B. Frank, C. Dodd - THE COLLAPSE OF AN ECONOMY

Ever since the current financial meltdown started to rear its head, all you hear is everyone screaming how it is Bush's fault for deregulating the banking system, which led to this crises. I am all for blaming folks when they are at fault. But I like to know who did what before I get upset and start pointing my finger at anyone. So I thought I would take a look at the actual actions that led to this crises we now find ourselves in. And there is plenty of blame to spread around for everyone.

The proposed Financial Services Modernization Act of 1999 would do away with restrictions on the integration of banking, insurance and stock trading imposed by the Glass-Steagall Act of 1933, one of the central pillars of Roosevelt's New Deal. Under the old law, banks, brokerages and insurance companies were effectively barred from entering each others' industries, and investment banking and commercial banking were separated

http://piggington.com/clinton_republicans_agree_to_deregulation_of_us_financial_system

That's right, Bill Clinton along with a Republican Congress passed the banking deregulation Act. It just didn't go into effect until 2000. So while you can say it happened under Bush, he didn't do it. So who also voted for it?

Nancy Pelosi, Barney Frank, Chris Dodd, Harry Reid, Diane Feinstein, Ted Kennedy, and John Kerry

The loudest voice's in congress who accuse Bush of the deregulation of the Banking system, causing the mortgage collapse., the Banking collapse, and the Wall Street collapse. Aren't they fickle friends.

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=106&session=1&vote=00354

http://bulk.resource.org/gpo.gov/record/1999/1999_H11551.pdf

A few details from the legislation.

The sticking point was the effort by Gramm to gut the Community Reinvestment Act, a 1977 anti-redlining law which requires that banks make a certain proportion of their loans in minority and poor neighborhoods

The Clinton White House threatened to veto the bill if CRA provisions were substantially weakened, in response to heavy pressure from the Congressional Black Caucus and the Reverend Jesse Jackson, whose Operation PUSH has made extensive use of CRA in its campaigns to pressure corporations and banks

The proposed deregulation will increase the degree of monopolization in finance and worsen the position of consumers in relation to creditors. Even more significant is its impact on the overall stability of US and world capitalism. The bill ties the banking system and the insurance industry even more directly to the volatile US stock market, virtually guaranteeing that any significant plunge on Wall Street will have an immediate and catastrophic impact throughout the US financial system.

So now throw Jessie Jackson into the mix. After all, it was all about letting the poor people buy houses. Mr Jackson was surprisingly silent after everything fell apart. I find that odd.

Since Congress can't ever leave anything alone, they started raising the goals for low income housing. By 2008 both Fannie May and Freddy Mac were required to have 56 percent of their loan purchases and mortgage guarantees for low-and moderate-income borrowers. But what else was going on.

With full knowledge of and approval of Frank and Dodd, Fannie Mae and Freddie Mac bundled these high risk loans into mortgage back securities and sold them as low risk, high quality investment grade products . And with support from fellow Democrats and ACORN drafted, passed and enforced draconian legislation which threatened lending institutions with punitive fines, class action suites, and racial quotas, which were enforced with the unlimited resources of the U.S. Government. In addition, this legislation also gave Acorn, and like organizations, the authority to stop bank mergers and otherwise interfere with the daily business operations of financial lending institutions

In 2005, President Bush tried to get Fannie and Freddie reform legislation through Congress and in 2006, Senator John McCain co-signed new reform legislation, which could have prevented this mortgage meltdown. Each time Frank and Dodd, with the solid support of the Democrats in congress, killed the legislation. Barney Frank’s response was, “They are worried about the “tiny little matter of safety and soundness, rather than concern about housing.”

Here is an excellent clip from 2004 with Frank, Waters, and other Democrats telling the Regulators to back off form Freddie and Fanny, even though he claimed they were cooking the books.

http://www.youtube.com/watch?v=_MGT_cSi7Rs&eurl=http%3A%2F%2Fhotair.com%2Farchives%2F2008%2F09%2F29%2Fvideo-democrats-insist-nothing-wrong-at-fannie-mae-freddie-mac-in-2004%2F&feature=player_embedded

So the stage is set, and the Democrats were making it worse, and fighting any regulation

Enter the Mark to Market accounting regulation. It had been around for a long time, but in November 2007 they changed how it worked. FSA 157, if you want to look it up. Basically, under the new rule, if you had to sell your assets today, what would they be worth. This is when the foreclosures started pouring in, consequently, the Mark to Market ratio was Zero for the banking assets. Here is where we got the term Toxic Assets. Oddly enough, the very day the G 20 was saying their farewell speeches, this accounting rule was changed again, easing the losses on Bank books. However, well after the government bought into the banks.

The timing has always seemed odd to me. If I was into conspiracy's, I would think this was done on purpose for a government to take over a Bank. Good thing I don't think like that.

The truth of the matter is, if Frank and Dodd had not kept pushing up the mandated low income loan percentages, and then allowed them to be bundled and sold, and had not blocked any regulation and reform. Odds are we would not have had a housing meltdown, or at least not a devastating one like we are still experiencing. And had the Mark to Market rule not been tinkered with, we would not have had the Banking collapse.

These are the same jokers that said it was all Bush's fault, and they will fix it for us.

I think they have fixed quite enough. So there you have it. If I was wearing my Tin Foil Hat, I would say this was done on purpose to bring down the American economy. I would rather think that, then they are so idiotic, they caused this by accident.

I mean really, is anybody that stupid?