Glass-Steagall had NOTHING to do with the 2007-08 financial meltdown

[banned from Kos]

Why? Glass-Steagall only prevented Investment Bank and Commercial Bank mergers!

So, who was never affected by Glass-Steagall?

Lehman
Bear Stearns
Merrill
WaMu
Wachovia
Fannie
Freddie
AIG
IndyMac
Countrywide
Thornburg

NONE of these tried to combine I-banks and C-Banks!

plus THousands of others!

[sabrina 1]

1. Lol, well at least you are predictable.

[freshwest]

4. Like Sands Through The Hourglass, So Go The Days Of Our Lives! LOL!

Last edited Fri Apr 20, 2012, 09:09 PM - Edit history (1)

[sabrina 1]

68. Lol, stop! I'm supposed to be cooking dinner!

[banned from Kos]

5. How did Glass-Stagall bankrupt Lehman?

Seriously. I want to probe unknown territory.

[sabrina 1]

11. I could tell you have not 'probed that territory' before for some reason.

Here's a little history of deregulation and how it led to virtually opening the vaults to greedy Wall Street Gamblers and ended up crashing the World's economy:

How Deregulation Eviscerated The Banking Sector Safety Net and Spawned the U.S. Financial Crisis

The ultimate prize was to be the undoing of the Glass-Steagall Act of 1933. Glass-Steagall, officially known as the Banking Act of 1933, mandated the separation of banks according to the types of business they conducted. Investment banks, whose securities related activities resulted in relatively large risks, were to be separate from commercial banks, whose depositors needed greater protection. The Act created deposit insurance and the government wasn't about to allow taxpayer-backed insurance of commercial bank deposits to be exposed to securities related risks. It was a prudent and sensible separation. Bankers tried for years to undermine and overturn Glass-Steagall, but it took time.

Why do you think they worked so hard to undo all the regulations that would have prevented the meltdown, and even now, still oppose any new regulations?

Maybe they just think of deregulation as a symbolic gesture, or something? Not ibeneficial to them in any way, they just like the idea of the appearance of 'freedom, and liberty'? They are grown ups, they would never, ever take advantage of it.






.

[banned from Kos]

16. How did G-S bankrupt Lehman? You have no answer.

because you have no clue.

[sabrina 1]

21. That's YOUR question, but directed at someone who did not make that claim. .

Neat, but very old trick. Make an accusation in the form of a question, then demand an answer to something that was never stated.

GS was the final step in the years-long effort to deregulate Wall St. For some reason it was considered a very important step for the Wall Street Gamblers. Do you know why?

Are you for re-instating GS, btw?

[banned from Kos]

49. No. Glass Steagall is retro-skank so I prefer Dodd-Frank

which is 500x stronger.

[sabrina 1]

59. So you admit that deregulation was the cause of the Meltdown.

I thought you said it wasn't!

[Chan790]

83. No, it's not.

Dodd-Frank is a monumentally-insider-corrupted bill written with holes in its' protections that you could drive the shuttle transport through written by two members of Congress who took monumentally-large piles of money from the same people they were supposed to be regulating. It's hardly an improvement on Gramm-Leach-Bliley.

Congress people got paid, the public got sold-out and everybody took their bows and accolades.

1.) Fix Dodd-Frank so it actually is enforceable and prevents the very things it was meant to appear to prevent but doesn't.
2.) Restore Glass-Steagall and force all the large banks to completely divest their investment divisions.

[KoKo]

50. Sabrina...don't fall for this...we just lost a poster who got tons of posts in argument..when giving

NO LINK!

Pattern of post and reply... Familiar. ???? STILL WAITING...

It's really hard to engage in conversation or discussion with someone who puts out a Declaratory Sentence...but, give no link to verify anything that can be discussed.

Sound Familiar. The other one also had a huge post about how they were "Banned from Kos" and while I'm sure that Kos bans many...the similar situation...so close to the demise...does cause one to ask questions.

Sometimes many of us forget to post a link ...but, we do post as soon as we are reminded...

I'm waiting for the link to "Banned from Kos" that will verify his OP.........as something worthy of a discussion or just something to waste folks time here....and the post will go on an on and on gathering comments and a few recs...but, will be more familiar to tactics of a "recent experience" rather than just an honest "flub up."

We shall see.... but, I'm not waiting around... Hint...Hint..

[sabrina 1]

60. Hi KoKo,

really nice to see you btw. Good post and you are correct. I rarely bothered with the one you mentioned, knew what the game was and mostly ignored their posts.

[freshwest]

25. LOL!

[fascisthunter]

14. LOL... no kidding

[freshwest]

2. I'm so relieved! So it really was the dumb homeowners after all. Nothing to see here, move along.

[banned from Kos]

6. Right, the banks gave loans dumb homeowners could not repay on purpose.

Do you know how stupid that is?

[sendero]

17. Do you know WHY they did it?

Apparently not.

[freshwest]

22. Not at all, if you know how to play the game and insured yourself against the loss:

You call them stupid? They're not even naive:

http://www.mcclatchydc.com/2009/11/01/77791/how-goldman-secretly-bet-on-the.html

http://www.andyross.net/goldman_sachs.htm

http://www.dailyfinance.com/2011/01/20/whos-to-blame-for-the-mortgage-mess-banks-not-homeowners/

http://www.zerohedge.com/article/why-did-banks-give-home-loans-people-who-they-knew-couldnt-pay

http://answers.yahoo.com/question/index?qid=20100624124822AAQJLP2

Not everyone thinks the banks were stupid and getting rid of Glass Stegall was unimportant:

http://billmoyers.com/content/glass-steagall-dodd-frank-and-the-volcker-rule-a-primer-and-resources/

Google the Neil Bush, Keating Five and the Savings and Loan Crisis. First among those hits:

http://en.wikipedia.org/wiki/Keating_Five

This was just the replay. Then it was FDIC took the hit, then comes TARP. Same game, screwing the taxpayers by extorting the government into keeping the financial system solvent, because they know they government can't let them go down, all those pensions, all those businesses, even the MIC.

A nasty, brutal game has been played on all of us more than one time. The technique was a little bit different and they snuck through the cracks, but it's the same manufactured crisis. They knew how much was at stake and who would be stuck with the bill. Stupid? n/t

[upi402]

75. Exactly! The OP is suspect.

It makes good flame-bait I suppose.

They created risky loans, insured losses, and combined them to dump them.

Sad that people are still blinded by the rotting propaganda still out there.

Neil Bush was saved from investigation as Bush I dropped bombs on Iraq War I. Cancel cancel!
Silverado Savings anyone?

[freshwest]

78. Let's check the language here, too: Skank, probe, stupid, etc. RW spew if there every was one.

Yes, the Bush Crime Family had their fingerprints all over this one too... Related to the major players who benefited from the bailouts...

But still we get this flamebait which never answered questions or responded to answers, but instead engaged in more abusive language. TOS material?

IDK and I don't alert. I trashed the thread he created when he ran away from this one, so I don't have to see his next attempt at wasting everyone's time. Nothing to learn here except this was Pathetic.

[geckosfeet]

3. Countrywide, now owned by BOA.

[freshwest]

7. But I like BOA, so full of Christmas Cheer:

[Cali_Democrat]

8. Totally wrong

The repeal of Glass-Steagall allowed traditional banks to engage in riskier activity which was usually done by investment banks or hedge funds. Chase, Bank of America and others now essentially also engage in speculative trading which is totally different from traditional banking.

[banned from Kos]

23. Bullshit, Chase, BoA, Morgan , Wells et al are the WINNERS!

tell me how the LOSERS benefitted from Glass?

Lehman. Bear, WaMu..etc etec etc.

[Cali_Democrat]

39. They were winners? At taxpayer expense?

Perhaps you missed the part where they required hundreds of billions in taxpayer money for bailouts because of speculative activities and increased risk they took on with regard to mortgage backed securities.

[banned from Kos]

51. That is right! They are winners. Losers file chp 11 or are seized.

I listed the losers - Lehman, WaMu, IndyMac, Bear, etc.

[Cali_Democrat]

62. You might as well delete this post

Save yourself the embarrassment.

[MadHound]

9. Thanks, but I value the opinion of experts

Such as Robert Kuttner, Joseph Stiglitz, Elizabeth Warren, and Robert Weissman, among others, over the unsubstantiated opinion of some anonymous internet poster.

[banned from Kos]

10. Link me to an article any of those claim G-S alone caused the collapse?

You will fail.

[Make7]

12. You should probably edit your thread title. ( n/t )

[Junkdrawer]

13. Retreated from "Nothing to do with the crash" to "Didn't do it alone"

Quite a retreat.

[sabrina 1]

24. Lol, it didn't take long either.

I love how he claims WE made the claim that GS alone was responsible. Too bad people here are too smart to fall those tricks.

[freshwest]

26. At least the 'probing' didn't result in a 'sex thread.' I was expecting that with no link given.

And no, Sabrina, I will not go there.

[sabrina 1]

29. Lol, I know, I was worried for a while!

This is so much fun! I remember 'probing some of this territory' before. It seems so familiar for some reason!

[freshwest]

35. Uff Dah!

[sabrina 1]

19. No one said 'GS ALONE caused the collapse. That was the ultimate goal after years of other

legislation leading towards complete deregulation. There were other steps along the way but GS was the major accomplishment in completing the goals of the deregulators.

Not to mention all he Wall St, unelected officials in our government who facilitated every wrong step along the way, from Greenspan, Rubin, to Paulson, to Geithner and many others. There should be a ban on these people being in Government. Their conflicts of interest have now been fully exposed at so much expense to people all over the world.

[fascisthunter]

15. stop frontin'

[shimonitanegi]

18. It was caused by the top 1 percent's relentless greediness,

Bush's massive tax cut for the super wealthy, Greenspan's prolonged easy money policy and the extent of leverage taken. Some made unprecedented profits by betting on the collapse of the markets. Also, excessive short selling aggravated the crisis further.

[Octafish]

20. Got a link?

Everything I've read on the subject says it contributed mightily. William K. Black explained the subject to Bill Moyers:

http://www.pbs.org/moyers/journal/04232010/transcript1.html

[freshwest]

27. No link, but plenty of accusations and looking down on hard-working Americans who got screwed.

[sabrina 1]

31. Where did he go?

Maybe to probe some new territory or something? Lol!

[freshwest]

34. Just say NO, girl. It's not worth it!

[sabrina 1]

36. So true.

I will take your advice

[freshwest]

42. Very wise, grasshopper. I have to leave this thread to stitch my sides up from laughing.

[xchrom]

28. That was a great piece. Interesting the # of replies

Where the OP is decidedly PWned & the OP doesn't reply.

[freshwest]

37. I heard heavy breathing off to one side of this thread, though.

[sabrina 1]

58. Lol, is that what that was?

I am so glad I am not the only one who heard it!

[freshwest]

65. Yes, I found out what that was...

I am so out of here!

[Junkdrawer]

30. ^^^ THIS ^^^^

Full video here:

http://www.pbs.org/moyers/journal/04232010/watch.html

[freshwest]

38. Thank you so much for that, but this thread says:

[banned from Kos]

32. Give me a plausible reason Glass-Steagall caused Lehman or WaMu to fail.

you cannot do it.

[Junkdrawer]

33. Did you read the transcript or watch the video?

Glass-Steagall, according to Tim Geithner no less, created a regulatory black hole that prevented the Fed from stopping the behavior that caused their demise.

[GoCubsGo]

47. Nope.

The REPEAL of restrictions in Glass-Stegall (a.k.a. the Gramm-Leach-Bliley Act) created that black hole. Glass-Stegall WAS the regulatory mechanism up until then.

[banned from Kos]

40. No one respects William Black. Quote me a Krugman or DeLong

not some has-been desperate to peddle his book.

[xchrom]

44. ?!?!

Dude - you have been PWned multiple Xs in this thread and your 'come back' is no one respects William Black?!?

[Junkdrawer]

45. Is Tim Geithner a "has-been desperate to peddle his book"????

It was the excuse he gave during his congressional testimony on the crash:

....

TIMOTHY GEITHNER: In our system the Federal Reserve was a fire station, a fire station with important, if limited, tools to put foam on the runway, to provide liquidity to markets in extremis. However, the Federal Reserve, under the laws of this land was not given any legal authority to set or enforce limits on risk-taking by large financial institutions like the independent investment banks, insurance companies like AIG, Fannie and Freddie, or the hundreds of non-bank financial firms that operated outside the constraints of the banking system.

BILL MOYERS: Now, what I hear is the gentleman who was then chairman of the New York Fed, saying, I, we had this job to do, but we didn't have the authority to do it.

WILLIAM K. BLACK Yeah.

BILL MOYERS: We were the fire truck, but we didn't have any water in our hose.

WILLIAM K. BLACK Yeah, this was pretty disingenuous, because other portions of his testimony, he explained why there was this gap. And he said it was because we repealed Glass-Steagall. Well, the Fed pushed for the repeal of Glass-Steagall.

BILL MOYERS: Glass-Steagall was the act that was repealed in the late nineties that separated regular banks from investment banks, right?

WILLIAM K. BLACK Correct. So this is a deliberately created regulatory black hole, created by the Fed. And then the Fed comes into the hearing, eight years later, and said, we were helpless. Helpless to do anything, because of a black hole we designed.

....

[banned from Kos]

54. Tell us how Glass Steagall caused Lehman (or others) to fail.

I won't wait. No one can.

[Junkdrawer]

57. Well, I guess I could petition God, but He's busy at the moment...

Never returns my calls when I want. Who does He think He is?

[CreekDog]

72. It didn't, its presence would have likely prevented it

not sure if your post is just plain ignorance or just bold lying about what Glass Steagall was and how it would have affected the issue you're talking about (had it been in place).

it's that it wasn't in place and you're saying it was is what makes this post completely ignorant, however if you actually do know what you're talking about, then this OP makes you completely dishonest.

[Octafish]

48. William K. Black is a well-respected forensic economist who helped jail the S&L crooks.

The guy's a forensic economist, for Pete's sake, who investigated and prosecuted the Savings and Loans frauds of the late 80s and early 90s. You must have heard of it. If not, read this:

Know your BFEE: They Looted Your Nation’s S&Ls for Power and Profit

http://journals.democraticunderground.com/Octafish/235


Here's what he said about the great Wall Street bailout and what's needed to prevent it from happening again, as well as for prosecuting the guilty:

The Two Documents Everyone Should Read to Better Understand the Crisis

http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html


Read his book: "The Best Way to Rob a Bank Is to Own One." You'll find "Control Fraud" is the key concept.


BTW: What books have you written, banned from Kos? Any of them about the rich getting richer at the expense of the middle class and poor?

[denbot]

41. COD's, and other derivatives would not have been allowed under Glass-Steagall

CDO's and other derivatives were investment vehicles that formerly traditional banks created, marketed, and eventually were poisoned by. Glass-Steagall was there to separate investment banking speculation from traditional banking practices. Fanny and Freddy were guaranteers of farmed-out loans from commercial banks, many of which were sub-prime mortgages.

Sub-prime mortgages were needed because they presented the high risk tranches, that were required to justify the CDO's and other default swap investment vehicles.

Here is a link to a Lehman Brothers article

http://articles.businessinsider.com/2010-03-17/wall_street/30061008_1_lehman-brother-lehman-report-valuations

[laundry_queen]

67. +1 nt

[KoKo]

43. NO LINK? Are you trying to cover for LoZoccolo? He/She never gave links for Inflammatory Posts

Either.

This is such a PIECE OF CRAP. I'm hoping that the good folks from DU Group SMW will come up here and singe your ears off for this POS post.

Now...I could give you links to articles, books and whole Blogs devoted to talking about what Repeal of Glass-Steagall did in setting up the downfall of our Banks and repercussions that stretched all the way to the Euro-Zone. But, it would take too much time for you to read.

And...since yu give NO Link..to your article ...I will not unleash my treasure trove because it's not worth my time...or probably even the time of the "SMWatchers" here on DU-3 back to DU-2 who have reams and whol libraries full of info about this.



I do think this is some resurrection of thought we hoped had passed on ...given this is a Democratic Website and Dems are supposed to be "For the People" as opposed to the WALL STREET REPUG...MONEY BAGS...

[pscot]

53. Gave? As in, no longer posting?

[freshwest]

73. Fled from here and started another thread offering $1,000 since he can't make his case here.

[freshwest]

74. I don't think it's LoZ, but he won't answer my links or anyone else's.

Claims on his new thread, referring to only one link here, that he wants proof. Refuses to answer any of the others. Banned from another site.

Don't know why this is going on here. You're right, this is an inflammatory thread with nothing but the charge with no links. Then saying stupid, but won't answer what...

[October]

46. link? or are you just talking to yourself? Arguing with yourself? /nt

[Octafish]

52. banned from Kos is angry about this, I believe...

Ex-CITIGROUP CEO Blames Glass-Steagall Repeal for Financial Crisis

Freakin' A.

[October]

81. Thank you, Octafish.

I actually saw that thread - but there seems to be a disconnect between it and bfk's thread, the latter of which seems merely for antagonistic purposes.

[jsmirman]

55. Why would you post on something you know nothing about?

Your OP is uninformed.

So, who was never affected by Glass-Steagall?

Lehman
Bear Stearns
Merrill

Wrong.

http://voices.yahoo.com/olin-business-school-study-finds-insider-8195633.html

We created pitches that listed both the team that would help float a company's debt and the equity research analyst who would provide coverage of a company as we attempted to woo companies to take on our investment banking services.

Read this article for a good explanation of why you need outsiders (uncompromised research analysts) looking in at the pools of crap to determine if, indeed, they are pools of crap:

http://www.marketwatch.com/story/would-glass-steagall-save-the-day-from-credit-woes

Read this article to understand how dangerous it is to have the same people who are creating the pools of crap selling the pools of crap to their brokerage customers:

http://www.bergenjerseyforeclosures.com/blog/info/entry/repeal_of_glass_steagall_act

The bergen article also recommends the pbs production someone else mentioned in this thread.

When you're done with this reading, come back and tell us what you've learned.

Btw, I worked for number one on your list. I left many, many years before the fall - on my first day I was appalled by the lack of factual separation between departments and functions that were supposed to be separate. I was recommended for very early promotion (by the end of year two) and said thanks, I'm going to go write. Working there was just not what I wanted to do with my life. By the way, not everyone there was a bad person. Many people were, but not everyone.

[BumRushDaShow]

56. A couple years ago, someone on DU linked to this

interesting article with a recent timeline for activities related to financial regulation and Glass-Steagall:

http://www.netrootsmass.net/selise/financial-regulation-timeline/

Basically, with Graham-Bliley-Leach allowing the banks that you listed to buy entities such as brokerage/securities firms (i.e., "firms" not "banks", which was something that was originally prohibited by Glass-Steagall because they were designed for investment), and then incorporating those brokerage services into their banking businesses, the subsequent failure of speculative commodities like those mortgage-backed securities, helped to bring the whole house of cards down.

[Octafish]

61. Just the other day, things got worse -- We the Taxpayers got put on the hook for the crooks' frauds.

Big Business gets a break on financial reform

WASHINGTON (CNNMoney) -- Big business scored a major win Wednesday when two regulatory boards agreed to limit the impact of tough rules to regulate the complex trades that helped spur the 2008 financial crisis.

Regulators have been struggling for months to figure out who should be included in a new crackdown of swaps or derivatives -- complex financial bets derived from other financial products such as the price of jet fuel or mortgages.

Derivatives were the key reason that American taxpayers were on the hook for the American International Group (AIG, Fortune 500) bailout in 2008. Derivatives also threatened to take down the global financial system when Lehman Brothers collapsed.

When Congress passed Wall Street reforms in 2010, lawmakers left the big decisions of how to regulate derivatives up to supervising agencies. Generally, the Democratic-controlled Congress wanted swaps to be more transparent and safer.

CONTINUED...

http://money.cnn.com/2012/04/18/news/economy/swaps-rules/

[Drew Richards]

63. Try zen mode it will relax your body and mind...maybe do wonders

For your undocumented confrontational myopic attitude.

http://www.popcap.com/games/bejeweled3/online

[sabrina 1]

64. I don't think he's still in this thread!

[Drew Richards]

69. Hugs

[sabrina 1]

80. Aw, thank you!

[Better Believe It]

66. Glass-Steagall had NOTHING to do with the 2007-08 financial meltdown. The repeal of the act did!

[mmonk]

70. Sure it did. That and an unregulated deriatives market.

Here is a visual

[upi402]

76. "Government rescues banks" = They loot our tax dollars

Great visual. I think those that are still drunk on Kool Aid would just get the spins from it.

I love the media loop. Insanity breeds insanity.

Thanks for that!

:deep bow:

[mmonk]

77. Certainly.

Glad to help.

[jsmirman]

79. Incredible

I want this poster

[CreekDog]

71. you're on DU arguing against Glass Steagall? on DU?

you don't get it, do ya?

[Make7]

82. But what effect did it have on Dunning-Kruger? ( n/t )

[Octafish]

84. Hey, banned from Kos! That's exactly what Phil Gramm said.

Phil Gramm, the former Republican Senator from Texas who co-wrote the act that undid Glass-Steagall, has our DQotD:

“I’ve never seen any evidence to substantiate any claim that this current financial crisis had anything to do with Gramm-Leach-Bliley. In fact, you couldn’t have had the assisted takeovers you had. More institutions would have failed.”

Thanks to The Big Picture.

Amazing! That is exactly what you've been saying.

[Junkdrawer]

85. Now that JimRob cleared out the "Moderates"....

There's going to be a lot of Switch Hitters with extra time on their hands...

[Octafish]

86. LOL!

Did you see that thing Cali found?

[Junkdrawer]

87. "Maybe I'll stick videos on it. Maybe a few jokes. Recipes too."....

Freaking hilarious....