How is greed to blame? People were trying too hard to make money?
Through loopholes, yes. Tell me, after the dismantling of Glass - Steagal, how much of that increase in profits was the result of actually providing goods and services, instead of speculating and creating artificial bubbles which eventually burst?
Meanwhile, no less an authority than Volcker himself, the president’s poster boy for financial reform, just acknowledged what others have been saying for months. Which is that the banking reform bill leaves the discredited too-big-to-fail policy intact — alive and well.
In particular, Volcker says he does not believe that the administration is going to be able to apply its too-big-to-fail policy to what he calls “megabanks.”
Ironically, Volcker may have tried to be supportive of the new legislative efforts when he said on CNBC that the proposed resolution authority appears to be a “workable proposition for anything short of the biggest banks.” He then acknowledged that the legislation is not “workable” for the country’s largest banks.
Of course, the whole reason for the policy is to use it against the biggest banks. That’s why it’s called a too-big-to-fail policy.
Perhaps the most outrageous thing about the legislative package that has emerged is that there is not one provision aimed at reforming Freddie Mac or Fannie Mae.
Fannie Mae and Freddie Mac are the government-backed enterprises that buy mortgages from lenders and “securitize them” — meaning that they package them into bonds to sell to investors.
During the financial crisis, the government had to take over these companies because they were too big to fail.
So the lack of reform here only further tarnishes the government’s credibility.
In fact, when it comes to financial reform, the basic problem the government faces is that it lacks credibility in so many areas.
Through loopholes, yes. Tell me, after the dismantling of Glass - Steagal, how much of that increase in profits was the result of actually providing goods and services, instead of speculating and creating artificial bubbles which eventually burst?
The $700 billion U.S. bailout program launched in response to the global economic meltdown had a far greater impact overseas than other countries' financial rescue plans did on the U.S., according to a new report from a congressional watchdog.
Billions of dollars in U.S. rescue funds wound up in big banks in France, Germany and other nations. That was probably inevitable because of the structure of the Treasury Department's program, the Congressional Oversight Panel says in a new report issued Thursday.
The U.S. program aimed to stabilize the financial system by injecting money into as many banks as possible, including those with substantial operations overseas. Most other countries, by contrast, focused their efforts more narrowly on banks in their nations that usually lacked major U.S. operations.
But the report says that if the U.S. had gotten more data on which foreign banks would benefit the most, the government might have been able to ask those countries to share some of the cost.
"There were no data about where this money was going," panel chair Elizabeth Warren said in a conference call with reporters on Wednesday. "The American people have a right to know where the money went."
An example: Major French and German banks were among the biggest beneficiaries of the U.S. rescue of American International Group Inc., yet the American government shouldered the entire $70 billion risk of pumping capital into the crippled insurance titan. The report compares that with the $35 billion that France spent on its overall financial rescue program and the $133 billion that Germany spent.
Much of the $182 billion in federal aid to AIG - the biggest of the government rescues - went to meet the company's obligations to its Wall Street trading partners on credit default swaps, a form of insurance against default of securities. The partners included French banks Societe Generale, which received $11.9 billion in AIG money, and BNP Paribas, which got $4.9 billion, and Germany's Deutsche Bank, $11.8 billion.
Of the 87 banks and financial entities that indirectly benefited from the U.S. aid to AIG, 43 are foreign, according to the report. In addition to France and Germany, they include banks based in Canada, Britain and Switzerland.
In addition to AIG, many of the U.S. banks and automakers that received billions in bailout aid derive a large proportion of their revenue from operations outside the U.S., the report noted.
The watchdog panel was created by Congress to oversee the Treasury Department rescue program that came in at the peak of the financial crisis in the fall of 2008. It has said it's unclear whether U.S. taxpayers will ever fully recoup the cost of the AIG bailout. The Congressional Budget Office estimates that taxpayers will lose $36 billion.
Although the law creating the U.S. rescue program called for Treasury to coordinate its actions with similar efforts by foreign governments, "the global response to the financial crisis unfolded on an ... informal, country-by-country basis," the new report says. "Each individual government made its own decisions based on its evaluation of what was best for its own banking sector and for its own domestic economy."
The U.S. program wound up injecting capital into around 700 banks, while all other governments combined aided fewer than 50, according to the oversight panel.
64% of americans---the economy still has not hit bottom (nbc/wsj poll done by peter hart, the guy who conducts those really fascinating cspan focus groups)
Picture Darkens for Americans, Poll Finds - WSJ.com
the hill, today:
Obama says worst of recession is over amid economic turmoil on Wall Street - The Hill's On The Money
just how outta touch can a prez be?
when's enough gonna be enough?
how does a poll answer the factual question?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?