Senator says regulators accountable on subprime (Dodd wants hearings)

[maddezmom]

Senator says regulators accountable on subprime By Kevin Drawbaugh and John Poirier
Wed Mar 14, 6:24 PM ET



WASHINGTON (Reuters) - U.S. Senate Banking Committee Chairman Christopher Dodd (news, bio, voting record) said on Wednesday regulators bear some responsibility for problems in the subprime mortgage sector and he plans to call them before the committee for questioning.

"That's what's made me angry here -- that the regulators apparently have not been doing as good a job as I think they should have been doing," Dodd told reporters after speaking at a U.S. Chamber of Commerce conference on market competitiveness.

"But we'll know the answer to that question as we bring them before the committee," said the Connecticut Democrat.

He said regulators should help explain "how we got to this point."

more:http://news.yahoo.com/s/nm/20070314/pl_nm/subprime_congress_dodd_dc

[ixion]

1. how we got here? well, I'm no regulator, but

I think that giving people who can't afford it quarter-million plus home loans is most probably why, IMO. :dunce:

[UpInArms]

4. MSN: Don't take mortgage advice from Alan Greenspan

http://moneycentral.msn.com/content/P73977.asp

Last week, Alan Greenspan was a study in contradiction. On Monday, he extolled the virtues of the levered-up homeowner to a credit union conference. The next day, in a speech to the Senate Banking Committee, he was singing a different tune altogether. Fannie Mae (FNM, news, msgs) and Freddie Mac (FRE, news, msgs), the giant providers of mortgage capital, he warned, "are expanding at a pace beyond that consistent with systemic safety," and that "preventative actions are required sooner, rather than later."

For a Federal Reserve chairman who has demonstrated that he couldn't identify reckless behavior if it ran him over, it was rather surprising to hear him chide Fannie and Freddie for their recklessness. (I should state, however, it’s an opinion I tend to share.)

His scolding might better be directed inward. What he advocated last Monday should send cold shivers down the spine of anyone so engaged. I already thought that what was going on in real estate was dangerous, but what he now cites as a good thing is not only dangerous, it will be disastrous -- guaranteed.

Before quoting from the above, I would just note that Greenspan's latest comments reminded me of a speech he gave on March 6, 2000, which I have dubbed "An Ode to Technology." In the speech, he waxed on about the wonders of technology and how it had brought us a new era and all that other stuff. Folks may not remember that date, but it was four days before the Nasdaq Composite (COMPX) hit its all-time high of 5,048.62. Despite the recovery over the past year ago, the composite is still down nearly 60% from the March 2000 peak.

<snip>

And, there are other examples prior to his latest "Ode to Real Estate." For instance, in 1984, he wrote a letter to Edwin Gray, then-chairman of the Federal Home Loan Bank Board, advising the regulator to exempt Charles Keating's Lincoln Savings & Loan, a Greenspan client, from harsh federal regulations about its investments. He told Gray he should "stop worrying so much" about such things as junk bonds, and that "deregulation (of the savings & loan industry) was working just as planned."

...more...

I say the committee starts with greenscum

[ClintonTyree]

2. That's funny....

what they mean to say is the taxpayers will be accountable when the whole thing comes crashing down around them. Guess who'll bail them out? Just like the S&L debacle, the taxpayers, not the "free market", will bear the brunt of their malfeasance. This "free market" thing works just great, doesn't it? :eyes: Depending upon which side of the market you're on, that is.

[stormymonday]

6. Conservative nanny state

http://www.conservativenannystate.org/

The free market is only for the poor.

The purpose of government is to protect the rich.

[HereSince1628]

3. Yeah, now that it hurts stock prices a couple percentage points

HORSE. OUT. OF. BARN.!!! ACT NOW over a handful of percentage point drop in the markets due to the failure of about 2 dozen land-sharking corporations. A collapse in a very minor part of the American economy.

Where were you when this started and the robot was screaming "DANGER! DANGER! Will Robinson! DO NOT SIGN THAT ADJUSTABLE RATE, NO PRINCIPAL LOAN CONTRACT for an over-priced and out-of-your-reach house!!!!" ?? NO FREAKIN WHERE is where you were. Let the stupid consumers bleed was the mantra.

The predatory lending schemes were just another way to prolong a buying spree that floated the builders and subprime mortgage industry (i.e. redistributed wealth from working families to builders, developers and Shylocking loan companies) across what should have been droughty years.

[Voltaire99]

5. Dodd is a lackey covering for his real constituency: big capital

The subprime disaster is about big fish exploiting very little fish. It's about people who couldn't afford houses being grotesquely set up for fantasy ownership: foreclosure and/or lifetime debt servitude. The institutions making the toxic loans knew better--indeed, they had the entire history of housing on which to draw, and that history said don't lend to bad credit risks without downpayments--but it didn't deter them. Every pyramid scheme depends on finding new fools.

And although Dems and Republicans alike smiled on this practice, Dodd is now hypocritically talking bailout. One glance at who keeps the senator on a leash will help you understand why he's keen to keep the housing bubble inflated.

CHRISTOPHER J. DODD: CAREER PROFILE (SINCE 1989)
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