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What Was Really Responsible for the Housing Collapse?
You know, I'm getting tired of hearing, "It was all Bush's fault." There's plenty of blame to go around, but these direct quotes, from the congressional records (date or committee noted), and directly from interviews with these parties, should help explain part of the financial meltdown.
In 1999, Congress repealed the Glass-Steagal act which, in essence, deregulated certain banks and banking practices. A Republican congress passed it, and Pres. William J. Clinton (D) signed it into law.
In April, 2001, the Bush admin.'s budget request contained the following: The size of Fannie Mae (FM) and Freddie Mac (FMc) is "a potential problem." because financial trouble in either could cause "strong repercussions in financial markets." This was the first warning, but few even heard it.
In 2003, this warning was upgraded to a "systemic risk", that could spread beyond the housing market. In the fall of 2003, the administration was pushing hard to get congress to act.
on September 10th, 2003, Treasury secretary John Snow, in testimony to congress, said, "We need a strong, world class regulatory agency to oversee the prudential operations of Government Supported Enterprises (GSE's- i.e. FM and FMc), and the safety and soundness of their financial activities."
Dem. Representative Barney Frank, then ranking member of the house Financial Services Committee, replied with, "FM and FMc are not in a crises. The more people who, in my judgment, exaggerate a threat of safety or soundness, the more people conjure up the possibility of serious financial losses to the treasury, which I do not see,".... "and even if there were a problem, the federal government doesn't bail them out."
No legislation was brought forward. (Congressional record, Sept. 10, 2003)
Now, on Sept. 24th, 2008, Rep. Frank, in a Fox interview, said this, "Years of failure to regulate have led to irresponsible actions by the private sector to get us into this trouble."... "If we don't do something, things will get worse. I do think years of irresponsible failure to regulate have led to this situation."
Oh, really? Does anyone see the irony here?
In another House Financial Services Committee meeting on Feb. 17, 2005, Fed Chairman Alan Greenspan, (Bush Admin.) testified, after FM had admitted major accounting errors. He said, "Enabling these institutions to increase in size.... we are placing the total financial system of the future at a substantial risk." (Cmte. records)
On April 6, 2005, he added, "If we fail to strengthen GSE regulation, we increase the possibility of insolvency and crises."
Again Democrats defended these institutions. Dem Senator Charles Schumer said, " I think FM and FMc, over the years, have done an incredibly good job, and are an intrinsic part of making America the best housed people in the world."
By looking backward, ignoring the flashing red lights, he failed to recognize the oncoming train wreck.
On the Senate floor, on May 26, 2006, Sen. John McCain said, " For years I have been concerned about the regulatory structure that governs FM and FMc, and the shear magnitude of the companies... the GSE's need to be reformed without delay." (Cong. Record)
He had co-sponsored the 'Federal Housing Enterprise Act (S-190) which made it out of committee, with all of the Democrats voting against it, but died on the floor due to lack of support. (Then) Senator Obama did not weigh in on the bill, but later took credit for warning congress of the problems.
Okay, so now they all agree there is a problem and all of them warned us about it. (So sad.) Instead of working together to find a truly reasonable solution, however, they got involved in nasty partisan name-calling.
According to word from the House, Speaker Nancy Pelosi fired the first shot by telling the Republicans she wanted them to deliver 100 votes for the TARP bill. They obviously balked since they had no say in what the bill contained. She then had the audacity to call them "unpatriotic" for not giving her what she wanted.
As I said, there's enough blame for all. Someone should have shouted FIRE, but would any of us have listened? Our congress didn't, and it really tics me off to see the very ones who caused this mess try to claim they were blind-sided, and now attempt to convince me they can be our saviors.
Methinks it's time to boot some of the hypocrites.
One solution many businesses are turning to in order to make financial management less costly and less risky is the introduction of reloadable MasterCard credit cards, also known as prepaid credit cards.
Originally, the concept about the payday loan was to offer customers a short-term, high-interest loan with no credit or background checks. Customers simply write post-dated checks from their personal checking accounts to get the money and upon returning, they repay the principal plus interest and lending fees.
Both businesses and people can order checks online. Anyone with a checking account is eligible. Many times the bank-provided checks don't provide everything people want when it comes to their checks. More often than not checks online are cheaper than bank provided versions.
There have been plenty of headlines lately about the outrage consumers are expressing over the proposed debit card usage fee that many banks announced. The new debit card fee would zap as much as $5 per month from your account if you used your debit card for purchases (not at the ATM). Florida credit unions have seen membership surge as customers leave big banks, reports the St. Petersburg Times.
Based on the rapid retreat by banks to charge us for using our debit cards, there's no doubt that American consumers are unified in their outrage. Case closed. However, there is a fair fee that banks should impose on us immediately to help recoup the massive revenue loss that banks suffered when the government passed regulations which capped off swipe fees. Shut the front door! It is only fair!
A hardship letter for a short sale can be of major importance to a home owner who finds it difficult to continue making payments on there mortgage. Its vital that this letter include all of the factors that make repayment of the loan impossible. It could be the loss of a job, a major medical expense, divorce or other situation. Learn these key elements and more by reading this article.
Opening online savings accounts during these tough economic times might not seem like a practical thing to do. Many family budgets are stretched to the max with little, if any, money left over after expenses. So how can you possibly save money in this scenario? This article will offer some guidelines on how to maximize your personal savings.
Why are seemingly smart business leaders so quick to issue a loan guaranty and clueless about the contingent financial risk? Society would enjoy greater financial stability from a better understanding of the truth and consequences of loan guarantees. Here are seven truths about business loan guarantees that every borrower and guarantor must know.
Sending money for your loved ones, friends or affiliates overseas through postal mail is not only anything of history, however takes a long time to achieve it's destination as well. Today, using a digital support that specializes in cash transfers abroad is really a far better method to deliver cash.
Direct loan consolidation comes into the picture when most students borrow money at the time of going to college. One can be overwhelmed with student loans, especially when they borrow money from more than one lender.
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