Time for the Government to Start Playing Fair

Discussion in 'Current Events' started by Lue C Fur, Apr 20, 2010.

  1. Lue C Fur

    Lue C Fur Evil member

    This is a interesting article on our govts push for financial regulation., the timing of the Goldman Sachs SEC charge, and the bank/mortgage meltdown. The full article is at the posted link but i posted some of the highlights.


    http://www.foxnews.com/opinion/2010...on-obama-sec-fannie-mae-freddie-mac-mortages/

    Fraud charges were filed against Goldman Sachs on Friday and the Obama administration is portraying the announcement as an attempt to bring greedy and corrupt Wall Street under control. Yet, the timing of the case looks like more than coincidence with the Senate about to start debating President Obama’s plan for [COLOR=blue !important][COLOR=blue !important]financial[/COLOR][/COLOR] regulation and with the president himself set to kick off his tour to push the bill on Thursday. The charges of fraud look more like the government changing the rules of the game than actual fraud occurring.
    Politically the timing could not have been worse for Wall Street," noted Wall Street Journal Reporter Damian Paletta last Friday. "Goldman Sachs case could help Obama shift voter anger," pronounced a headline in the Los Angeles Times on Sunday.
    Alas, President Obama sits atop an administration that doesn't seem to understand the first thing about financial trades. Markets make profits by minimizing price swings over time or minimizing current differences in prices. Investors make profits by buying low and selling high, not the reverse. That smoothes out price swings. Yet, Mr. Obama demonizes futures trading as increasing market instability and for causing the recent [COLOR=blue !important][COLOR=blue !important]financial [COLOR=blue !important]crisis[/COLOR][/COLOR][/COLOR] when the opposite is true.

    Ironically, if the administration really wanted to go after mortgage-backed fraud, it needs to look no further than the government. As Alan Greenspan testified two weeks ago before the Financial Crisis Inquiry Commission: "While the roots of the crisis were global, it was securitized US subprime mortgages that served as the crisis' immediate trigger. The surge in demand for mortgage backed securities was heavily driven by Fannie Mae and Freddie Mac which were pressed by the Department of Housing and Urban development and the Congress to expand affordable housing commitments."

    Greenspan also witnessed, first hand, this pressure on banks to issue mortgages that they didn't want to sell: "I sat through meeting after meeting in which the pressures on the Federal Reserve -- and on, I might add, all of the other regulatory agencies -- to enhance lending were remarkable."

    Amazingly, a financial crisis created by government is being used to demonize private lenders who only gave out risky loans because of government pressure. Yet, Democrats continue to reward Fannie and Freddie with even more funds. Meanwhile, Goldman Sachs finds that it is charged with fraud because the Obama administration has changed the rules on what it means to "play fair." It is time for the government to start playing fair.
     
  2. unionman

    unionman New Member

    There is no argument here. The collapse was not caused by the Government wanting to help low income people get into affordable housing. It was caused by greedy banks like Goldman Sachs creating securities to sell, and because of that nobody cared who got a loan because they would bundle them up and sell them as securities.You could be working at Sam's club and qualify for a 150,000 loan. This created house prices to go up unrealistically and then the bubble burst.
     
  3. Lue C Fur

    Lue C Fur Evil member

    Ummmm...did you read the article and what greenspan said?
     
  4. 1989

    1989 Well-Known Member

    This goldman case will probably end up with egg on the governments face.
     
  5. unionman

    unionman New Member

    Greedy banks like Goldman made this pig what it became, its that simple.
     
  6. 1989

    1989 Well-Known Member

    If the loans were made within the laws. It shouldn't matter where they end up.
     
  7. unionman

    unionman New Member

    Very true that somebody should have seen this coming years ago and did something to stop the disaster to come but everybody was making money so nobody cared.
     
  8. 1989

    1989 Well-Known Member

    So then you agree housing was the heart of the problem, not banks.
    Greenspan warned congress many times that subprime credit markets could cause a housing bubble.
     
  9. unionman

    unionman New Member

    No, greed caused the problem.

    AAPL just reported 3.33. you stillgot that lvs up 5% totay
     
  10. 1989

    1989 Well-Known Member

    Better lending practices (standard down payment) would have prevented most foreclosures. Therefore we never would have heard of CDO's or Bernie Madoff.

    I sold off the shares I bought yesterday, but still hold 400 free shares for the year. Will buy more on a dip. Looks like appl 250 calls will do good tomorrow.
     
  11. moreluck

    moreluck golden ticket member

    I hope you owned Apple.....+$16 after hours......they reported and did very well and it didn't even include the new I-Phone.

    I am still amazed at the number of people on these housing shows that put nothing down and demand closing costs and other things. Why not just walk away...they have nothing invested in their home. That's wrong! We always put a minimum of 20% down on our homes. Our first home, I worked and banked my entire paycheck and we lived off hubby's check and got our first house, brand new, after 1 year of marriage. Other people we knew were getting homes, on special programs and they didn't have to put anything or very very little down....that was 42 years ago!!
     
  12. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    1989, I would have to think that interest only loans and variable interest loans caused more harm than not putting down enough money.

    I watched the Today show this morning and they were talking about strategic foreclosures. This is when the home has lost so much value and the homeowner is so upside down on his note that it makes more sense to stop paying the note and to simply walk away. What is your opinion on strategic foreclosures?
     
  13. Lue C Fur

    Lue C Fur Evil member


    Really? I guess im reading something different:

    Ironically, if the administration really wanted to go after mortgage-backed fraud, it needs to look no further than the government. As Alan Greenspan testified two weeks ago before the Financial Crisis Inquiry Commission: "While the roots of the crisis were global, it was securitized US subprime mortgages that served as the crisis' immediate trigger. The surge in demand for mortgage backed securities was heavily driven by Fannie Mae and Freddie Mac which were pressed by the Department of Housing and Urban development and the Congress to expand affordable housing commitments."

    Greenspan also witnessed, first hand, this pressure on banks to issue mortgages that they didn't want to sell: "I sat through meeting after meeting in which the pressures on the Federal Reserve -- and on, I might add, all of the other regulatory agencies -- to enhance lending were remarkable."
     
  14. UpstateNYUPSer

    UpstateNYUPSer Very proud grandfather.

    More, that $16 works out to about a 5% jump as Apple is priced above $250 per share! Thanks but I'll stick to penny stocks.

    When I bought my condo I had a VA loan so the govt backs the note. Nothing down, 3% funding fee, seller paid most of closing costs. Just refinanced to a 15 yr, 4.5% fixed VA. Closing costs under $4K rolled in to note. No out of pocket expenses.
     
  15. unionman

    unionman New Member

    Enhance lending has nothing to do with creating securities so that it doesn't matter if the loan defaults because we don't own it.
     
  16. 1989

    1989 Well-Known Member

    I just think that, as more says, 20% down helps. If I have 40K in my 200K home. Even if the value of the house goes down 50%. I would owe 160K on a 100K house, but I have 40K in it. I would hope that the value recovers, stay in the house because I need to live somewhere. But if I choose to walk away the bank would be in a better position. Personally, I would have a hard time walking away from that 40K.
     
  17. moreluck

    moreluck golden ticket member

    VA loans are always the exception .... at least to me. Vets earned the right for the zero down.....
     
  18. unionman

    unionman New Member

    My firt loan was VA at 13%.
     
  19. Baba gounj

    Baba gounj pensioner

    http://images.opensecrets.org/obama_top_contribs.htm?cycle=2008&cid=N00009638

    Barack Obama (D)

    Top Contributors


    University of California $1,591,395
    Goldman Sachs $994,795
    Harvard University $854,747
    Microsoft Corp $833,617
    Google Inc $803,436
    Citigroup Inc $701,290
    JPMorgan Chase & Co $695,132
    Time Warner $590,084
    Sidley Austin LLP $588,598
    Stanford University $586,557
    National Amusements Inc $551,683
    UBS AG $543,219
    Wilmerhale Llp $542,618
    Skadden, Arps et al $530,839
    IBM Corp $528,822
    Columbia University $528,302
    Morgan Stanley $514,881
    General Electric $499,130
    US Government $494,820
    Latham & Watkins $493,835
     
  20. scratch

    scratch Least Best Moderator Staff Member

    Goldman Sachs and its employess donated 5.9 million dollars to candidates in the 2007-2008 election cycle, with almost 3.5M of that going to DNC candidates. The nerve of a greedy Wall Street firm giving money to the corrupt GOP...........never mind, the GOP only got a 1.5M.