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Thread: Warren Joins McCain to Push New Glass-Steagall Law for Banks

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by apdst View Post
    Then, when people can't get loans, because the regulations were put back in place, the government can come in and save the day, by lifting the regulations, again.
    It's not loans you're referring to. It's access to easy credit; BIG difference. The irony here, of course, is it was folks like you -the deregulation crowd - who complained about how so many people got home loans "on credit" they couldn't afford to repay.

    I fully understand that the conservative mind-set equates deregulation as a bridge to free markets, but you've lost sight of how without checks and balances of such a system, the system implodes which was exactly what happened in the 2008 housing crisis. Stated yet again- "Corporate America could not fix itself." It's the very reason commercial banks went running to the Fed Res banks at the height of the crisis. It's a shame folks like you still refuse to accept the truth of the matter.

    Now, on this filerbuster issue, all Sen. Reid appears to be saying is if Senate Republicans are going to reneg on an agreement on their part to stop stonewalling confirmation of presidential appointments, he will end filerbustering in the Senate and go with a simple majority vote. Frankly, I think this is long overdue not due to political ideology but because it just makes sense.

    If a Senator disagrees with a matter, he should voice his displeasure durning open debate. Senators shouldn't be allowed to just ramble on non-stop about anything the majority of which has absolutely nothing to do with the subject at hand or the bill as proposed. The filerbuster is nothing more than a tool used by disgruntled blowhards who just want to stall an issue or kill a vote. Both sides have done it. It's beyond time to end this obstructionist practice.
    Last edited by Objective Voice; 07-13-13 at 10:05 AM.
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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by jmotivator View Post
    It's actually not terribly complicated. The sudden purchasing craze by Fannie and Freddie created a can't-lose environment for the banks in the early going since Fannie and Freddie underwriting had almost no requirements. This drove up the cost of housing, leading to the assumption throughout the financial industry that between the generous federal buy environment and the real estate resale costs loans couldn't lose money.

    But then the buyers also had that same delusion. If the fabled McDonald's worker bought a $700,000 home, and then couldn't make payments when the Arm expired then no big deal, they could just flip the house for $850,000 and walk away with more money then they had ever seen.

    Nobody was a victim, everyone was operating on the same motivations, and it was all fueled by a federal loan buying program that essentially broke the risk model that the banks have been operating on forever.
    All the more reason to put Glass-Steagal (or a more modern version of it) back in place.
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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by Objective Voice View Post
    It's not loans you're referring to. It's access to easy credit; BIG difference. The irony here, of course, is it was folks like you -the deregulation crowd - who complained about how so many people got home loans "on credit" they couldn't afford to repay.

    I fully understand that the conservative mind-set equates deregulation as a bridge to free markets, but you've lost sight of how without checks and balances of such a system, the system implodes which was exactly what happened in the 2008 housing crisis. Stated yet again- "Corporate America could not fix itself." It's the very reason commercial banks went running to the Fed Res banks at the height of the crisis. It's a shame folks like you still refuse to accept the truth of the matter.

    Now, on this filerbuster issue, all Sen. Reid appears to be saying is if Senate Republicans are going to reneg on an agreement on their part to stop stonewalling confirmation of presidential appointments, he will end filerbustering in the Senate and go with a simple majority vote. Frankly, I think this is long overdue not due to political ideology but because it just makes sense.

    If a Senator disagrees with a matter, he should voice his displeasure durning open debate. Senators shouldn't be allowed to just ramble on non-stop about anything the majority of which has absolutely nothing to do with the subject at hand or the bill as proposed. The filerbuster is nothing more than a tool used by disgruntled blowhards who just want to stall an issue or kill a vote. Both sides have done it. It's beyond time to end this obstructionist practice.
    Not sure that this is a regulation versus non-regulation issue, rather one of common sense regarding the safety of banks. If anyone really wants to debate the issue versus fire off partisan notes, then we could start with one assumptions. First did investment banking make banks more risky and help bring on the financial crisis. Other than Citi, the bank holding companies were not only not the problem but helped avert a larger problem by buying other failed stand alone investment banks ( Bear Sterns) and mortgage companies like Countrywide. You can also look at what investment banks do and ask if they are riskier than commercial banks. Most would say giving advise to corporations or helping to place corporate bonds, mainstays of the industry are not very risky.

    As to banks being to large and this causes a problem, let's remember the S&L crisis. These were thousands of small firms that went out of business, for the most part larger banks did not have this problem.

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by washunut View Post
    Not sure that this is a regulation versus non-regulation issue, rather one of common sense regarding the safety of banks. If anyone really wants to debate the issue versus fire off partisan notes, then we could start with one assumptions. First did investment banking make banks more risky and help bring on the financial crisis. Other than Citi, the bank holding companies were not only not the problem but helped avert a larger problem by buying other failed stand alone investment banks ( Bear Sterns) and mortgage companies like Countrywide. You can also look at what investment banks do and ask if they are riskier than commercial banks. Most would say giving advise to corporations or helping to place corporate bonds, mainstays of the industry are not very risky.

    As to banks being to large and this causes a problem, let's remember the S&L crisis. These were thousands of small firms that went out of business, for the most part larger banks did not have this problem.
    Not so fast with the holding companies. Have you read the book, "Too Big to Fail", by Andrew Ross Sorkin or watched the documentary/movie of the same name? It so, you'd know that it was the former Treasury Secretary, Hank Paulson along w/Tim Geithner who orchestrated those bank "mergers and acquisitions". Make no mistake: these big investment banks and/or finacial holding companies did not act on their own NOR of their own accord.
    "A fair exchange ain't no robbery." Tupac Shakur w/Digital Underground

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by OpportunityCost View Post
    Strongly supprt this regulation so long as it stays focused on this small mandate---to restore the wall separating commercial and retail banks and making the risk be on the backs of commercial banks again instead of counting on the retail banks and the government to bail them out.
    OMG! Do my eye deceive me? AConservative who finally gets it? I never thought I'd see the day when a Conservative would agree that there are instances when regulations ARE necessary. Give this man a beer on me!
    "A fair exchange ain't no robbery." Tupac Shakur w/Digital Underground

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by Objective Voice View Post
    Not so fast with the holding companies. Have you read the book, "Too Big to Fail", by Andrew Ross Sorkin or watched the documentary/movie of the same name? It so, you'd know that it was the former Treasury Secretary, Hank Paulson along w/Tim Geithner who orchestrated those bank "mergers and acquisitions". Make no mistake: these big investment banks and/or finacial holding companies did not act on their own NOR of their own accord.
    However or whyever they did it, the key is it happened. Without BAC taking over Merrill or JPM taking over Bear Sterns what do you think would have happened.

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by washunut View Post
    However or whyever they did it, the key is it happened. Without BAC taking over Merrill or JPM taking over Bear Sterns what do you think would have happened.
    Those banks would've collapsed because they didn't have enough cash to remain in operation. Their failure would've has a ripple effect throughout the financial system taking other banks with them.

    In short, these banks were broke! They owned millions and had no way to pay it. Mergers and acquitions tbough forced upon them was one way to remove the bad debt out there while shoring up the big banks. The bailout was the best way to give the surviving banks instant cash WITHOUT startin g an international financial panic. Granted, it put the financial burden on the taxpayers for decades, but our financial system remained in tact AND our economy is better for it. Still have a long way to go, but when you really look into the crisis WITHOUT partisan blinders you begin to understand just how fortunate this nation is to still be functioning as a capitalistic country.
    "A fair exchange ain't no robbery." Tupac Shakur w/Digital Underground

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    It seems to be a largely symbolic gesture for many of it's supporters. I've yet to see sufficient evidence to suggest banks active in both arenas took on excessive risk when compared to their counterparts, or negative effects of diversification significant enough to ignore the benefits therein. Warren's tendency to support populist movements isn't surprising in the least though.

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Quote Originally Posted by a351 View Post
    It seems to be a largely symbolic gesture for many of it's supporters. I've yet to see sufficient evidence to suggest banks active in both arenas took on excessive risk when compared to their counterparts, or negative effects of diversification significant enough to ignore the benefits therein. Warren's tendency to support populist movements isn't surprising in the least though.
    Prior to the wall--retail banks would write paper on mortgages, bundle them and sell them to commercial banks bundled or as derivatives and the commercial banks wouldnt buy them if they were too risky. After the wall the two were merged so the commercial bank was selling them to whoever would buy them. Instead of giving commercial banks more capital, they simply leveraged more instead of trying to remain stable.

    Lesson: never buy on margin if one big loss will wipe you out. Which is kind of what happened.

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    Re: Warren Joins McCain to Push New Glass-Steagall Law for Banks

    Dick Armey and his gang of theives led the way for the repeal of GS.

    They were highly motivated to repeal it, for the obvious reasons, and history shows it to be true.

    Honest bankers are a distinct minority, especially on Wall Street.

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