Renata wrote:

These, of course, had nothing to do with anything...
Renata



" Gramm-Leach-Bliley Act of 1999 ...
...By preventing mergers between the various branches of Wall Street,
...[this] act reversed basic Depression-era legislation passed to
prevent the sort of collapse we are now experiencing.

Commodity Futures Modernization Act of 2000.
...legitimized the "swap agreements" and other "hybrid instruments"
that are at the core of the crisis.


The core of the crisis was Freddie Mac and Fannie Mae for setting the loan
standards so low that those swap agreements and hybrid instruments
contained loans to people with no chance of paying them back. This was
done at the direction of Congress who demanded an end to "redlining" and
the availability of "affordable mortgages" to more people. At its height,
it was possible for people to walk in and get a loan with no down payment
and not even have proof of employment.


"Legal Certainty for Bank Products Act of 2000," Title IV of the
law--a law that Gramm snuck in without hearings hours before the
Christmas recess--provided Wall Street with an unbridled license to
steal. It made certain that financiers could legally get away with a
whole new array of financial rip-off schemes.

One of those provisions, summarized by the heading of Title III,
ensured the "Legal Certainty for Swap Agreements," which successfully
divorced the granters of subprime mortgage loans from any obligation
to ever collect on them. That provision of Gramm's law is at the very
heart of the problem.
But the law went even further, prohibiting regulation of any of the
new financial instruments permitted after the financial industry
mergers: "No provision of the Commodity Exchange Act shall apply to,
and the Commodity Futures Trading Commission shall not exercise
regulatory authority with respect to, an identified banking product
which had not been commonly offered, entered into, or provided in the
United States by any bank on or before December 5, 2000. ..."
from an article by Robert Scheer


On Wed, 24 Sep 2008 21:58:32 -0700, Mark & Juanita
wrote:

Lew Hodgett wrote:

The subject takes me back to 1960, a few weeks before graduation.

Was in an industrial engineering class, the instructor had spent a
lifetime in the real world, and up to then, not much in the class
room.

The subject of the Edsel, the 1958 FoMoCo screw up, the largest
business screw up since the Curtis-Wright mess of 1940, was brought up
for discussion.

Still remember the instructors advice:

Class, if you are going to screw up, make it as big as possible.

They fire you for making small mistakes.

They won't fire you if the mistake is big enough because that will
make the guy who hired you look like an idiot.

Almost 50 years later, sounds like there is about to be a repeat
application of that advice.

Lew

Yep, despite the fact that the congress-critters like Barney Frank and
Chris "Country-wide" Dodd caused the problem by using Fannie Mae and
Freddie Mac as their own playground to essentially socialize the mortgage
market by setting standards so low that just about anybody could get a
loan to buy a house, these congress-critters are going to continue get
re-elected and now get even more taxpayer money to "manage" the bail-out
of the problem they caused.

Talk about the ultimate promotion.

--
If you're going to be dumb, you better be tough