lower) on those they did hold. How do you account for that?And again, this doesn't even take into account the exotic instruments and absurd tranching going on at the TBTF's, where nobody had a clue what was in their paper trifle. Then there's the leveraging. And on and on.

So the banks had some predatory practices in lending (through no mandate), extremely poor underwriting practices (of which BofA has been the biggest MBS underwriter), took over the bulk of securitizing after they created new and more complex instruments (this is where they became too greedy for their own good. Or ours for that matter) and held far more of these bad mortgages which then defaulted at a higher rate. But the GSE's and the loans to minorities were at the heart of this? Not only does your article not effectively make that case, it actually argues it against it at certain points. Either way, it is hardly conclusive in regards to the GSE's precipitating a collapse.

 

[urbanhack]

Has anyone seen this? http://english.aljazeera.net/programmes/meltdown/

 

[guderian]

Yet, as I've stated twice now, F&F were both holding and securitizing fewer loans at the height of the bubble. The number was on a steady downward trend from 1999. And their default rates were lower (in some cases much lower) on those they did hold. How do you account for that?

And again, this doesn't even take into account the exotic instruments and absurd tranching going on at the TBTF's, where nobody had a clue what was in their paper trifle. Then there's the leveraging. And on and on.

So the banks had some predatory practices in lending (through no mandate), extremely poor underwriting practices (of which BofA has been the biggest MBS underwriter), took over the bulk of securitizing after they created new and more complex instruments (this is where they became too greedy for their own good. Or ours for that matter) and held far more of these bad mortgages which then defaulted at a higher rate. But the GSE's and the loans to minorities were at the heart of this? Not only does your article not effectively make that case, it actually argues it against it at certain points. Either way, it is hardly conclusive in regards to the GSE's precipitating a collapse.

I addressed the point about Fannie and Freddie holding a smaller percentage of the market at the height of the bubble. By initially creating a huge bull market in subprime that attracted the other investors. No doubt that the people making money selling mortgages to Fannie and Freddie attracted people to the market. So you can't say "hey look, yeah they bought huge amounts of these things by political mandate, but when the #### finally hit the fan, their percentage of a hugely booming market they created had declined." If they weren't creating a bull market and making people rich, no one else would have gone to that market. It's not like banks all of a sudden woke up and said "hey, let's start making ####ty loans" at the same time that Fannie and Freddie were mandated to make ####ty loans.

 

[bueno]

The other issue Neophyte is ignoring is that if the banks didn't compete for those high risk loans, it would affect their bottom line, which would affect their stock price relative to their competitors. You know what would have happened to those CEOs that wouldn't compete? They would be invited to work elsewhere. The government created the environment in which the banks had to compete for high interest loans or die.

 

[Neofight]

Yet, as I've stated twice now, F&F were both holding and securitizing fewer loans at the height of the bubble. The number was on a steady downward trend from 1999. And their default rates were lower (in some cases much lower) on those they did hold. How do you account for that?

And again, this doesn't even take into account the exotic instruments and absurd tranching going on at the TBTF's, where nobody had a clue what was in their paper trifle. Then there's the leveraging. And on and on.

So the banks had some predatory practices in lending (through no mandate), extremely poor underwriting practices (of which BofA has been the biggest MBS underwriter), took over the bulk of securitizing after they created new and more complex instruments (this is where they became too greedy for their own good. Or ours for that matter) and held far more of these bad mortgages which then defaulted at a higher rate. But the GSE's and the loans to minorities were at the heart of this? Not only does your article not effectively make that case, it actually argues it against it at certain points. Either way, it is hardly conclusive in regards to the GSE's precipitating a collapse.

I addressed the point about Fannie and Freddie holding a smaller percentage of the market at the height of the bubble. By initially creating a huge bull market in subprime that attracted the other investors. No doubt that the people making money selling mortgages to Fannie and Freddie attracted people to the market. So you can't say "hey look, yeah they bought huge amounts of these things by political mandate, but when the #### finally hit the fan, their percentage of a hugely booming market they created had declined." If they weren't creating a bull market and making people rich, no one else would have gone to that market. It's not like banks all of a sudden woke up and said "hey, let's start making ####ty loans" at the same time that Fannie and Freddie were mandated to make ####ty loans.

I thought we addressed the reality that Fannie and Freddy don't make loans:

Hell no, I don't deny that banks and other lenders originated those loans. That's not the purpose of Freddie or Fannie. They guarantee them, securitize them and own them. I stopped reading the article when their primary argument was based on statistics of loans that were "issued".

You were right about that fact, but wrong that the primary focus of the article was based on loan origination. Once more, the number of loans on the GSE's books and that they were guaranteeing and securitizing was dropping from year to year, starting at the point from which you claim the problem arose. Unfortunately for you the article went on to list these facts and reference them. Perhaps you shouldn't have stopped reading. You really haven't addressed this at all; you've merely ignored it. The banks took it upon themselves to make those loans, undewrite them, securitize them and lose track of what was in those packages. There was no bull market created by Fannie and Freddy, just a lot bull#### going on the books of banks.