What would YOU say to the Oversight Committee if YOU were asked??

[ivan3]

TARP, once the Fed figured out that it was far easier to backstop (recapitalize) the `at risk TBTF's than it was to try to actually scarf up the `toxic assets' it pretty much did the job of preserving the overall stability of the system. Not sure that `all' of the money will be paid back, but most has. TARP was the inevitable, reactionary response created by the lack of Oversight (not `regulation') pure and simple. When you hear the politicians talk about too much `regulation' what is usually meant (financial system) is too much `oversight'. Sort of like beating one's chest and calling for a moratorium on earmarks. `Moratorium', i.e., `quit just long enough that the voters go back to watching American Idol instead of us then back to greasing the wheels.'

Now comes Rep. Bachus, of Alabama, the incoming Chairman of the House Committee on Financial Services. Visit the Committee page. Why is the HCFS Committee page (comprised of both Rep/Dem) pushing the Chairman's Rep. agenda? Each member has their own page and can tout any position they like. Placing the `bad dems and their bad financial law' on the Main Committee Page is unethical (just more cheap grandstanding to this writer): http://financialservices.house.gov/

Now, one of Goldman Sach's `associates' who maintained an office in their building, packaged up one of those `issues' that crashed the system (he ended up paying a half a billion dollar fine):
The Complaint: http://www.sec.gov/litigation/litreleases/2010/lr21489.htm
The Decision: http://www.sec.gov/news/press/2010/2010-123.htm

Basically, he knew that many of the chickens in the `truck' (the `bond') that was sold to investors, was full of altA and other no doc, sick (mortgages) `chickens'. He then created his own `product' that would increase in value if all the chickens in the truck started dying before reaching the store (maturity). This is known as a Synthetic CDO - for purposes of cutting through the argot: he was making book on the fighter he'd promoted, as being unbeatable (set very good odds on winning), as being a sure loser. He got pinned by the SEC because he didn't mention to his investors that he knew the fighter would tank/chooks would collapse.

Chairman Bachus complained about Obama Admin.s trying to use Goldman & friends to `capitalize' a Chi town bank (rightly so).: http://www.businessweek.com/news/2010-05-19/ge-goldman-rescue-of-chicago-lender-sparks-republican-outcry.html

However, now that Bachus is in the Catbird Seat he's in bed with Goldman. Sending off letters complaining about stifling innovation in financial products (doesn't want the oversight as in opening the books on the betting parlor):
http://www.businessweek.com/news/20...shareholders-competitiveness-bachus-says.html

An example of Goldman's whining: http://dealbook.nytimes.com/2011/01/17/goldman-limits-facebook-investment-to-foreign-clients/?src=mv


I'd suggest reading a bit of testimony from the recently completed Financial Crisis Inquiry Commission: http://www.fcic.gov/
If you want a good overview (from a former trader at Bear Stearns who saw the crash coming and made a billion - did try to warn both his buddies and the gov) : Testimony before the FCIC 1/10: http://www.fcic.gov/hearings/pdfs/2010-0113-Bass.pdf

Everyone has the right to be a greedy pig. But our refusal to prevent or make transparent ALL lobbying (every instance with every congress person should be online within 48hr. of the mtg/copies of literature/etc. on their webpage) gives unfair advantage to certain citizens/corp. over others. Not performing adequate oversight allows the lobbying to be translated into our paying for their privilege.
It wasn't the `bad mortgages' in and of themselves, it was the AMPLIFICATION of the risk created by folks who packaged up those `chickens', rated those passels of Chickens `triple A, can't lose! Buy some for the pension funds!, sold insurance on those passels' health without having any money to pay claims on the insurance and, who pretty much do nothing but make money to make money (a nice skill, but my garbage man is more valuable) and weren't required `oh, horrible regulation!' to either post collateral on their paper or be examined for their threat and the potential risk to you and me.

Read up on CITI's memo about the `plutonomy'. Both political parties are mere tools.

ed:clarity

 

[Dunkopf]

Quote:
I believe they should have had to take their medicine, like big boys. Remember the saying,"If you can't do the time, don't do the crime."?

That includes the bankers, the Wall Streeters, and the financial fixers, in the orginizations , like Fannie Mae and Freddie Mac....BTW, whoever thought up those stupid names, needs to be sent up, too, just for general principle.

I also believe that General Motors should have taken the same medicine...Here's an anology, which I came up with, last night.

First, what has happened in the unions, is the same thing, which the govt. has done with the Social Security fund.[I'm not abbreviating, because this thread belongs to an Australian girl, who told us to keep it simple.] They took money, which had a dedicated purpose, but it just looked so available. After all, it wasn't being used, right now. Why not put it to use? Namely, the retirement fund. They have used it, to push their socialist union agenda.

So, here's the anology on the bailout: Remember that car, which you purchased, new, back in 1985? Remember that it had, say, $200 built into the cost, to fund union retirements?...Well, guess what, suckers? We want another $500, for that same car, because we didn't handle the money, properly, which you gave us, the first time.
Seriously, why should we, as a nation, throw good money after bad...Those cars, during the 80's, were pieces of garbage, anyway.

Everyone should take their medicine. I don't want to take their medicine though. I don't know how I would have been affected if the banks failed. I have a suspicion we would be in a lot worse place now. Maybe not.

Yes. Detroit put out some real junk from around 73 to 89. they were trying to conform to new safety and emission standards and it was a learning curve for them. The Japanese cars were a good incentive for them. They had never made small cars with low gas consumption and it took a while to catch up. No matter what you do with a carburetor you can't get good emissions.

Had nothing to do with unions. Unions are the reason we have a 40 hour work week and safe working conditions. They're also the reason we have a middle class. Have you noticed the middle class is going away? You might have also noticed that only 16% of companies have unions now as opposed to around 48% before Reagan. The income disparity gap is also much larger now. Unions have died a natural death as will the middle class.

There will always be a middle class. It will be a lot smaller starting around 2008.

 

[Royd]

Had nothing to do with unions. Unions are the reason we have a 40 hour work week and safe working conditions. They're also the reason we have a middle class. Have you noticed the middle class is going away? You might have also noticed that only 16% of companies have unions now as opposed to around 48% before Reagan. The income disparity gap is also much larger now. Unions have died a natural death as will the middle class.

There will always be a middle class. It will be a lot smaller starting around 2008.

I will give unions their due, but not their dues.

Admittedly, they upped the saftey regs, but I tell you, it has gotten out of hand. I was on a job, today, on King's Bay Sub base, installing some metal window jambs in a metal stud wall, on a second floor...The area around the stairs was not secured and we had to wear these stupid saftey harnesses, attached to a cable, which ran the length of the room...Talk about an inconvenience and a time killer.

I digress. Instead of settling for good enough, i.e. safe hours and a decent wage and retirement, the upper echelon: those greedy, money grubbers, which you hate, figured they could get that much richer, if they could force more companies into union contracts... At that point, they had killed the goose, which laid the golden egg...They cut their own throats...They didn't know when to leave well enough alone. You get the point.

When a union overruns a private company, which has built its fortune by the sweat of its brow, and then, encourages work slowdowns, or as I have recently learned, called job actions, as per the botched snow removal in NYC, that company , if it wants to stay alive and prosper, has no choice but to seek its labor force somewhere else, thus ending the very jobs, which the union, so cleverly, thought belonged to them.

ETA: You didn't answer why you think its the public's obligation to bail out a union's retirement, when the money was squandered on political shenanegans, instead of being permanently set aside, for its dedicated purpose.​

 

[Talihofarms]

Unions are an issue.
And just like the dinasour I see a day where they too will be extinct.

If you look at the history of Union industries and how long they last, here in the United States,.
You can see every unionized industry leaving to another country.
We have lost the leed in Manufacturing, textiles, steel,coal ..............now the auto industry is almost finished.


For those interested in History and Government bail outs, you can look at the removal of the gold standard.
The growth of government spending.
If you are printing nothing more than paper, and there is nothing to back that paper,
there is a point where you print nothing more than pretty toilet paper.
I can get into a long winded debate, but lets just look at the countries with the largest gold reserves.
For those who don't know, it is............ India and China.................
You may be horified to find out which countries own a large portion of our debt.
Which also happen to be the fastest growing countries with the fastest growing industries.
Do you think they are Unionized?


Food for Thought

 

[Spookwriter]

Has there any goverment committee in the last several years
that actually did work? Why am I not surprised how TARP turned
out for middle America?

I am surprised that people keep electing the same career politicians
time after time. It's past time for people to wake up and pay attention.

WHO made it posssible for the banks/wall street to fail at such a level
to rape the American people? And why? What has been done to correct
the issue?

Fannie, Freddie and Wall Street managed to be a sucessful for many years.
Anyone have an ideal of what caused their failure?

 

[ivan3]

Spookwriter wrote: Has there any goverment committee in the last several years that actually did work? Why am I not surprised how TARP turned out for middle America?

Committees often do very good work.
TARP as of 6/10: Outlays: 398 billion, paid back: $198 billion, Outstanding balance: $203 billion (GM, et al - mostly banks and AIG). The new Law has capped any further spending - $450 billion total. What the new LAW doesn't do is prevent banks from trading against their assets and the Repubs want to keep it that way (one of the main reasons we are posting here was just this refusal to `interfere' with the `free market').

Really need to read info. from the FCIC material in my previous post.

Paulson should have simply given a three month guarantee to back ALL Asset Backed Securities (let the investment banks, etc. figure out what trash they were holding and deal with it) instead of waiting nearly a month to let Congress screw around as Rome burned. TARP evened out the collapse: No TARP? GM and Suppliers? Gone. Goldman Sachs? Gone (nearly went anyway but Buffet used 5 billion to squeeze them good). BOA, CITI? Gone. Sovereign debt Crises? More instability in Europe. Pension Fund payments? Taken over by the Gov. Pension G. fund, or not paid. Then there'd have been continued large institution failures occurring on a random basis. Won't even get into State Pension funds, etc. However, if nothing had been done, Wall Street would have paid in real blood, methinks.

WHO made it posssible for the banks/wall street to fail at such a level to rape the American people? And why? What has been done to correct the issue? Fannie, Freddie and Wall Street managed to be successful for many years. Anyone have an idea of what caused their failure?

Several culprits: One - Larry Summers and Al Greenspan (Clinton Admin) brushing off any attempts to oversee the Over The Counter Derivatives Market (FINRA would have been responsible and the director asked for authority and was denied `don't mess with innovation!'). Two - Freddie and Fannie existing as PRIVATE Corps with implicit government backing (inherently too big to fail - made their paper very attractive, i.e., less risk for investors): little control by gov. as their lobbying arms pretty much served as a slush fund for both parties - `donating' $200 million to over 350 congress critters over ten years. Also had a relationship with Countrywide that encouraged that company to write as many mortgages as possible (good/bad/ugly, nevermind). `Irrational Exuberance' on the part of MANY CITIZENS. Bond Rating Agencies that would rate your paper AAA primarily because you paid Very Good Money for them to rate it for you (then sell that C paper to the widow's and orphan's pension fund - confident that you and I would eat the losses). Why? Greed, hubris, etc. all the usual suspects (why oversight is absolutely essential).

So you and I and every other citizen pulled investors/counterparties feet from the fire, and we would have ended up being burned worse if we hadn't. Yet neither party has demanded any true and effective `haircuts' (still can't believe we paid full value for the AIG cwap). Freddie and Fannie haven't really been dealt with (Chinese won't touch the paper because U.S. couldn't give the paper explicit backing - would have had to raise the debt ceiling - which we'll have to do for reasons more pressing...). The Financial Reform Act is a start but is very weak and will probably be weakened further this session (not much love for Volcker).

Trust the GAO (Government Accountability Office - director serves a 15 yr. term - hard to put a political hammerlock on the Director). They also pointed out, several times, that something like this was in the offing. They are required to check the Accounting Standards of the U.S. budget, yearly (started in 1996). They haven't signed off on a single budget since then. It is all about oversight - rats should have no place to hide - http://www.gao.gov/​

 

[crtrlovr]

TARP- in my opinion, helped only the auto industry and banking industry, and did little to no good for the private citizen. I still don't think our government gets how angry and frustrated the average taxpayer is over the TARP program, and over the Recovery/Reinvestment Act. Don't want the Obama Healthcare Bill? (even though we don't have time to read it before we actually pass it?) Tough. Tired of sending your tax dollars to countries who harbor terrorists and refuse to help us bring to justice those who are culpable? Tough. Am I glad to see that *some* progress was made on the infrastructure, i. e. roads & bridges? Yes. Am I delighted to know that OVER A MILLION DOLLARS was paid to make the signs to be erected near those construction projects saying, "these improvements paid for by the Recovery & Reinvestment Act" or some such wording so we'd get a nice, warm fuzzy feeling about how our money's being spent? uh, no. Tired of states going bankrupt because they aren't allowed to ENFORCE EXISTING LAWS and not have to support millions of people who are not legally entitled to the resources they're draining from individual states? Tough. Do I love this country? Absolutely, unequivocally. Am I frustrated with the ridiculous waste, irresponsible spending, and intrusive regulations that do not promote economic growth, but are slowly regulating away what remaining rights and liberties we DO still have? You bet.

 

[ivan3]

crtrlovr wrote: Tired of states going bankrupt because they aren't allowed to ENFORCE EXISTING LAWS and not have to support millions of people who are not legally entitled to the resources they're draining from individual states?

One of my favorites: Every time I hear `Comprehensive Immigration Reform' or `Fences' I can only shake my head. Memories are short, politicians of both parties count on it (internet is making this hard to do). The 1986 Immigration Reform And Control Act (bipartisan under Reagan) allowed for up to 3 million individuals to apply for citizenship if they met the requirements (not nearly that many did). It also allows for $10,000 fine and 1yr. in prison for employers hiring illegals. For the brief period it was enforced it actually worked. Both parties had their reasons for not enforcing it. I used to write letters urging that 5,000 agents be put on the employer's butts and max penalties. Who needs a fence if you make a few examples?​

 

[Dunkopf]

Quote:
One of my favorites: Every time I hear `Comprehensive Immigration Reform' or `Fences' I can only shake my head. Memories are short, politicians of both parties count on it (internet is making this hard to do). The 1986 Immigration Reform And Control Act (bipartisan under Reagan) allowed for up to 3 million individuals to apply for citizenship if they met the requirements (not nearly that many did). It also allows for $10,000 fine and 1yr. in prison for employers hiring illegals. For the brief period it was enforced it actually worked. Both parties had their reasons for not enforcing it. I used to write letters urging that 5,000 agents be put on the employer's butts and max penalties. Who needs a fence if you make a few examples?

I love informed people that don't just regurgitate what they hear on TV. Thank You.