There's also news that UBS is slated to acknowledge another writedown of $15-$18 billion dollars, in addition to the $18 billion above. As Krugman said, a Trillion here, a Trillion there, pretty soon you're talking about real money.

When an Empire is in decline, the carrion feeder's numbers increase. The Empires leaders begin doing the opposite of everything needed to maintain the Empire's health.

Once the Empire is weakened, it can no longer fend off the scavengers and the carrion feeders, and more and more politicians turn to feast on the dying beast. After all,

Is there any doubt that we're in that state now?

Let us also recall that when Flim-Flam Gramm ran for President, it was none other than John McCain who became his election chairman.
Loyalty over competence is a Repug tradition, just look what loyalty has brought over the last seven years.

John McStupid openly admits he "doesn’t really understand economics" ; what is with the horseshit GOP that they always manage to find the candidate who least deserves the nomination , let alone the presidency itself ?

Unlike McCain, Obama does seem to know something about economics.

The idea of President McCain scares the hell out of me. Meanwhile the media is all a whirl about Obama's bowling score. As far as the media is concerned the economy of our country was yesterday's news. I guess they think the big speech yesterday cleared everything up.

If McInsane is elected, we can kiss the middle class good-bye. The average American has suffered under Georgie's policies. The baby-boomers are retiring and social security and medicare will long be gone before I or my peers can benefit from them. We need sanity now.

UBS is going to write-down another $19.5 BILLION (for 1st quarter '08) after $18 BILLION last year!

Wow, watching Morning Joe, the breaking news is about the inquest of Princess Di. Oh, and Reverend Wright. No news about Iraq or Afghanistan. You would think there isn't a war or wars going on would you?

Al Queda denies conspiring with U.S. Government to bring down WTC.
They are pissed that the theorist are trying to steal away the credit.

(figured you could all use a break from reality for a couple of minutes)

Patty D. @ 18:

pissed of patricia, your right. I barely watch MSM anymore. I listen to c-span and tune in every hour or so. I can only handle so much of Hillary and Obama. MSM is becoming a farce.

Becoming?

pissed off patricia @ 16:

Patty D. @ 15:

Wow, watching Morning Joe, the breaking news is about the inquest of Princess Di. Oh, and Reverend Wright. No news about Iraq or Afghanistan. You would think there isn't a war or wars going on would you?

I can barely watch that show any longer. If you see the first fifteen minutes you have pretty much seen the whole show. Joe has become intolerable. Rendell was on talking about Florida and he did not have all the facts or else he failed to include them. After that, I couldn't take any more.

POP, I just finished reading "A Thousand Splendid Suns" (same Author as Kite Runner).
This book really gives a great perspective on how the whole thing started with the downfall of the USSR and then step by step to where we are now, by following the lives of a few people in Afghanistan. great book.

Touche! Bangkok Bob.

ysbaddaden @ 24:

♣Bangkok Bob♠ @ 17:

Al Queda denies conspiring with U.S. Government to bring down WTC.
They are pissed that the theorist are trying to steal away the credit.

(figured you could all use a break from reality for a couple of minutes)

I'm always on break.

Well, I never drink on Wednesday, so I get a chance to roam the Internet with a clear mind for a change. LOL

Bush and Cheney = "the new Pinochet's"
http://en.wikipedia.org/wiki/Augusto_Pinochet

crooked regime
government coup
Suppression of opposition
Economic policy
Secret bank accounts, tax evasion and arms deal
--> Arrest and trial

here we go...
http://words-of-power.blogspot.com/2008/03/can-you-say-pin-o-chet-those-...

http://www.nytimes.com/2008/04/02/business/worldbusiness/02ubs.html?_r=1...
it's only going to get worse.

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/01/MNAEVTF7M...

mudshark @ 31:

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/01/MNAEVTF7M.DTL

Just seeing that article makes me homesick for the Bay Area. (sigh)

Phil Gramm, the wonderful idiot who wrote the legislation that allow a company like Enron to exist. Phil Gramm, whose wife was a lobbyist for Enron, and on their Board. This couldn't be the same Phil Gramm who didn't run for re-election for his Senator job, taking his huge war chest home. He got out before Enron's shit hit the fan. Phil fudges like Hillary, but only worse. He tells whoppers. He was the type of Senator who fought a bill tooth and nail, and then took credit for getting it passed later on. He didn't take credit for his Enron dealings though. Oh, not Phil Gramm.

This couldn't be who McCain is trusting, could it. Phil shouldn't be allowed to stand close to any public funds. It would be like a paedo living next door to a Primary school.

Tug @ 30:

Gramm's wife was on the Board of Directors of Enron, and Gramm must have played a role there.

I used to have a link to a story about how Gramm got his wife on the BoD of Enron and the strings he pulled to do, followed by her lobbying efforts in Washington on their behalf.

I'll do some digging and see if I can find it.

27 The Smiths

Yes we should abandon all our institutions because they were affected by coup as well as we were. Clearly youngbloods have the only value in our society now. Anything that still has any remaining taint of the current administration should burnt to the ground and considered unsalvagable.

This may be a bit off topic, but if McCain doesn't understand economics his potential running mates probably don't either. Part of this list of possible running mates was posted on C&L a few days ago, and I would give the poster credit here, but I don't recall the name. Sorry. I embellished the list with my caustic comments.

Hope this gives you a few chuckles even though it is a scary thought to imagine any of these nutcases on the Republican ticket.

Here are some possible running mates Senator John McCain (aka: McInsane) could pick:

To attract the family values crowd:
ex Congressman Mark Foley (Florida) - an outed gay Republican who ran the Congressional page program and sent explicit emails to some of the pages

Senator David Vitter - family values guy from Louisiana who got his kicks by having his favorite "ladies of the evening" (the DC Madam) dress him in Depends

Senator Larry Craig (Idaho) - homophobic gay-basher who got caught in a sting in a Minneapolis airport men's room with his pants down, literally

ex Congressman Tom DeLay - the former "Hot tub Tom," now a born-again Christian, practices his Christian love by advocating annihilation of all Muslims, liberals and Democrats on the face of the Earth; he is still under indictment for accepting campaign funds illegal under Texas law

To cement the Republican White House’s good grounding in scientific reality:
former Arkansas Governor Mike Huckabee - believes the U.S. Constitution should be amended to make it conform to the Bible; believes Noah herded dinosaurs onto the Ark

Senator Sam Brownback (Kansas) - same as Huckabee (above)

Senator James Inhofe - this Oklahoma senator claims he has traced his family tree back to Creation and found not one gay family member; also believes that global warming is a complete hoax; probably doesn't believe in the theory of Atlantis either

To demonstrate their intimate knowledge of technology
Senator Ted Stevens - could run with McCain if he is not indicted first; would open up the entire state of Alaska to oil drilling as well as parts of neighboring Canada and Russia

Or their vast experience in correctly predicting the outcome of our military interventions
Bill Kristol - editor of the wingnut Weekly Standard and famous Chickenhawk who wants the U.S. to kill virtually everyone else in the world; touts Iraq as a tremendous success

Or just their all-around good-guy reputation
Karl Rove - former top adviser to W Bush and possibly the most sinister dirty tricks artist in U.S. history; made the Nixon crowd look like rank amateurs; his accomplishments include stealing elections, destroying the professionalism of the Justice Department, outing a CIA agent, playing the 9/11 fear card, and dividing the American people

Honorable Mention
Secretary of State Condolizzard Rice - still confused about whether W Bush is her husband; having achieved zero foreign policy objectives she now yearns for greater opportunities as VP

ex Congresswoman Katherine Harris (Florida) - helped W and Jeb Bush steal the 2000 Florida vote by removing convicted felons and thousands of others who were not convicted felons from the voter rolls; was rewarded with her own seat in Congress; ran such a bizarre Christo-fascist campaign for the Senate in 2006 that even Republican leaning Florida rejected her

ex Speaker of the House Denny Hastert - would definitely add some bulk to the ticket; his most important accomplishment was the fact he was the longest serving Republican Speaker in history

ex Senator Rick Santorum (Pennsylvania) - "Slick Rick" was the Number 3 Republican in the Senate; this self proclaimed Christian advocates hating everyone who does not share his religious beliefs; rumored to be living in the Creation Museum in Kentucky

"Confronted with a fire, John McCain is taking advice from an arsonist. If elected, he intends to put the arsonist in charge of fire safety."

Well it is the way Bush has been doing it, so why not?

John McCain admitted to the Wall Street Journal editorial board he “doesn’t really understand economics.”

REAL STRAIGHT TALK instead of the usual DOUBLESPEAK.

Mugsy @ 37:

Tug @ 30:

Gramm's wife was on the Board of Directors of Enron, and Gramm must have played a role there.

I used to have a link to a story about how Gramm got his wife on the BoD of Enron and the strings he pulled to do, followed by her lobbying efforts in Washington on their behalf.

I'll do some digging and see if I can find it.

From here: http://www.buyingofthepresident.org/index.php/archives/1996/41/

"In response to the energy companies’ request, Wendy Gramm set in motion the process that led to energy derivative contracts and other exotic financial transactions being exempted from regulation. (snip)

Cumulatively, Gramm’s campaigns had received $157,250 from the people who were asking his wife to exempt energy derivatives and the other transactions from regulation. (snip)

The name of one company in particular might have caught Wendy Gramm’s attention: Enron Corporation. It was the only company that signed the original request and two of the supporting letters sent later. It’s a fairly large company, based in Houston. Of all the companies that wrote to the CFTC seeking the exemption, Enron was the biggest donor to Gramm’s campaigns, giving $34,100 over the years.

After taking actions that led to the exemptions from regulation, Wendy Gramm resigned on January 20, 1993, the day Clinton was inaugurated. Five weeks later, she was named to Enron’s board of directors. The part-time position pays her $22,000, plus $1,250 for each meeting she attends. In April 1993 the CFTC voted 2 to 1 against regulating the business. Two seats on the board were vacant at the time; the remaining commissioners, all Bush appointees, were seen as ideologically aligned with Wendy Gramm."

Phil and Wendy, ethically-challenged individuals that they are, helped each other.

EliteLemming @ 39:

27 The Smiths

Yes we should abandon all our institutions...

http://www.youtube.com/watch?v=f9TkG-dd3Ok

As long as so many Americans keep putting Rethugnicans into office there is no prospect for any progress on issues like the economy, energy efficiency and global warming. One reason so many Rethugs are in office is because Americans are the most clueless voters on the planet.

In 2001 a college educated Dem friend of mine said she voted for W because he seemed like a nice guy. When I mentioned that W would roll back environmental and consumer protections she became annoyed and asked how I knew that. I tried to explain that there are fundamental policy differences between Dems and Rethugs on a wide range of issues. She looked at me like I didn't know what the hell I was talking about. She demonstrates what is called uninformed and misinformed thinking.

Another friend who voted for Gore in 2000 later voted for W in 2004 because he did not "trust" Kerry. How could he distrust Kerry after all the lies Bush and Cheney uttered during their first term? This is called illogical and inconsistent thinking.

With nitwits like my friends we will keep electing people like Bush, Cheney, Tom DeLay, Newt, Quayle, Inhofe, Craig, Vitter, etc.

There is no solution to this kind of stupidity by so many voters. Rethugs are experts at taking advantage of this stupidity.

Commercial truck drivers are so upset here about the price of diesel, they're going on strike today.

This is Texas, no one goes on strike.

Might explain the cold snap today though

Hell just froze over.

Big Dick Cheney @ 42:

PLEASE CONTINUE TO REFER TO JOHN "THE REPUBLICAN" MCCAIN WITH HIS PROPER MIDDLE NAME...

it is well understood that his handlers are trying to make him appear as "without party" because the GOP sucks at this time....

....i believe he should wear it PROUDLY.... like a lapel pin

I just call him Bush 3.0

Weaseldog @ 55:

Big Dick Cheney @ 42:

PLEASE CONTINUE TO REFER TO JOHN "THE REPUBLICAN" MCCAIN WITH HIS PROPER MIDDLE NAME...

it is well understood that his handlers are trying to make him appear as "without party" because the GOP sucks at this time....

....i believe he should wear it PROUDLY.... like a lapel pin

I just call him Bush 3.0

Or we could just call him the little dick.

"Another friend who voted for Gore in 2000 later voted for W in 2004 because he did not “trust” Kerry. How could he distrust Kerry after all the lies Bush and Cheney uttered during their first term? This is called illogical and inconsistent thinking."

I encountered the same in '04. The Swiftboating of Kerry was beyond reproach... but it worked.

I've never known my peers to be more informed or more liberal than they have been over the past five years, yet at the same time, ask them why they voted for someone like W, and all of their knowledge goes out the window. "My parents said that Rush Limbaugh said," or, "I don't want things to get worse," for example.

I don't get it.

Why are you people blaming Republicans for everything, they did not cause the housing meltdown, greedy people and banks did!

Here in Texas the state publicans pushed through a state constitutional change to remove the Homestead Act. Originally, you home was safe from creditors except the IRS and mechanic's leans.

They pushed it as Don't Let the Government Tell You What You Can Do With Your Money.

So now middle-class people are being foreclosed on, because they rengotiated their mortgages and took out second mortgages to take advantage of the lower rates under the sub-prime market, to find themselves suddenly having to pay more than they can afford.

Rasputin @ 62:

chris @ 61:

Why are you people blaming Republicans for everything, they did not cause the housing meltdown, greedy people and banks did!

Because deregulation served up by first the GOP congress in 1999 and then Bush's nullification of the states "predatory lending" laws in 2003 and Reagan's man Greenspan dumping excess liquidity into the market creating a "credit Bubble"... did cause this. Next question.

Next question?

Why did deregulation of lending allegedly cause a crisis, but deregulation in other industries did not? Deregulation in and of itself is not a bad thing. For example, there could be a regulation that bans gay marriage, or a regulation that bans soft drug use. Wouldn't the "deregulation" of these things be beneficial?

Could it be that Greenspan told everyone to take out variable rate mortgages knowing that rates would go way up after 5 years? Could it be extremely low interest rates the Fed set in 2001-2004 that created an artificial demand that propped up housing prices? Could it be that there was a PURPOSEFUL looking away from lending and housing in order to jack up the prices of houses, so that American consumers could have a seemingly never-ending rise in equity which allowed them to keep the consuming economy going? Could it be that a nation that does not produce anymore is destined to fail, and that ANY action that will stave off total collapse will be taken, such as creating a housing bubble? Could it be that the economy should have gone into a recession after the dot com crash, but didn't because the Fed pumped massive amounts of liquidity that found its way into housing, then after housing burst, into commodities?

It's one bubble after another, and it's getting so bad that MORE THAN ONE BUBBLE is forming at a time. Not only are housing prices still in a bubble, but stocks, financial firms and commodities are also in a bubble. Everything is valued in a currency that has no value backing it up, except the threat to other countries of selling oil in dollars. But this cannot last. This system is not productive, it only puts a band-aid on the wound that is always festering.

Drew @ 65:

Rasputin @ 62:

chris @ 61:

Why are you people blaming Republicans for everything, they did not cause the housing meltdown, greedy people and banks did!

Because deregulation served up by first the GOP congress in 1999 and then Bush's nullification of the states "predatory lending" laws in 2003 and Reagan's man Greenspan dumping excess liquidity into the market creating a "credit Bubble"... did cause this. Next question.

Next question?

Why did deregulation of lending allegedly cause a crisis, but deregulation in other industries did not? Deregulation in and of itself is not a bad thing. For example, there could be a regulation that bans gay marriage, or a regulation that bans soft drug use. Wouldn't the "deregulation" of these things be beneficial?

Could it be that Greenspan told everyone to take out variable rate mortgages knowing that rates would go way up after 5 years? Could it be extremely low interest rates the Fed set in 2001-2004 that created an artificial demand that propped up housing prices? Could it be that there was a PURPOSEFUL looking away from lending and housing in order to jack up the prices of houses, so that American consumers could have a seemingly never-ending rise in equity which allowed them to keep the consuming economy going? Could it be that a nation that does not produce anymore is destined to fail, and that ANY action that will stave off total collapse will be taken, such as creating a housing bubble? Could it be that the economy should have gone into a recession after the dot com crash, but didn't because the Fed pumped massive amounts of liquidity that found its way into housing, then after housing burst, into commodities?

It's one bubble after another, and it's getting so bad that MORE THAN ONE BUBBLE is forming at a time. Not only are housing prices still in a bubble, but stocks, financial firms and commodities are also in a bubble. Everything is valued in a currency that has no value backing it up, except the threat to other countries of selling oil in dollars. But this cannot last. This system is not productive, it only puts a band-aid on the wound that is always festering.

Here... I'll make it easy for you and put it in pictures since your reading comprehension is so poor:

This explains how the banks assumed to much risk by using hedge funds that weren't regulated. They didn't have any regulations at all and that is how this mess got out of control on an epic scale!

PBS NewsHour 20070830 Subprime Primer 1of2
http://www.youtube.com/watch?v=k6jWvOHYeJc

This part covers risk, growth, and the Fed pushing money into to try and re-inflate the "Housing Bubble", welcome to Ronald Reagan's or economist Milton Friedman's free market "bubble economy."

PBS NewsHour 20070830 Subprime Primer 2of2
http://www.youtube.com/watch?v=O5u7H5EOxJY

This is how a couple of hundred billion dollars of bad mortgage debt turns into a multi-trillion dollar meltdown of the world's banks.

PBS Newshour explains the 2008 credit bubble and the Domino Effect
http://www.youtube.com/watch?v=bHXcnWrw7r4

Regulations are to business what laws are to people

Without them corporations become elite citizens.

Rasputin @ 66:

Sorry Rasputin, but Krugman can't have his cake and eat it too. Wars are either good for the economy or they are bad for the economy. One cannot say that wars are good for the economy in one breath, and then state that the money could have been better used elsewhere in the next. Krugman's problem (sorry if I stick to Krugman and not get sucked into a personal quibble with you) is that he is stuck in a Keynesian intellectual world, where even pyramid building is viewed as healthy for the economy, so long as it creates jobs (these are Keynes' own words).

What Krugman does not understand (I am only criticizing him because he has both fallacy filled ideas and fame, a lethal combination) is that the only thing that makes us more prosperous in the long term is if the productivity of labor rises. The productivity of labor rises when there is more savings, because saving finances the creation of capital goods, which is what wage earners use in production. The more capital goods wage earners have to use, the more products they can produce for sale, and because the same labor is being used to produce more products, prices can fall and not hurt profitability.

It is only when prices FALL is there an overall rise in our standard of living.

But wars, excessive government expenditures like building pyramids and missiles and tanks, as well as heavy taxes, all these things directly HURT productivity, because money not spent on capital goods is spent on consumer goods. The more we spend on consumption, the less we spend on capital formation, which HURTS EVERYONE IN THE COUNTRY in the long term.

Rasputin, you can insult me, put me down, do all of these things. But I do not take those statements as anything except a reflection of your own misgivings, not mine. If you want to talk about wars and the economy and why there is a market meltdown, I'll be glad to. But every single time it seems you always bring up "deregulation" in one form or another, yet you never precisely describe what deregulations you are talking about. You simply assume that by saying the word "deregulation" that everyone will understand, because that's how you people gather in flocks. By saying certain keywords here and there with nothing to back them up except for a non-named collective understanding of anti-capitalism.

The problems with our economy go MUCH MUCH deeper than housing and lending. You know that don't you? If it was MERELY a few bad lenders here and there, then in a free market they would have gone bankrupt and then that would be that. But the problems go much deeper than housing regulation. If you cannot take off your side blinders, if you cannot put yourself at a bird's eye view of the economy and figure out why the whole economy is suffering, then you have no reason to talk or assume that you are helping the situation. If all you do is stick to minor things like regulation, and make it THE problem, it only shows your bias and not your ability to see things in the aggregate sense.

Let me repeat. The economy has problems that lie MUCH deeper than housing and the derivatives that were based on it. This economy is suffering the consequences of not producing, and borrowing in order to consume. This is an extremely bad situation that requires MASSIVE overhauling, and by overhauling I mean INTELLECTUAL overhauling, not just tinkering with rules and regulations, which would be like rearranging the deck chairs on the Titanic.

We need to end the Federal Reserve. That is the only way this country can get back to producing again, so that our currency becomes valuable because of what we produce, and not because of the threat our government makes to oil producing nations. You do understand that the Bush administration is fighting wars because that is the only way to keep our war-state economy going, the very war state that Krugman and all the other Keynesians said would be so good for the economy. We are at war not because of terrorism. We are at war because of our own fiscal and economic irresponsibility.

When economies suffer because of statist policies that were thought to work but actually don't and never have, and the majority of people think the state is the solution and not the source of the problems, then self-analysis becomes impossible, and outside environments become targets for blame.

Hardly anyone blames statist policies. They only blame CERTAIN people in state positions that ruined it for everyone. Such naive thinking is incredibly short sighted because is it possible to have 1000 years of big good government without any extremely bad people that come along and take advantage of the situation that is presented to them?

The current government and the supporters, and I mean supporters of Obama and Hillary as well, are predominantly Keynesian in nature, meaning more government to solve bad government. But government is the problem in the first place. Corporations without government privilege are absolutely harmless. But the more people do not take ideas seriously, the more we become lazy and blame this or that regulation, the more that people in this country will not find the answers they are looking for. They will then start to blame the world for what has happened here, hence the empire wars abroad.

Weaseldog @ 70:

Re-Regulation is often termed - De-Regulation.

Other industries got Re-Regulated before 2000.

Since 2000, true De-Regulation has been the fad.

Republicans believe that large corporations should not be bound by rules or laws.

Look at the Telecom Immunity legislation that Bush is trying to get passed. It will make Telecom Corporations completely beyond the rule of Law. No laws would apply to them at all. They could steal or murder during the course of their business and no one could touch them.

They could counterfeit money and no one can touch them.

Bush and the Republican Congress repealed most of the laws that prevent financial institutions from gambling with investments such as mutual funds, 401ks and IRAs, so that they could leverage tons of debt on them and make big commissions.

The Republicans knew what would happen. The effects are taught in High School. Or used to be... These laws were enacted to prevent a second Great Depression.

They knew that removing these laws would lead to another Depression, but they also knew they'd get lot's of money for doing it. And they like money.

Dead on! Those repug bastards knew exactly what they were doing.

It's not like this is the first depression ever. Yet, despite the evidence of the massive failures of their ideaology everywhere (domestic and foreign policy), they stick to-it. Why? Because they don't care. Just let the corporatocracy suck the life out of the country and everyone else in it. That's their problem, not Bush's.

It's GOP 101 basic philosophy (compassionate conservatism). Find people less fortunate than you are, and steal everything they have. They deserve it, and so do you!

Rasputin, you can insult me, put me down, do all of these things. But I do not take those statements as anything except a reflection of your own misgivings, not mine. If you want to talk about wars and the economy and why there is a market meltdown, I’ll be glad to. But every single time it seems you always bring up “deregulation” in one form or another, yet you never precisely describe what deregulations you are talking about. You simply assume that by saying the word “deregulation” that everyone will understand, because that’s how you people gather in flocks. By saying certain keywords here and there with nothing to back them up except for a non-named collective understanding of anti-capitalism.
---Drew

I've said this all to you before, but as per my last post to you... your reading comprehension is truly abysmal!

1. The Banks and brokerages used hedge funds to evade US banking regulations on the amount of risk they could assume and the amount of capitalization that they needed to back up both their loans and the securities they issued. The videos explain that very well... but you alway evade answering them.

PBS NewsHour 20070830 Subprime Primer 1of2
http://www.youtube.com/watch?v=k6jWvOHYeJc

This is how a couple of hundred billion dollars of bad mortgage debt turns into a multi-trillion dollar meltdown of the world's banks.

PBS Newshour explains the 2008 credit bubble and the Domino Effect
http://www.youtube.com/watch?v=bHXcnWrw7r4

And which pieces of deregulation specifically allowed the current subprime crisis to develop?

It was the repeal of the Glass-Steagall Act of 1933

Following the Great Crash of 1929, one of every five banks in America fails. Many people, especially politicians, see market speculation engaged in by banks during the 1920s as a cause of the crash.

In 1933, Senator Carter Glass (D-Va.) and Congressman Henry Steagall (D-Ala.) introduce the historic legislation that bears their name, seeking to limit the conflicts of interest created when commercial banks are permitted to underwrite stocks or bonds. In the early part of the century, individual investors were seriously hurt by banks whose overriding interest was promoting stocks of interest and benefit to the banks, rather than to individual investors. The new law bans commercial banks from underwriting securities, forcing banks to choose between being a simple lender or an underwriter (brokerage). The act also establishes the Federal Deposit Insurance Corporation (FDIC), insuring bank deposits, and strengthens the Federal Reserve's control over credit.

SNIP! Jump to modern day...

Oct.-Nov. 1999 Congress passes Financial Services Modernization Act

After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic.

On Oct. 21, with the House-Senate conference committee deadlocked after marathon negotiations, the main sticking point is partisan bickering over the bill's effect on the Community Reinvestment Act, which sets rules for lending to poor communities. Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

But wait there is more...

Bush Administration invoked an obscure Banking clause 1863 to enable predatory lending practices

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers. In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative.

http://www.crooksandliars.com/2008/02/15/bush-administration-invoked-an-...

Quit trying to play the victim and distorting the truth. The Fed does play a role and I noted that, but you always try to ignore the deregulation part of the picture to spin your "free market" Ron Paul BS and anyone who points out the facts you start calling an "anti-capitalist" or a "communist."

"Free Market capitalism" theory and "Communism" are the opposite sides of the same coin... they are academic theories that don't work in the real world because of basic human nature.

Communism was supposed to be the "Worker's Paradise" and the central government was supposed to dissolve away. Well that didn't work out to well now did it... Stalin and Mao found that hanging on to power and living lavishly at the workers expense was much more attractive.

"Free Market Capitalism" has never existed anywhere in the world either and in the absence of regulations the greed of the mortgage brokers and banks produced a "feeding frenzy" that now threatens the entire worlds financial system with collapse.

Instead of promoting self regulation and the "rule of law" as the "Free Market" theory goes... we saw wide spread institutionalized fraud:

Chase mortgage memo pushes 'Cheats & Tricks'

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/12...

Greed and unenlightened self interest will always bring these Utopian fantasies down!

Rasputin @ 75:

"“Free Market Capitalism” has never existed anywhere in the world either and in the absence of regulations the greed of the mortgage brokers and banks produced a “feeding frenzy” that now threatens the entire worlds financial system with collapse."

Again, you cannot get out of your bubble mentality. The greed of mortgage brokers is not threatening the entire system. That's not how economies operate. It is simply impossible to have one part of the economy to suffer massive losses and then have this affect the entire market. If one part suffers losses because of a decrease in revenues, then by definition other parts should see increases in revenues and hence profits.

But when you have an economy with a central bank, the whole economy can become inflated. But because the world is complex, with human decisions changing and adapting everyday, this means that it is inevitable that one part will show signs first, and then other parts will soon follow. The housing bubble and the finance bubbles and all the other bubbles are crashing not because of each other, but because they are all being driven by the same underlying factors, and the factor is inflation (increase in quantity of money).

After all I said, you still think the current recession is caused by mortgage lenders. Really, I don't think you have given this the proper thought it deserves. The housing bubble was merely the first sign or SYMPTOM of a much deeper cause. You have been brainwashed by mainstream media who, like parrots, repeat over and over again that "the mortgage crisis threatens to spread across the whole economy, there should be action taken to prevent this spreading", etc, when in reality THAT VERY ACTION PEOPLE ARE DEMANDING is what caused the problem in the first place. It's people thinking that economies can be "fixed" by conscious manipulation and tinkering. This is impossible for a central body, like the government or the Fed, to do. Central bodies simply do not have the required information to make intelligent decisions. They think they do, many people like you think they do as well. But they don't and never have. To have the proper information requires knowledge of every single person's daily choices, wants, desires, and purpose.

You want housing to be regulated more because you think it is possible for the problem to be fixed by the government. But the government cannot make any regulation in the market that will work long term, because every time they intervene to "solve" one problem, they cause further problems in other places. The current recession is a consequence of such interventions. The Fed can do nothing except print dollars, and the government can do nothing except use force and coercion. To solicit these bodies as a permanent source of getting what you want, will ONLY MAKE THINGS WORSE.

I will say this again, because you seem to not want to understand. The current problems with this economy do NOT stem from what you hear daily on the MSM news, that is, mortgage lenders. It stems from a more deep problem, which is a country that is not producing, and borrowing in order to consume. This cannot last. These problems further stem from a belief of the acceptance of inflation from the Fed and government intervention by spending money as a means to achieve "stability" in an otherwise "chaotic" market. These things are even further stemming from a very deep seeded and strong belief pattern among the public that centralized control of the market can make it better. It is a left over part of our heritage to use force to solve our problems. But using the state or its financier the Fed, will only makes things worse overall.

Now, as long as certain people benefit from this corrupt system, they will chant its benefits, they will fund intellectuals who chant the same things, they will support anyone who chants it...meanwhile everyone, including themselves, suffer in the long term. They suffer because the means they used to achieve their objectives (wanting handouts, using the Fed for "price stability" and more recently even handouts from the Fed). The means chosen were the wrong means because they ignore the nature of human action in a world of constant flux. Stability in human affairs cannot be achieved. Humans are not stable. We change, we adapt, we learn, we reason. There is ALWAYS change in human affairs. But all the means used to achieve this cannot work. That's why we are suffering.

All the recent signs of the economy show that we are a society in decline, that every "temporary" solution to fix a problem is never temporary, because it creates new problems on top of old ones, of which the people call for further short term fixes, which creates even more problems, etc. All while this occurs, never once did anyone mention self-responsibility, I mean TRUE self responsibility, where we make it a habit to NOT seek the state for help, other than protection against others from fraud and violence. When a state becomes too involved in the market, as it has been for the last 60 years or so, then the basic mechanisms of the state (protection against fraud and violence) become secondary, and the survival and legitimacy of the state itself is fought for by those in power. The state more and more finds that it can get away with more and more crimes, because in every problem that occurs in society , the state is solicited for help as ultimate arbiter, even if the problems are caused by the state itself. So it gets bigger and badder, and they get away with it. Everyone in the top positions in government work for the government because they do not believe in the private sector. If they did they would stay in the private sector, which is much more honorable and moral, because in order to live well you have to satisfy other people's wants and desires. If you are in government, the richest people are the bullies and criminals. Those criminals in the private sector then get attracted to the criminals in the government, and a partnership of crime begins.

You know what's sad? How even now as we speak, how all the problems created by the state and the Fed are being ignored. Too many people simply refuse to believe anything other than "freedom kills"...very Orwellian. They simply blame the actions of individuals and they never stop to question the state as an institution, they simply blame Mr. X and Mr. Y., instead of the ideas of the state and its proper place in human affairs.

Drew...

I'll tell you what is sad... as Moynihan said in congress so many years ago:

"Everyone is entitled to their own opinion, but you are not entitled to your own facts"

You have such ideological blinders on that you are incapable of addressing the facts of these events. When someone disagrees with you and points them out then you resort to name calling... "Keynesian slime"... "anti-capitalist"... "hater of free markets"... "communist."

I've produced videos of leading economists, Federal Regulators, Treasury Secretaries, and countless articles by leading economists on the Fed, Monetary policy and the Bubble economy... and not once have you addressed a single point that I or any of them have made.

On the flip side of that, when you make inflated claims that no one here can tell you which regulations were involved in this... I not only detailed them for you... I gave you historical time lines for the events and when they happened, as well as giving you links for verification... which you never do.

Instead here you are again with another empty rhetorical rant, making claims that you can't substantiate, blathering on about "Orwellian New speak" while you are the one serving up the biggest gobs of it yourself.

You have a serious problem with reality dude... I really suggest you get professional help.

You are a seriously disturbed individual Drew and you do need help!

80 Drew

Your long "explanation" is only self-justification and and Henry Paulson/John McCain republican talking points.

Shoaib Qadri @ 82:

@ Rasputin-

To me it looks like all Drew is saying is that to act as if the sole issue with our current economic issues is fraudulent lending is not looking at the whole issue- like trying to alleviate a symptom without curing the disease. I don't see how that line of thought means you become a "seriously disturbed individual". People like Peter Schiff have been talking about this all the time, you can look him up yourself as well. (Have you seen any of the old videos of Ron Paul back in the 80's like when he debated one of the Federal Reserve Governors? No reason to dismiss people who agree with him so easily)

This is the statement of mine that Drew took issue with at Drew 65:

Because deregulation served up by first the GOP congress in 1999 and then Bush’s nullification of the states “predatory lending” laws in 2003 and Reagan’s man Greenspan dumping excess liquidity into the market creating a “credit bubble”… did cause this. Next question.

Please note that the actions of the Fed and Greenspan's actions were noted, so at no time did I ever simply say that deregulation was the sole cause. Further, in attempts to have rational discourse on the subject I submitted the writings of economist Dr. Thomas Palley who has written extensively on the debt delusion and the "Bubble Economy" and traced it back to Ronald Reagan and his economic theories... which use economist Milton Friedman as its ideological base.

In a court of law there are three principle parties, whether civil or criminal. You have two parties that have a dispute, conflicting opinions about a series of events that have occurred. You also have a judge, whose charge it is to find out the truth and he or a jury must be convinced by having the disputing parties submit verifiable factual evidence as to support the truth of their claims.

In order to keep the presentation of their evidence, necessary to "prove" the truth of their claim, within the province of "rational discourse" and not within the realm of "useless polemics" where the opposing parties simply shout their opinions back and forth, strict rules of evidence apply.

There are all kinds of evidence that can be submitted; historical, witness, forensics, expert testimony and so on, but the one over whelming requirement is that they be factual in nature and verifiable.

If a witness were to say "I think that so and so committed the crime", the judge would say... I'm not interested in what you think, tell me simply what you saw. Otherwise your evidence will be thrown out as heresay and be inadmissible" because it lacks the factual requirement to be considered as proof.

Now Drew started with an attack and made specific claims which I responded to at Rasputin 75:

Rasputin, you can insult me, put me down, do all of these things. But I do not take those statements as anything except a reflection of your own misgivings, not mine. If you want to talk about wars and the economy and why there is a market meltdown, I’ll be glad to. But every single time it seems you always bring up “deregulation” in one form or another, yet you never precisely describe what deregulations you are talking about. You simply assume that by saying the word “deregulation” that everyone will understand, because that’s how you people gather in flocks. By saying certain keywords here and there with nothing to back them up except for a non-named collective understanding of anti-capitalism.

And I responded directly to that claim of his with a detailed response and just as the opponents in a court room square off and submit their "evidence" in an argument to prove the truth of their claim, I linked to my sources.

Drew chose not to respond to it though and I called him on it in my post above:

Drew…

I’ll tell you what is sad… as Moynihan said in congress so many years ago:

“Everyone is entitled to their own opinion, but you are not entitled to your own facts”

You have such ideological blinders on that you are incapable of addressing the facts of these events. When someone disagrees with you and points them out then you resort to name calling… “Keynesian slime”… “anti-capitalist”… “hater of free markets”… “communist.”

I’ve produced videos of leading economists, Federal Regulators, Treasury Secretaries, and countless articles by leading economists on the Fed, Monetary policy and the Bubble economy… and not once have you addressed a single point that I or any of them have made.

On the flip side of that, when you make inflated claims that no one here can tell you which regulations were involved in this… I not only detailed them for you… I gave you historical time lines for the events and when they happened, as well as giving you links for verification… which you never do.

Instead here you are again with another empty rhetorical rant, making claims that you can’t substantiate, blathering on about “Orwellian New speak” while you are the one serving up the biggest gobs of it yourself.

And Drews Response:

I appreciate how you put a lot of effort in posting all those things, but in all seriousness I don’t look at them all because I am more interested in what you think. I know about those links, I read a lot and I know the who’s who in the market. I don’t respond to every single thing because it’s just too messy for my eyes.

Drew puts on his ideological blinders and says I don't care to look at the facts... I want to argue on the basis of opinion. Well at that point were back to the court room analogy and "rational discourse" ceases and "useless polemics" that are not verifiable facts prevail.

Sorry... I will engage in "rational discourse" only because I prefer to get to the truth of matters, not engage in empty rhetoric.

You say to me:

People like Peter Schiff have been talking about this all the time, you can look him up yourself as well. (Have you seen any of the old videos of Ron Paul back in the 80’s like when he debated one of the Federal Reserve Governors?

When Drew posted those on another thread on this site I did go and look at them. I have an open mind and I'm willing to look at the arguments of someone who may have an opposing point of view. It might interest you to know that Schiff says many of the same things that the economist I quoted on the "Bubble Economy", Dr. Thomas Palley had to say.

Were I to take the position that Drew now adopts though... I would never have looked and that is the fundamental difference between the two of us. I write in the interest of illuminating the truth of an argument.

Drew, on the other hand, puts on his blinders to any evidence that conflicts with his point of view and responds with an unsubstantiated opinion. Drew's purpose is to indoctrinate and cares little about any factual basis in what he says.

So "rational discourse" with him is impossible and further conversation with him is pointless and a waste of time. He can continue to post his rants all he pleases, but he can do that all on his own... intellectual masterbation is after all a solitary past-time.

Being a Texan, I can tell you that it's S.O.P. here that when your career is on the skids as a political hack, you switch jobs and join the K-Street Mob. Phil Graham is no exception. When he was in Congress, he was nothing but a yes man for whatever GOP was running the show. But you can make more money peddling influence, which is why he got out of public service and into the private sector. Many Texans know him for what he is: a sleazy scumbag with the morals of a rattlesnake.