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Thread: House, Senate leaders finalize details of sweeping financial overhaul

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    the govt nationalized fannie and freddie.

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    For those interested in what the bill is trying to accomplish, details may be found here: Reinventing financial regulation - The Washington Post

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by ptif219 View Post
    So more government is the answer but don't touch Fanny or Freddy?
    Now, that's just a stupid response. Why quote me, then come up with an off the wall response like that? Why not just post without a quote, and leave the rest of us wondering what the hell you meant?

    That way, we could just ignore you.

    Come to think of it, that's a good idea.
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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by Dittohead not! View Post
    Surely, no one is going to argue that financial reform wasn't needed, are they?
    Explain how a lack of regulation lead to the collapse of the housing and financial sectors.

    So, are there arguments for or against this particular bill that don't hinge on "Democrats (Republicans) are all a bunch of idiots"?

    You know, arguments about what is actually being proposed?
    I would maintain that government policies were the cause of the recent collapse, and that "financial reform" is just another red herring in a long line of red herrings to absolve the government of its involvement in yet another distortion of the market.

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by Dittohead not! View Post
    Now, that's just a stupid response. Why quote me, then come up with an off the wall response like that? Why not just post without a quote, and leave the rest of us wondering what the hell you meant?

    That way, we could just ignore you.



    Come to think of it, that's a good idea.
    WHY? The reason is you think this big government take over that protects the democrats Franny and Freddy is good and needed. It will hurt the economy even more.

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by scottsoperson View Post
    deregulation caused the financial crisis.

    Credit Default Swaps: The Next Crisis? - TIME
    1. Credit default swaps are not an example of "deregulation". They were "unregulated", not "deregulated".
    2. None of this explains how the use of credit default swaps caused the housing market to collapse, the failure thereof being the impetus being the subsequent collapse of the financial sector.
    3. The bottom line: Credit default swaps were just an instrument used to mitigate risk, nothing more. If people had continued to pay their mortgages, the credit default swaps wouldn't have been an issue. They were a symptom of the underlying ailment, not the cause of it.

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by alms View Post
    Explain how a lack of regulation lead to the collapse of the housing and financial sectors.
    Seriously? You must remember how the lack of regulation led to mortgage brokers giving out "creative" loans to people who could not pay them back, then selling the papers as good investments, don't you? Does the term "toxic assets" ring a bell? That is the sort of thing that happens when banks are allowed to gamble with other people's money. Government regulation should prohibit such practices.

    Quote Originally Posted by alms View Post
    I would maintain that government policies were the cause of the recent collapse, and that "financial reform" is just another red herring in a long line of red herrings to absolve the government of its involvement in yet another distortion of the market.
    I'm not sure that the government can be absolved of its involvment, or lack thereof. It was lack of oversight that led to the housing crash and the resulting recession, pure and simple.

    I have no idea whether the financial reform that is being proposed is going to solve the problem or not, and you don't either. The particulars are not public as yet.
    "Donald Trump is a phony, a fraud... [he's] playing the American public for suckers." Mitt Romney

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by Dittohead not! View Post
    I think we all know what problems existed, now that the banks had to be bailed out. All that has been discussed at some length. Do you mean to say that you're unaware of the problems that existed prior to the crash of '08?
    No, I'm asking you for specifics about what you understand to be the problems that need to be fixed. In my experience, the vast majority of people who talk about the need to "fix" the financial system don't really have a concrete idea of what that really means.

    As for how and whether the bill will fix them, we won't know that until it becomes public. Right now, it has yet to be debated by the full house or senate.
    A version of this bill has already passed both houses - this discussion was just over working out the kinks between the two versions. There's not going to be any more substantial debate over the bill before passage. I'm asking you how it will fix the aforementioned problems that you've identified.
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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Except that it doesn't. Banks and insurance companies are regulated; the credit swaps market is not. As a result, contracts can be traded — or swapped — from investor to investor without anyone overseeing the trades to ensure the buyer has the resources to cover the losses if the security defaults. The instruments can be bought and sold from both ends — the insured and the insurer.

    All of this makes it tough for banks to value the insurance contracts and the securities on their books. And it comes at a time when banks are already reeling from write-downs on mortgage-related securities. "These are the same institutions that themselves have either directly or through subsidiaries invested in the subprime market," said Andrea Pincus, partner at Reed Smith LLP. "They're suffering losses all over the place," and now they face potentially more losses from the CDS market.

    Indeed, commercial banks are among the most active in this market, with the top 25 banks holding more than $13 trillion in credit default swaps — where they acted as either the insured or insurer — at the end of the third quarter of 2007, according to the Comptroller of the Currency, a federal banking regulator. JP Morgan Chase, Citibank, Bank of America and Wachovia were ranked among the top four most active, it said.



    Read more: Credit Default Swaps: The Next Crisis? - TIME

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    Re: House, Senate leaders finalize details of sweeping financial overhaul

    Quote Originally Posted by alms View Post
    Explain how a lack of regulation lead to the collapse of the housing and financial sectors.
    Easy. No regulation on banks on verification to get a loan. Banks didn't have regulation over that aspect of their business. Banking regulation deals more with what type of assets they can/must have and what their ratios are.

    And there was little regulation on derivatives. AIG had CDS that total liability easily exceeded its total assets and equity. There was no way they could ever pay even a fraction if those derivatives went bad.

    I would maintain that government policies were the cause of the recent collapse, and that "financial reform" is just another red herring in a long line of red herrings to absolve the government of its involvement in yet another distortion of the market.
    And you can explain this with actual facts and not partisan propaganda in actual economics terms? Or are you just another person RightinNyc is describing as effectively ignorant?
    "If your opponent is of choleric temperament, seek to irritate him." - Sun Tzu

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