patrick.net

The justice department had no trouble prosecuting and jailing lots of bank officials during the savings and loan crash. The only difference now is the astronomical amount of money banks put into political contributions compared to the 80's plus the revolving door between government service and the financial industry.

ohomen171 says

We are all upset that officers of megabanks here in the USA have escaped prosecution for their horrendous crimes here in the USA. We hear the lame excuses that the US Justice Department does not have the manpower and resources to pursue these cases.

There are still homeowners out there who persist in thinking its only NORMAL that home prices appreciate at 10-15-20% a year...

The NAR are still proclaiming that "an investment in residential homes" outpaces the S&P stock index.

What exactly did the banks do that was already 'blessed by the government".. and was proclaimed as a good idea by the same people in congress who are seeking a pound of flesh from the bankers today ?

bob2356 says

The only difference now is the astronomical amount of money banks put into political contributions compared to the 80's plus the revolving door between government service and the financial industry

Try to convince someone, anyone, after the year 2000, that home prices actually can and do fall ? Try to explain how prices inflated past incomes in the late 80s and eventually fell even in the best places like LA and many metros in the US.
The S&L crisis, we saw wasnt the reason prices fell, nor was the criminal charges the final solution either.

WTF are you talking about? Are you seriously suggesting that everything banks/mortgage companies/insurance companies did the last 10 years was legal and aboveboard? I find it almost impossible to accept that anyone could hold that belief. Is this some kind of goof?

Criminal charges for criminal acts aren't the solution to what?

What criminal acts .. list them ?

People way over emphasize the mortgages as the problem, but rarely talk about the INFLATED PRICES, or take the self blame for the mistakes in personal judgement ... look around! $1m borrowing or even cash for no more than a $300K shack .. good luck.. how stupid are these CRACK buyers! They are debt junkies!

Many still act as if the past prices are somehow still justified TODAY...

WE still hear about a hope in price RECOVERY! Recovery to what ?

What does mortgages have to do with that ?

Read the book...http://www.amazon.com/Irrational-Exuberance-Robert-J-Shiller/dp/0691123357

bob2356 says

The justice department had no trouble prosecuting and jailing lots of bank officials during the savings and loan crash. The only difference now is the astronomical amount of money banks put into political contributions compared to the 80's plus the revolving door between government service and the financial industry.

There is another difference, namely the digital nature of economic transactions. When the Justice Dept. says the complexity of the crimes are immense and that the cost to prosecute, in time, money, and manpower, would be massive, they're not whistling Dixie. However, that doesn't mean we shouldn't try. America is the wealthiest nation in the world. I advocate a temporary transaction tax to fund prosecution if need be. It is too fundimental to the well being of this nation that these criminals see justice. We live in an era where military violence by nations has been replaced by economic violence by large, multinational instututions. In the same way we were willing to go after the axis powers in WWII and spend to contain the USSR during the cold war, we must be prepared to take on agressive economic actors, which are no less dangerous, causing no fewer deaths and far more destruction.

thomas.wong1986 says

What criminal acts .. list them ?

People way over emphasize the mortgages as the problem, but rarely talk about the INFLATED PRICES, or take the self blame for the mistakes in personal judgement ... look around! $1m borrowing or even cash for no more than a $300K shack .. good luck.. how stupid are these CRACK buyers! They are debt junkies!

I still believe you are yanking my chain, you can't honestly believe this stuff. Banks have a responsibility to make loans that can be repaid. When they have a boiler room making loans that they know can't be repaid, then packaging and reselling them as top grade investments that's fraud. The fact the Justice Department doesn't want to do it's job because it's too much work or they are being told not to doesn't change that fact. Amazingly financial fraud investigations by the justice department is at the lowest point in 30 years.

Bob, I'm guessing you know nothing about the Community Reinvestment Act - initiated by Jimmy Carter and greatly expanded by William B.J. Clintion. The CRA FORCED banks, brokers and S&L's to gut normal lending requirements and make loans to non-credit worthy borrowers...or else.

Therefore your statement: "Banks have a responsibility to make loans that can be repaid", while normally true, was not true at all under the mismanagment of our federal government. The result, as you know, was a massive misallocation of funds and the pain that Americans have been feeling since 2006. Thanks Uncle Sam!!

bob2356 says

The only difference now is the astronomical amount of money banks put into political contributions compared to the 80's plus the revolving door between government service and the financial industry.

Yeah that's 80% of our economic problems right there. America has become a kleptocracy.

thomas.wong1986 says

What exactly did the banks do that was already 'blessed by the government".. and was proclaimed as a good idea by the same people in congress who are seeking a pound of flesh from the bankers today ?

Don't forget where the people in congress get their money: the bankers. The stuff you see on TV is just grandstanding. It's political theater to make you think they actually give a shit.

futuresmc says

We live in an era where military violence by nations has been replaced by economic violence by large, multinational instututions. In the same way we were willing to go after the axis powers in WWII and spend to contain the USSR during the cold war, we must be prepared to take on agressive economic actors, which are no less dangerous, causing no fewer deaths and far more destruction.

True. But that will never happen.

The wealthy were threatened by foreign powers in WWII. With economic warfare, the wealthy benefit the most.

bob2356 says

I still believe you are yanking my chain, you can't honestly believe this stuff. Banks have a responsibility to make loans that can be repaid. When they have a boiler room making loans that they know can't be repaid, then packaging and reselling them as top grade investments that's fraud. The fact the Justice Department doesn't want to do it's job because it's too much work or they are being told not to doesn't change that fact. Amazingly financial fraud investigations by the justice department is at the lowest point in 30 years.

No! this was the Acts of Govt to spread homeownership... and if the banks didnt play the game they got taken to the cleaners.

Liberals like to stick their greedy hands into Homeownership, Health care, Education, etc.... and when it goes bad it goes bad for all of us.

Honest Abe says

Bob, I'm guessing you know nothing about the Community Reinvestment Act - initiated by Jimmy Carter and greatly expanded by William B.J. Clintion. The CRA FORCED banks, brokers and S&L's to gut normal lending requirements and make loans to non-credit worthy borrowers...or else.

Abe I'm guessing that you haven't read any of the multitudes of studies that point out the the CRA had almost nothing to do with the housing bubble. Or managed to somehow avoid thinking about the fact that the vast overwhelming majority of bubble loans weren't CRA loans. No of course not, that would require looking at facts,not feelings.

thomas.wong1986 says

No! this was the Acts of Govt to spread homeownership... and if the banks didnt play the game they got taken to the cleaners.

Some examples? Which banks didn't play the game and got taken to the cleaners? Which acts were these? What are acts of govt anyway? Is that like laws, regulations, what? Acts of govt like repealing Glass Steagall. Where in the world do you suppose that idea came from? The common people sitting around their kitchen tables writing to congress begging to allow their commercial banks to get into risky investments? How about the SEC repealing the limits on leverage for investment banks in 2004? Surely that must have been the results of a grass roots movement, perhaps the labor unions you think? The banks certainly couldn't have been involved in it could they?

Cut the crap. The entire crises was manufactured by the banks greed and total lack of responsibility, then when the spam hit the fan they went begging to be bailed out of their own stupidity.

bob2356 says

Acts of govt like repealing Glass Steagall. Where in the world do you suppose that idea came from?

parts of Glass Steagall were dismantled over many decades past... if you want GS back.. fine.. but that would have not prevented having a Housing Bubble !

http://en.wikipedia.org/wiki/Glass–Steagall_Act#1966_to_1980_developments

bob2356 says

Which banks didn't play the game and got taken to the cleaners? Which acts were these? What are acts of govt anyway?

Andrew Cuomo: CRA Should be Abused to Force Banks to Give Risky Loans

http://www.PFlYmLAMbrw

http://www.Lr1M1T2Y314

bob2356 says

Where in the world do you suppose that idea came from? The common people sitting around their kitchen tables writing to congress begging to allow their commercial banks to get into risky investments?

Sort of.. which if reported to the FDIC can as in the NYC case above with Cuomo leave a $2+BILLION in penalties.

http://articles.chicagotribune.com/keyword/community-reinvestment-act

It's entirely possible that the CRA contributed to the housing mess. But I don't think impoverished inner city residents were buying $500k shacks in Marin county.

wthrfrk80 says

It's entirely possible that the CRA contributed to the housing mess. But I don't think impoverished inner city residents were buying $500k shacks in Marin county.

perhaps Strawberry pickers making .. what $15K a year buying $600K home in CA Central valley!

THE VAST majority of the insanity was from common people who infact inflated prices.. WAY WAY OVER THE TOP! Yes, they could afford it, but it didnt make sense! Why would anyone think a house in a city say X which back in mid 90s was around $200K would somehow expect to be $1M in a few short years.

Yeah, "liar loans" and "ninja loans" are always a bad idea.

But was it the CRA that required the practice? Or just fraudsters that knew they could pass off the toxic loans to "investors."?

I have no idea how accurate the following description is, but hey, it's funny. So it must be true!

http://www.slideshare.net/guesta9d12e/subprime-primer-277484

thomas.wong1986 says

Sort of.. which if reported to the FDIC can as in the NYC case above with Cuomo leave a $2+BILLION in penalties

thomas.wong1986 says

Andrew Cuomo: CRA Should be Abused to Force Banks to Give Risky Loans

So riddle me this? How did Cuomo and the CRA create a world wide housing bubble and crash? Pretty powerful law that CRA, pretty influential man that Cuomo.

Anyway the idea of the CRA as the cause of the housing bubble has been so totally discredited everywhere but the extreme right wing tin hat web sites that I'm just amazed you would even bring it up.

So you are saying the banks had absolutely nothing to do with repealing the laws that kept them from running wild and creating the biggest economic disaster since the great depression, which just coincidentally was caused by banks and finance being allowed to run amuck also.

thomas.wong1986 says

perhaps Strawberry pickers making .. what $15K a year buying $600K home in CA Central valley!

Provide one example of a 600k loan made under CRA. That's so absurd that you just moved into serious trolldom.

He can't provide an example.

Never let facts (or lack thereof) get in the way of a good ideology that blames poor people for everything.

wthrfrk80 says

He can't provide an example.

Never let facts (or lack thereof) get in the way of a good ideology that blames poor people for everything.

No, say it ain't so joe. I would have never guessed. :-)

It's a good think most rich bankers aren't black. Otherwise the far-right would be REALLY confused.

bob2356 says

So riddle me this? How did Cuomo and the CRA create a world wide housing bubble and crash? Pretty powerful law that CRA, pretty influential man that Cuomo

you mean you didnt watch the video with Cuomo stating higher rates of default will actually happen, but per Cuomo Its OK!. You talk of Criminal Acts.. yet if someone like Clinton or Cuomo puts pressure on banks extend lending to far more risker homebuyers which would cause losses and ultimately the tax payer would be on the hook.. Both Clinton and Cuomo are immune and still allowed to have a political career.. We dont even hear that it was bad judgement!

And even the management of Fannie Fae and Mac havent been prosecuted.. why! they are juiced into the government.

And even today the GSE losses are over 100 Billion and still counting.. makes Enron look like a pimple!

bob2356 says

Anyway the idea of the CRA as the cause of the housing bubble has been so totally discredited everywhere but the extreme right wing tin hat web sites that I'm just amazed you would even bring it up.

What caused the housing bubble! irrational pricing of RE by the public...
Thats what caused the bubble!

It certainly wasnt the bankers that were telling you Home Prices would go up 30-50% a year! At what point did Bankers proclaim everyone should be buying up RE.. if not one house make it 2 or 3.
Certainly Govt involvement in RE made it even worse.

wthrfrk80 says

It's a good think most rich bankers aren't black. Otherwise the far-right would be REALLY confused.

Frank Raines, was never prosecuted for similar SEC violations commited by Enron! Perhaps his ties to Clinton made that possible.

I expect this to go about as well as the Murdoch "phone hacking" scandal. Meaning a bunch of hot air expended, and in the end none of the big fish are wearing handcuffs.

I tend to agree that loaning money to "anyone" is a bad idea. If ACORN and other groups played the "race card" to get banks to make toxic loans, then shame on them.