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

Unitedwestand13 said:
who would object to this? oh yeah the banks.

i guess wall street made a mistake in blocking Elisabeth warrens nomination to the financial protection bureau.
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Excellent point about their blocking her nomination!

Elizabeth Warren is a breath of fresh air! This is great news.
 
Fenton said:
Should it be re-implemented ? Yes.

DID the doing away with Glass-Steagal cause the 2008 finincial collapse ? No.

Warren just reaches out to your average low information Liberal via the " evil bank narrative" and keeps her lying mouth shut when it comes to who put the policies in place that lowered 100 year old Standards for banks and 60 year old standards for Fannie Mae.

All done under the false pretenses of "discriminatory" practices by lenders.

In 2004 when Fannies regulator was warning Congress of the two GSEs eventual Collapse, Democrats were sitting in front of Republican held Comitees lieing their asses off.

As the Republicans were trying to pass stricter regulations Fannie was doubling down on their extremely corrupt and irresponsible behaviour by getting into NINA loans and buying up massive amounts of privately issued mortgage backed securities.

What any investment bank or lending corporation did as far as unethical practices pales in comparison to the Corruption that Continued through questioning of investigative comittees at the GSEs.

When I hear her address the Government Sponsored Criminals at Fannie and Freddie I'll listen up but so far she's just another useless Democrat that only appeals to low information voters.
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I don't think your claim that the repeal of GS had nothing to do with the collapse of '08 can be substantiated.

Things move slowly, and the financial system is very much interconnected and complex.

The repeal gave us the "casino mentality" and also all those credit default swaps and everything else that gave us the bubble that then deflated.
 
Tucker Case said:
False. All of us who actually did it the right way (20% down, good credit, buying that which we could afford as first time homebuyers) ended up victims when we saw our investments turn to **** and out loans turn upside down due to the market being flooded by foreclosures from douchebags who took out 100% to 115% LTV NINA loans that they couldn't afford while ****hole banks ran off with billions in profits form ****ing the system.
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OK, point taken. I was talking about the people in the transactions. Too many people are trying to turn the "McDonald's" worker into a victim, but you are right, of course. Those who owned homes the right way were certainly victims.
 
Dr. Chuckles said:
Yeah, brah, it's like people are confusing our political system with a two party one, where democrat and republican become overly broad labels for various liberal and conservative factions ...
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i'm not trying to get into factions, im actually poking fun at most conservatives.
 
My understanding is that Glass-Steagall is largely a red-herring. People like simple answers and it's appealing to pinpoint the cause of the financial crisis to something as simple and specific as the repeal of a solitary law. But, other than arguably making Citibank's situation worse, how did GLBA contribute to the crisis? What specific bad lending practices by, say, Lehman Bros or Bear Stearns would have been prevented by Glass-Steagall?
 
apdst said:
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.
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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.
 
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jmotivator said:
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.
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All the more reason to put Glass-Steagal (or a more modern version of it) back in place.
 
Objective Voice said:
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.
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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.
 
washunut said:
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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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.
 
OpportunityCost said:
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.
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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! :beer:
 
Objective Voice said:
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.
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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.
 
washunut said:
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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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.
 
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.
 
a351 said:
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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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.
 
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.
 
a351 said:
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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Um, first off, they all were taking on excessive risk, that is self evident in the collapse and the bailing out of the banks to stop a total collapse.

Second, the commercial banks became their "counterpart" in 1999 when Glass was repealed, both entities began taking on said "excessive risk", so of course a comparison would show little difference. If you want a comparison between the types of risk taken (investment/lending) between commercial and investment banks, you would have to do that BEFORE the repeal of Glass.

The real risks of the repeal of Glass are far outweighed by whatever perceived "benefits".
 
poweRob said:
Dear God what a dodge.

Glass Steagall separated investment banks from neighborhood banks where you put your checking and savings into. Local checking and savings banks were NOT allowed to invest on Wall Street. If you were a bank you had to choose which of the two kinds of banks you wanted to be. It was enacted right after the stock market crash of 1929. Then repealed in 1999 by the Gramm/Leach/Bliley act.

You're welcome. And now you can pretend you knew this all along.
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Glass-Steagal also separated insurance companies, and separated real estate too. The reasoning behind Glass-Steagal was that, if one sector of the economy crashed, it would not take other sectors of the economy down with it, like what happened in 1929, and then again in 2007.
 
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