godzhellraisinson Loc: Las Vegas, Nevada

with all that is going on and now so many see the truth! why do us Americans (citizens) do something about it? aaaaaaaaaaaaaaaaaahhhhhhhhhhhhhhhhhhhh!!!!!!!

Ve'hoe

Not a "seed" it is was a trigger, a booby trap,,,, and like you said, the people are the boobies,,,, not only the taxpayers, who are on the tab to payoff the loans,, which goes back into the banks and financial institutes owned and back alley operated by the polliticians like Mazxine watters,,, etc,,

1. The housing "booby trap" was aimed at blacks and lower income people,,, baiting them into the "american dream" of a house, and a cheap loan,,, then trapping them and realizing the loans would likely fail since they were over extended.

2. Those same individuals would then have a black mark on their credit, and not be able to financially recover,,, therefore would be more dependent on the Govt largesse than ever before, ensuring their vote to democrats forever...

3. The houses and lands would inevitably become the property of the govt,, for projects like harry reids wind farms etc,,, and the cities like Dearborn, Detroit etc would become wastelands of poverty and dispair.


The Repubs only saw the money, greed,, the dems saw the vote potential in crippling an entire economic class and getting them back into "slavery"

Like two groups of sharks,,,, they both went in for the kill..

Some fools still dont understand what happened,, and think the Dems are their Guys and want to help the little guy!! Some think the repubs are theirs,,

I hate both, because they took advantage of folks, by baiting them with their own dreams, and in that dream, was a booby trap,,, it was politicians, not the housing markets, realtors, and or bankers,, it was politicians,,

Sharks are sharks, and they bite you,,, the end..

[quote=alabuck][quote=the waker]Often wondered what makes a person progressive, I always consider progress as moving forward, especially when most progressives complaints are about a distorted past. Speaking of the past and wall street, wasn't it Bill Clinton who repealed the Glass-segal act in 1999 that deregulated wall street in the first place? So yeah, Hillary is a bad idea. Unless you want a power hungry, nut job for president. Oh, wait we got one now ![/quote
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Please read the following from G A Anderson.

by GA Anderson

Republicans and Clinton Repealed Glass-Steagall Act -- Economic Crisis Results

Who repealed the Glass-Steagall Act - signed by Clinton, the Republican push planted the seed for economic crisis. See why the housing crisis is their fault.

Did Too! Did Not! Did Too! Did Not!

The Political Blame Game over Glass-Steagll repeal - The Only Losers Are The People
Source: GA Anderson

Clinton signed the Republicans Repeal of Glass-Steagall Act - the Seed was Planted. When Clinton signed the Republican repeal of the Glass-Steagall Act, he planted the seed that grew into the housing bubble crash and the need to bail out Wall Street - and the Democrats have been left to reap that crop.

One doesn't have to be pro-Democrat to be anti-Republican. There is a lot of good - and bad, in both parties, so the more accurate finger-wagger should address the nuts-and-bolts instead of the whole engine. Obama and the Democrats are getting the blame for not fixing the current economic crisis - and it's true, they aren't, but it's also true the current crisis wasn't entirely of their making. They helped in many ways...

... but it was the removal of the safety barriers in the Banking Act of 1933, (Glass-Steagall), that allowed our financial markets to careen off course.

The Glass- Steagall Act Repeal Details:
The Glass/Steagall Act was officially - The Banking Act of 1933, and it had several components; it established the FDIC, (Federal Deposit Insurance Corporation), and introduced banking reforms that were designed to control speculation by banks and other financial institutions that controlled deposit and investment monies.

It was essentially a consumer protection bill designed to keep different financial market functions - commercial and investment, separate. Banks held depositor's money and the act was intended to keep it separate from the riskier investment markets. If depositors wanted to be investors, they could do so in the investment markets, but if not, they didn't have to be worried about their money being at risk through their banking institution's actions. It was a sound policy that worked.

As our financial markets and institutions grew and began becoming more involved in global business, the Glass-Steagall Act restricted them from doing some of the things they wanted to do. Banks saw all the money to be made in the insurance and investment markets, and those markets, - with a gleam in their eye - saw a huge pool of depositor's money they could use for even more investment and speculative activities.

The influence-peddling and favor-buying began. The financial markets of other nations weren't restricted by rules like the Glass-Steagall act, so the U.S. markets started pushing the "we need freedom to compete" mantra to any politician they could get to listen. They started this campaign around 1980, and did manage to get a few restrictions lifted, and by 1987 there was enough political pressure to warrant a Congressional Research Service report which explored the case for preserving Glass–Steagall as well as the case against preserving the act.

The essence of their report was this: In favor of preserving the Glass-Steagall Act:
Prevented conflicts of interest that could characterize the; granting of credit, lending and the use of credit, and investing by the same entity - which, in the past, had led to abuses that originally produced the Act. In other words, you might not quite qualify for a particular loan, bit if you might use that loan for another financial activity the bank has a piece of, or makes a commission from, then, well - OK you do qualify after all. And visa-versa.

Because depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments. Meaning - with all that depositors money available, banks could act the part of the Big Dog and influence the level of the playing field for all participants. Sound prescient?

Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses. In a nutshell - banks would be gambling with other people's money, and Uncle Sam might get left holding the bag if they failed. Once more, those were pretty accurate crystal-ball gazers back in 1932.

Depository institutions are supposed to be managed to limit risk. Their managers thus may not be qualified to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (savings & Loans in the 1970s and 1980s).

Looking at today's economic crisis in the financial markets, and the government bailouts involved - those look like some very accurate reasons for keeping the Banking Act in place.

Weakening Glass-Steagall = S&L Crisis? Their conclusions against preserving the Glass-Steagall Act:
Depository institutions would now operate in “deregulated” financial markets, where distinctions between loans, securities, and deposits are not very clear. U.S. Financial markets are losing market shares to securities firms that are not so strictly regulated, and to foreign financial institutions operating without the restrictions of the Act. - In other words, they could not compete as profitably in the global financial markets as foreign competitors could. They needed to be able to do things that were more of a risk to depositor's money than the act allowed.

Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms. -- If is difficult here to refrain from using a colloquialism such as; Yeah, right, that will work.

The securities activities that depository institutions are seeking are both low-risk by their very nature, and would reduce the total risk of organizations offering them – by diversification. -- Remember, this report was completed in 1987. It may not be fair of us to so quickly say - Poppycock! We have the advantage of hindsight.

In much of the rest of the world, depository institutions operate simultaneously and successfully in both banking and securities markets. Lessons learned from their experience can be applied to our national financial structure and regulation. -- Apparently those lessons weren't learned - as illustrated by the global financial crisis that is currently occurring, (circa 2012). And which was beginning to show signs of failure before the U.S. crisis fully developed. Financial experts and economists were warning the U.S. markets as early as 2001.

Enter Citicorp and the Republicans:
As mentioned, political pressure, fueled by Wall Street lobbyists and influence-peddlers had been building since 1980, but it went into full-combat mode in 1996 when what was then CitiCorp bought-out and merged with Travelers Group, an Insurance company, Technically this transaction was illegal under the Glass-Steagall Act, but sensing the direction of the political winds, (or should that be "scent of big money"), the Federal Reserve gave Citigroup a temporary waiver in September 1998. A 2-year waiver that would allow the transaction to stand while the process of repealing Glass-Steagall matured.

Enter the Republicans. Senator Phil Gramm, (R-TX), House Representative Jim Leach (R-IA), and Rep. Thomas Bliley, (R-VA), Chairman of the House Commerce Committee. They sponsored a repeal bill called the Gramm–Leach–Bliley Act (GLB), also known as the Financial Services Modernization Act of 1999. The bill passed the Senate along party lines, 54–44, with only one Democrat voting with the Republicans. The House vote was more bi-partisan, 343-86.

Done. Let the games begin. Actually the Gramm-Leach-Bliley Act only repealed one part of the Glass-Steagall Act - the part that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. But that is the one Wall Street needed to be free to operate as they pleased. For instance it allowed a type of activity that is currently in the news - a banker's wife owning a banking holding company that the banker still could not technically own or control. Does not seem to be much of a secret though.

Second thoughts on Glass-Steagall Repeal:
Was Clinton's Repeal a mistake? Here is another example of hindsight validating the accuracy of opponent's arguments. During debate in the House of Representatives, in 1999, Rep. John Dingell, Democrat of Michigan, argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government. Does that sound like T.A.R.P.?

Democrats aren't Blameless:
Although it was the Republicans that set the stage for the current economic debacle, the Democrats aren't blameless. They saw this as just as much of an opportunity to push their social engineering agenda as Big Money did for its profits. After the bill was sent to a conference committee to work out the differences between the Senate and House versions, Democrats agreed to support the bill if Republicans agreed to strengthen provisions of the Community Reinvestment Act. Which contained the legislation that pushed mortgage lenders to relax mortgage loan requirements so more low-income applicants could qualify. Things like allowing Food Stamps to be counted as income toward qualifying for the loans.

It was also a Democratic President that signed the bill into law - Bill Clinton. He could have vetoed the bill, without the concern of a Republican override - they did not have the votes without Democrat support.

The Glass-Steagall Repeal - In retrospect:
On one hand, it is almost eerie how prophetic the original sponsors of the Banking Act of 1933, and the opponents of its repeal in 1999 were. On the other hand, the power of Big Money has always been recognized for the danger it poses. The irony is that so many from both sides of the political spectrum feel justified to stand tall and righteously point their fingers and shout - It's your fault!

In defense of the repeal:
In defense of the repeal, Gramm, the primary author of the Act offered this statement:

"If GLB was the problem, the crisis would have been expected to have originated in Europe where they never had Glass–Steagall requirements to begin with. Also, the financial firms that failed in this crisis, like Lehman, were the least diversified and the ones that survived, like J.P. Morgan, were the most diversified. Moreover, GLB didn't deregulate anything. It established the Federal Reserve as a super-regulator, overseeing all Financial Services Holding Companies. All activities of financial institutions continued to be regulated on a functional basis by the regulators that had regulated those activities prior to GLB."

Also, according to a 2009 policy report from the libertarian Cato Institute, critics of the legislation feared that, with the allowance for mergers between investment and commercial banks, GLB allowed the newly-merged banks to take on riskier investments while at the same time removing any requirements to maintain enough equity - exposing the assets of its banking customers. The report claimed that, prior to the passage of GLB in 1999, investment banks were already capable of holding and trading the very financial assets claimed to be the cause of the mortgage crisis, and were also already able to keep their books as they had. It concluded that greater access to investment capital as many investment banks went public on the market explains the shift in their holdings to trading portfolios.The report noted that after GLB passed, most investment banks did not merge with depository commercial banks, and that in fact, the few banks that did merge weathered the crisis better than those that did not.

Bill Clinton, as well as economists Brad DeLong and Tyler Cowen have all argued that the Gramm–Leach–Bliley Act softened the impact of the crisis. Atlantic Monthly columnist Megan McArdle has argued that if the act was "part of the problem, it would be the commercial banks, not the investment banks, that were in trouble" and repeal would not have helped the situation. An article in the conservative publication, National Review, has made the same argument.

This defense stems primarily from involved parties defending their involvement. And there are authoritative economists and financial market experts that disagree with those defense arguments. Somehow the reality of the situation, and the prophesies of its opponents seem to stand against these defensive arguments.

But as always, it's the reader's choice to agree or disagree with either perspective. But the Republicans were not alone.


Writing for the Daily Constitutional, and commentary from the Curmudgeon's desk - GA Anderson. Last updated on July 17, 2013[/quote]

Ve'hoe

Huh???? SS is govt "giving",,,, it is no longer in a savings account from what you made while working,.,,,


If the govt goes tango-uniform,,,, so do you, along with everyone on Social Security, welfare, and military and govt retirements!!!

It is all govt welfare,,,,

Ve'hoe

It isnt over, yet,,, either,,, Round 5 coming up,,, HELOCs another "booby trap" for homeowners and unwary borrowers

This from Shah Gilani,,,

Get ready. There's more trouble ahead for home buyers, home builders, and especially homeowners who took out home-equity lines of credit before the housing crisis. Those heydays have turned into haymakers.

What's already started to happen might not only knock out the formerly aspiring but now petering-out housing recovery, but also might knock the already weak economy to the ground.

Back in the good old days, when banks and mortgage shops were selling mortgage money and home-equity credit lines like carnival barkers wowing crowds into the big top, millions of homeowners stepped right in.

That circus tent was nothing but a trap, however. And now I'm going to tell you what that trap means for those borrowers... and the rest of the economy...

The "Custom" Mortgage Is About to Come Due

Intoxicated by rising home prices, in the years before 2007 or so, homeowners took out hundreds of billions of dollars in loans against the equity in their homes. What made the deals most enticing were the terms. Most of the so-called HELOCs were 10-year, interest-only loans (that sounds nice ...) that would "convert" into 15-year amortizing mortgages (uh-oh!).


(Remember when we all seemed to be using our homes as ATMs? What were we thinking?)

Well, those trigger dates have been firing indiscriminately, shooting a lot of homeowners where it hurts the most.

According to today's Wall Street Journal, some 817,000 homeowners, with $23 billion in loans, will see their interest-only holiday come to a reality-busting end this year. And this is just the beginning. Over the next three years, an average of $50 billion a year in HELOCs will be converting.

What does that look like to homeowners? The Journal cited two examples. A real borrower had his monthly payments on the $70,000 he borrowed rise from $270 a month to $560 a month. Those payments are "adjustable" and could rise dramatically if interest rates rise.

In an another example from the WSJ, a $100,000 loan with an interest-only payment plan and a 3.5% rate subjects the borrower to current monthly payments of $292. Once converted, the monthly payments will jump to $715 on a 15-year amortizing mortgage note. That would rise further to about $865 if interest rates rise three points.

The consumer credit reporting agency Equifax and the U.S. Office of the Comptroller of the Currency recently reported that delinquencies on HELOCs made during the heydays doubled last year over the previous year.

Homeowners aren't going to be able to refinance those HELOCs if they have less equity in their homes when the loans convert than when the loans were made - which is most of them.

Banks aren't going to be lending generously if and when delinquencies rise. And if home prices stall out here or, heaven forbid, backslide, there's no way there's going to be a flood, or even a trickle, of mortgage money available.

The housing market may be facing another wall. That means home builders may not be putting up as many houses as they had hoped. Because housing makes up about 15% to 20% of GDP, a drop in housing starts puts home sales, construction, remodeling, and all the other businesses and consumption trails associated with housing in the line of fire.

That puts the entire economy in the line of fire. And speaking of fire, the economy's first-quarter growth - make that negative growth of -1% - is a fire.

That's why we're short a bunch of housing-related plays at my Short-Side Fortunes newsletter.

We will be patient - our trades aren't going to pop overnight - but when the roof comes down, our house will be rockin'.

bmac32 Loc: West Florida

There have been some rough times over the years but have never used the house to buy or as a way of getting something else, it's where I sleep. We went to buy a truck a few years back and were offered such a deal if we used the house as collateral, we were floored.

EconomistDon

These are some excellent reports Ve'hoe. I've been watching this situation for a bunch of years now; and I'm very concerned about a second housing and mortgage market crash. It is a powder keg delicately balanced, and could be easily tipped over. The economy is a pendulum that swings both ways. If it starts heading down, people will lose jobs; and those who are stretched thin by the balloon interest payments will lose their homes -- and the dominoes will tumble. Or the Federal Reserve could tip it. The Fed's QE 2, QE 3, and QE Forever mortgage and treasury note buying binge has driven the bond market to an unsustainable high level. When that bubble bursts, interest rates will sky rocket, destroying all loans set to adjustable rates.

On Glass-Steagall, the writers of the original legislation were attempting to prevent another Depression. When the stock market crashed in 1929, many banks that were heavily invested in stocks got creamed and had to close their doors. When people saw that, they rushed to their banks to withdraw their savings. Since banks must by law retain only ten percent of cash that is given to them by customers, it didn't take long to empty them out and they closed. And so began the Great Depression. On the repeal of Glass-Steagall, I feel that the most damaging part was reducing requirements for mortgages. That is what led to the obscene growth in sub-prime mortgages, which dragged the whole thing down in 2008.

Ve'hoe

Yeah, the law wasnt the problem it was what the crooks did with it, the law was good when used as it was supposed to be, when unscrupulous politicians got hold of it,,, it went bad,,


It wasnt the banks and lenders at first, it was Freddie and Fannie,, govt agencies

PoppaGringo Loc: Muslim City, Mexifornia, B.R.

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