Fed's seek further control...

[SteamWake]

In what is called a 'sweeping financial overhal' a bill is destined to land on the presients desk.

I see it as another layer of control by the federal goverment.

A new consumer protection bureau housed in the Federal Reserve would have independent funding, an independent leader and near-total autonomy to write and enforce rules. The government would have broad new powers to seize and wind down large, failing financial firms and to oversee the $600-trillion derivatives market. In addition, a council of regulators, headed by the Treasury secretary, would monitor the financial landscape for potential systemic risks.

"We've put in the hands of the president a very powerful set of tools for him to reassert American leadership in the world," Frank said.

Re assert? When / how did we lose it Mr. Frank.

Honestly I'd be willing to bet that a large majority of americans dont even know this legislation is in motion.

http://www.washingtonpost.com/wp-dyn...500675_pf.html

[mookiemookie]

There are those that see any system even slightly to the left of a Somalia-like anarchy as complete government oppression and control.

Radical deregulation led to the financial crisis. An abdication of traditional lending standards and practices led to the financial crisis. Obviously the industry is incapable of reigning in its own excesses, so naturally the pendulum will swing the other way and the Feds will reign it in for them.

[SteamWake]

Originally Posted by mookiemookie

Radical deregulation led to the financial crisis.

and here I thought it was reckless spending and a bunch of 'bad loans'.

"It's a great moment. I'm proud to have been here," said a teary-eyed Sen. Christopher J. Dodd(D-Conn.), who as chairman of the Senate Banking Committee led the effort in the Senate.

"No one will know until this is actually in place how it works. But we believe we've done something that has been needed for a long time. It took a crisis to bring us to the point where we could actually get this job done."

Wow Hillary is that you?

[krashkart]

Originally Posted by SteamWake

and here I thought it was reckless spending and a bunch of 'bad loans'.

I think mook was indicating that it was deregulation that opened the door to reckless spending/bad loans in the first place.



EDIT

Now that I think of it my stepdad mentioned something similar awhile back, too.

[SteamWake]

Fannie May and Freddie mac??

Wait werent those goverment programs?

[krashkart]

You got me, brother. I hadn't even heard of them before the markets went nose-down.

[mookiemookie]

Originally Posted by SteamWake

Fannie May and Freddie mac??

Wait werent those goverment programs?

They weren't the causes of the crisis. They were actors, but the non-bank subprime originators were making the lion's share of the toxic loans. FNMA and FHLMC were no more the singular cause of the crisis than any one of the individual banks such as Lehman, Bear or B of A.

[Stealth Hunter]

Originally Posted by mookiemookie

Radical deregulation led to the financial crisis. An abdication of traditional lending standards and practices led to the financial crisis.

Quite right. There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. The problem is one of irresponsibility and greed, with hard-working homeowners and billionaire villains each playing a role. To sum up, put the blame on:

• Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

• 109th Congress, which supported and passed a mortgage tax deduction that gave consumers a tax incentive to buy more expensive homes (and other assets).

• Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

• The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

• Mortgage brokers, who made bad investments, offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

• Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

• Wall Street firms, who also made bad investments and paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities which they invested in, and issued bonds using those securities as collateral.

• The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market and also slashed interest rates to make credit cheap.

• Mark-to-Market, an obscure accounting rule which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

• Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up (a lot like the attitude Americans had just before the Crash of 1929 with investing in the stock market).

• The Reagan administration, which deregulated much of the private sector for the sake of adhering to the public's interests, which allowed savings and mortgage institutions to invest recklessly with less government intervention (and reduced the government's power all through the sector).