Originally Posted by TacticalEvilDan

Um, sorry, no, but "proper accounting standards" had nothing to do with it.

Let's put aside, for just a moment, that banks are allowed to commit fraud every day that they're in business.
This has nothing to do with accounting practices, and everything to do with a financial system rigged to benefit the big boys on the backs of the little boys and the taxpayers.

It's as simple as that.

Originally Posted by obvious Child

I don't agree with this at all. Write downs of the level 3s were occurring almost immediately after the housing market went bad. There was bad times a stewing at the investment houses well before the average person got wind of it. Citi went out to find a sovereign wealth fund to shore up their balance sheet relatively early in the crisis.

What is more of an issue was that rating agencies were sellings rates, you could buy whatever rating for your product that you wanted, similar to how in 1999 you could buy an audit. How S&P and Moody's haven't been shutdown or fined yet amazes me.

Originally Posted by SFLRN

So cooking the books had nothing to do with it?

Originally Posted by GottaHurt

Fair enough, you pointed out when Barney took over the chair. Perhaps you'd like to address Barney's assesment of the situation here:

"These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis," said Rep. Barney Frank, then ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

When McCain was saying this two years earlier:

"If Congress does not act," McCain said in 2005, "American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole."

Bottom line, Barney Frank dropped the ball. McCain & Bush were calling for intervention before Frank even took over the committee, and Frank still did nothing.

Investor's Business Daily: Congress Lies Low To Avoid Bailout Blame

Originally Posted by Iriemon

Frank's statement was made in 2003.

McCain's statement was made May 26 2006, not 2005,

Retrieve Pages


which was two days after the Office of Federal Housing Enterprise Oversight ripped Fannie Mae for its accounting practices:

http://www.nytimes.com/2006/05/24/bu...in&oref=slogin

Since the Republicans controlled Congress before 2007, one might wonder why they didn't do something about it if their leaders like John McCain and George Bush thought it was such a problem.

Recognizing that there is a problem and doing nothing about it is worse than not recognizing a problem at all.

Originally Posted by GottaHurt

Bottom line, Barney Frank dropped the ball. McCain & Bush were calling for intervention before Frank even took over the committee, and Frank still did nothing.

Originally Posted by GottaHurt

Thanks, you just proved my statement here:

Frank knew when he took over as Chairman of the House Financial Services Committee. Your NY Times article is the smoking gun. Frank is the current chairman, and has been sitting on this information for at least 18 months.

If it was the Republicans fault, as you claim, the democrats would have been all over this.

Originally Posted by obvious Child

Come again? Who was cooking the books? Bad policies regarding buying and selling of bad loans is not cooking the books.

Originally Posted by http://www.guardian.co.uk/business/2008/jan/30/subprimecrisis.creditcrunch?gusrc=rss&feed=network front

"Fourteen companies, including some of the world's largest banks, are being investigated over possible accounting fraud, improperly securing loans and insider trading during the sub-prime mortgage scandal.

The FBI said yesterday that it had opened criminal investigations into improper lending in the American housing market.

Neil Power, head of the FBI's economic crimes unit, told journalists that the investigation includes the companies that securitised the loans and investment banks that bought those products, as well as the developers and sub-prime lenders.

"We're looking at the accounting fraud that goes through the securitisation of these loans," said Power.

Several of the world's largest banks separately revealed yesterday that they are cooperating with official investigations. Bear Stearns, Goldman Sachs and Morgan Stanley all announced, via official filings to the US Securities and Exchange Commission, that government investigators have asked for information about their sub-prime lending practices."

Originally Posted by obvious Child

That's a good question. But that doesn't deal with the heart of the problem. Why weren't the companies buying the securitized mortgages looking at the revenue streams behind these derivatives? I have no sympathy for the companies that had to write down billions because they were too dumb to figure out that they should not have bought that crap. It's like buying a used car without even looking at it.