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Wall Street hasn’t ended its excesses

March 26, 2013

WASHINGTON — In April 2012, Americans were confronted with a story of Wall Street excess and derivatives disaster now known as the JPMorgan Chase whale trades....

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(27)

Whizzywhig

Apr-04-13 3:30 PM

Vauche,

FACE FACTS.

Many people don’t have the luxury of your highly vaulted education!

FACE FACTS.

Average people who perform mainly at the seventh or sixth grade reading level,

WERE CONNED.

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Whizzywhig

Apr-04-13 3:29 PM

Where or whenever, could they assume the catastrophic outcomes,

of a ‘ballooned” mortgage?

I am sure with your prodigious knowledge vauchie,

you would have to admit,

if you weren’t expressly nurse-fed,

that would you ever assume something so outrageous and ruinous,

as doubling and perhaps even tripling of the interest rate,

would be perpetrated upon you or them just after a few short years,

by the banks,

especially,

by their local bankers,

especially,

when the history of bank loans and mortgages,

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Whizzywhig

Apr-04-13 3:27 PM

hardly ever had this

“bait and switch”

scheme appear out from up their collective sleeves!

The rest of you and your fellow republicans schemers

think

“THEY GOT WHAT THEY DESERVED”,

AND

The banks were entirely within their ethical boundaries to

“bait and switch”

the “suckers”!

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Vauche

Apr-01-13 9:44 AM

The difference here is I believe it is up to the individual to realize what they can and can not afford. You believe it is the banks job. Well guess what, the bank doesn't care if your house poor. That's not thier job.

Yes, the banks made money on selling the loans. That's their job. To make money. Now I'll agree that some unethical practices took place in disclosures along the way and that needs to be dealt with. But make no mistakes, this started with the federal government trying to "equalize" the playing field so things where "fair". Social justice, ya gotta love it!

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Vauche

Apr-01-13 9:38 AM

Frog, Frog, Frog.

I'm not saying the banks are completely innocent here. I'm saying the federal government laid the ground work with their desire get everyone in a house. Affordable or not.

Of course banks knew the loans were risky. A duh statement if ever there was one. The took the risk to meet the standards created in revisions of law which was intended to get poorer and minorities into homes.

Why? Because there was a disparity in the number of loans to this population. Why? Because they COULDN'T AFFORD THEM! To get around this, yes, banks got creative with mortgages.

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frogleggs

Mar-30-13 10:04 PM

Banks.

Because banks were under risk and capital ratios,

a new scheme by the rich, wall street, and the bond raters for a way to get out from under the 'RISK', banks had assumed by all of these poor loans.

The scheme, was to bundle this bad paper in tranches,

and sell them upward to unsuspecting investor's.

THIS IS FRAUD, DECEIT, AND GREED,

for the rich,

by the rich,

both of whom are republicans and democrats.

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frogleggs

Mar-30-13 9:52 PM

Vauch,

“Second, the banks didn't sell these loans to make money.”

WRONG !

Vauch,

The banks sold these loans to make money.

PERIOD "."

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frogleggs

Mar-30-13 9:51 PM

The banks were MOTIVATED to sell these loan papers in order to:

1) Receive a commission for granting the loan.

2) Bankers KNEW, these loans were BAD from the onset.

3) Even though they were BAD,

MONEY,

could still be reaped (raped) from “processing” these loans,

even though they were Non-Committal about divulging the vulnerability of the mortgagee.

And, four,

the MOST IMPORTANT POINT,

4) Banks were UNDER FEDERAL REGULATION,

on the AMOUNT OF RISK,

they could ASSUME,

because GLASS-STEGALL was still in effect,

and the ratio of loans (aka RISK) to

capitalization had to be MAINTAINED…

BECAUSE,

GLASS-STEGALL had not been repealed for the rich, their corporations, wall street, and the bankers.

5) EVEN THOUGH,

banks were urged to make loans to certain loan applicants…

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frogleggs

Mar-30-13 9:47 PM

LOANMAKERS WERE NOT.

LOANMAKERS WERE NOT given a PASS, by the policies or mandates of the CRA…

TO FOREGO

THE PRACTICE OF

PERFORMING

“DUE DILGENCE”

as to the vulnerability of the loan applicant.

In order to process as many loans as possible for their 'commission' they made loans that later became 'TOXIC',

AND THEY KNEW THIS WOULD HAPPEN,

when the loan was reopened in the ballon process.

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frogleggs

Mar-30-13 9:44 PM

Vach,

You can’t have it both ways.

You can’t “pick and choose the parts of CRA you want to believe is fact.

You have to be able to read and understand,

ALL parts of CRA,

including the early foundations and writings, and the adjustments that came later.

You are misleading yourself,

if you don’t understand the whole CRA package,

thus leading to your faulty and erroneous thinking and writing.

Your failure is that you:

1) don’t read and comprehend well at all

2) take things out of context

3) don’t understand the things you take out of context

4) arrive at wrong assumptions because of poor reading and comprehension.

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BravesRock

Mar-29-13 2:07 AM

If someone is stupid enough to believe that they can buy a house with no money down, no credit check, a 40-year (or longer) mortgage, and with payments that stretch their budget to the max, how is that the bank's fault? There were some unscrupulous lenders out there, no doubt, but a little common sense and restraint on the part of consumers would have gone a long way towards preventing the crisis. P.T. Barnum was right, but I think "every minute" was a little off. Every second, maybe.

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Vauche

Mar-29-13 12:53 AM

Is that a joke Frog?

First, the banks created these loans to satisfy the requirements of the community reinvestment act or face litigation.

Second, the banks didn't sell these loans to make money. They sold them as quick as possible not to lose money, they were risky.

Third, I can hear it now, "Those evil banks won't lend to the unintelligent, how evil!" We can't discrimminate you know.

The thought process of some folks on here are completely and utterly the reason we are in this mess. NOTHING is their fault. Noone is responsible for the things they do. Keep this up and we are all doomed.

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frogleggs

Mar-28-13 10:38 PM

The ‘reason’ so many home buyers ‘defaulted’ on their mortgages,

is because they were ‘lured’ into these ‘loans’ by predator’s,

bankers,

finance companies, and

wall street brokerage houses,

all turning a profit off of selling mortgages to someone else…

a gigantic ponzi scheme, designed to catch the first and last person buying into 'such-a-deal',

an offer you can't refuse!

The reason for these new products,

to sucker the poor and uneducated,

was the ends and promises of a get rich quick scheme and shell-game.

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frogleggs

Mar-28-13 10:29 PM

The get rich quick ‘lure’

was promised to buyers of credit card and mortgage debt

by the ‘balloon of interest rates” that were embedded deep in mortgages, that,

too many uneducated and naïve mortgagees did not understand.

In a few years, the cheap loans collapsed, and

high interest loans became the norm.

Why then were the bankers, financiers, and mortgage brokerages so unwilling to reduce the buyers’ higher interest rates?

Money…

The scheme to make MONEY the easy way,

steal it from the uneducated and unsuspecting poor!

4 Agrees | 0 Disagrees | Report Abuse »

Vauche

Mar-27-13 2:08 PM

In another stroke of genius Clinton used Housing and Urban Development (HUD) to require that Fanny and Freddie guarantee these loans. Further exaggerating the problem HUD then allows Fanny and Freddie to create their own secure loan products that banks could purchase to meet CRA requirements for minority and unqualified mortgage applicants.

It gets worse and the problems go all throughout the political spectrum, democrats and republicans all doing stupid things in the name of fairness, equality, and VOTES. It all came to a head in 2008 when many of these unqualified borrowers defaulted at the same time. So in the end the seeds of the economic downturn were sown when we started making financial decisions only on the basis of being fair (a liberal talking point lest I remind you).

My point is not to minimize the involvement of wall street investment firms and big banks. However the role of inappropriate and unwise government regulations can not be overlooked.

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Vauche

Mar-27-13 1:37 PM

I beg your pardon googley, I don't know what I'm talking about? Or is it I don't want to just drink some kool-aid?

I will not argue that eliminating the Glass-Steagall Act was a dumb thing. Of course it was, but it still post-dates the revisions by Bill Clinton of the Community Reinvestment Act in 1993.

Why do I say the liberal politics? Simply because the whole point of the revisions Clinton did were to increase minority home ownership. AG Janet Reno used this to then prosecute banks who didn't lend to "enough" minorities regardless of their ability to pay. To prevent prosecution banks lowered their lending standards to the point where nobody was declined. Now the banks knew these were risky loans but is was make them or face prosecution.

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googleyeyed

Mar-27-13 11:58 AM

The writer "V", doesn’t know what he’s talking about:

“First off, Wall Street didn't start the economic down turn.

That was the collaps of the housing market, brought on by liberal political policies."

“Third … rules.”

The government had the rules, policies and regulations in place!

Only after Glass-Steagall and other policies and regulations were discarded did the system of risk and failure become systemic!

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googleyeyed

Mar-27-13 11:56 AM

Another,

in a long line of history lesson’s the writer will not accept or even research are the true facts!

The Glass-Steagall Act, which was enacted to prevent the greed of the rich, the banks, and the bankers of the 1920’s from ever happening again…

The culmination of this unbridled greed, led to the economic collapse in 1929, known as

“The Great Depression.”

4 Agrees | 1 Disagrees | Report Abuse »

googleyeyed

Mar-27-13 11:54 AM

Glass -Steagall worked well, from the day it was enacted in 1933,

until it was decimated in the year 2000, after serving ALL Americans, and the world, well,

for 67 years.

With the signing of the Financial Modernization Act of 1999, and further signing of the Commodity Futures and Modernization Act of 2000,

by none-other than the infamous Bill C. who kicked America and Working American men and women in the teeth and kept the unscrupulous rich, their businesses, and corporations from their predatory business polices in check until Clinton, phill gramm, the rich, the corporations, and the bankers got their way at long last.

4 Agrees | 1 Disagrees | Report Abuse »

googleyeyed

Mar-27-13 11:53 AM

History is replete with references of dispair and hatred by the rich and their banks, and their corporations,

over passage of Glass-Stegall.

From the beginning, the rich and their banks, and their corporations wanted to nullify Glass-Stegall.

It was not the liberals who wanted to do away with Glass-Stegall, it was the rich, the rich democrats, and most of all the republican conservatives who wanted good riddance of Glass-Stegall.

According to the FDIC’s Failed Bank List, which covers the period from October 1, 2000, through March 8., 2013...

FOUR-HUNDRED, and EIGHTY-NINE (489) banks in the U.S. and Puerto Rico have FAILED!

Do some original research and if the facts are not palatable to you, silence that pie-hole of misinformation.

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googleyeyed

Mar-27-13 11:49 AM

The fourth of your points is

“right-on”.

Ever wonder WHY, none of these people and firms have

EVER been HELD ACCOUNTABLE, for their many acts categorized as being one of the following:

Misfeasance,

Malfeasance,

Non-Feasance ?

The first step is to indict and jail the following people:

Bill Clinton,

Phil and wendy gramm

James leach,

Thomas Bliley,

Allen greenspan,

Larry summers,

Robert Rubin,

Timothy Geitner,

Arthur levitt,

Sandy Weill,

John Reed.

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googleyeyed

Mar-27-13 11:44 AM

And,

to name just a few,

the, too many bankers and their executives officers, from

CitiGroup,

Goldman Sachs,

JP Morgan,

Bear Stearns,

Countrywide Financial,

Fannie Mae, and

Freddie Mac,

Merrill Lynch,

AIG - American International Group,

Washington Mutual,

Lehman Brothers,

Wachovia…

and,

the principals and officers of the following credit rating agencies:

Moody’s,

Standard & Poor,

Fitche’s,

as wells as the principals and collusion artist’s of:

The leading London Banks, who make up,

The London Interbank Offered Rate,

or

LIBOR,

and the associated scandal.

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Vauche

Mar-27-13 12:19 AM

Fourth, stop bailing these banks out. Stop bailing out any private corporations for that matter too. No company is too big to fail. Things might really get bad if they do, but it is also the only way that things can truly reset and recover.

Our problem is we are soft. We don't want these companies doing these things yet we are to weak to accept the consequences, temporary as they would be, if we let the companies suffer the fate they deserve.

So, with that I hope Mr. Levin focuses on fixing the laws that exist and I certainly wouldn't mind seeing some people behind some bars. If they lied to regulators and if they broke laws they deserve no less than that.

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Vauche

Mar-27-13 12:11 AM

First off, Wall Street didn't start the economic down turn. That was the collaps of the housing market, brought on by liberal political policies.

Secondly, even though I would call myself a defender of big business and Wall Street even I can say these practices are absurd and I would commend Mr. Levin in his pursuit of the truth here.

Third, my only issues with the thought process here is the need for more and more regulations. We don't need more, just fix the ones that are broken, fix the accounting issues, clarify and fix the reporting issues, and by all means put some stiff, stiff penalties for breaking these rules.

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googleyeyed

Mar-26-13 11:48 PM

All Americans,

should be thankful to the Senate Permanent Subcommittee on Investigations,

and to Senator Carl Levin as chair of this Subcommittee.

A hearing was held to call attention to the culmination of a nearly one-year, bipartisan investigation

that produced a 300-page report

that is disturbing to say the least,

about continued blatant disregard by the heads of banks and our financial markets

of rules and regulations

regarding the amount of financial risk a financial institution is allowed to assume,

and the amount of risk exposure to bank customers and shareholders….

3 Agrees | 0 Disagrees | Report Abuse »

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