Some Housewife Perspective

Yet again, I must interrupt my usual programming to weigh in on the national mud slinging fest. Here are my thoughts:

On the financial mess:

1. Acorn is not the root of all evil. It is an organization with a mission to try and help poor Americans afford their own home. It is a noble and worthy mission. Is there corruption within Acorn? Certainly. There are human beings running it, and human beings come in all varieties - including greedy and incompetent. Is Acorn responsible for the financial mess? I am sure it contributed to it, but by no measure could it have brought about the financial meltdown on its own.
   
   
2. The Barney Franks of Washington, who pushed for more lenient loan underwriting standards had a responsibility to monitor the effects of doing so. They failed miserably. That Barney Frank even shows his face in Washington after what has happened to Fannie and Freddie is a testament to our time - a time in which accountability, responsibility and shame have been completely tossed aside and replaced by a 1960s hippie free-for-all mentality. Unfortunately for us, there are not any members of the Great Generation left to clean up the messes made by their Boomer children.
   
   
   
   Watch Barney Frank tell us how financially sound fannie and freddie are. Hint: If Republicans are pushing to regulate something, it might be something we want to consider. (Other idiot Democrats mentioned that we need to get rid of: Charles Schumer and Nancy Pelosi. )
   
   
3. Glass/Steagal was put there for a reason. The Gramm-Leach-Bliley Act got rid of a few important protections, namely those separating banking, securities firms and insurance. This is another piece of the puzzle. A little history:
   The guy in the picture is Carter Glass - who was both a smart guy and a Democrat. Sounds funny in the same sentence, doesn't it? He and Mr. Steagal to put together some laws that managed to keep us out of hot water for 75 years. Having just lived through a similar financial crisis himself, he probably knew a thing or two about the causes - Gramm, Leach and Biley, on the other hand, were not so astute.
   
   (Not that there wasn't opposition at the time:)
   
   

   Washington — The secret drive of Big Business to kill the Securities Act is getting more intense.
   
   What Wall Street wants to do is hamstring the Act by eliminating the civil liability clauses. As now written, the Act makes corporation directors, executives even accountants liable for damages if through misleading the public, any investor loses money.
   
   So, potent is this propaganda that an Administration committee has been set up very quietly to change tho Securities Act and also to modify the bank deposit guarantees in the Glass Steagal Bill.
   
   Members of this committee are: John Dickinson, Assistant Secretary of Commerce, who once represented ""Sullivan and Cromwell"", attorneys for various Wall Street organizations. William Stanley, assistant attorney general and Jim Farley's man at the Justice Department. A. A. Berle, Jr., member of the ??? Trust, and expert advisor on banking and railroad questions. Arthur H. Dean, member of the firm of Sullivan and Cromwell, as an advisory member.
   
   Their job is to kill the Securities Act as painlessly and quietly as possible. (1933)
   

4. The Rating Agencies failed so miserably it defies explanation - Moody's, Standard & Poor, etc. the companies whose sole raison d'être is to evaluate the financial condition of other companies were apparently staffed entirely with chimpanzees. Chimpanzees which had only managed to master the first letter of the alphabet. We should do a poll of all the zoos and circuses in the country to figure out from where they have escaped and return them as quickly as possible before they try their paw at other things - like California's budget or the banking bailout.
   
   Without the AAA ratings handed out by the chimps, insurance companies like AIG would not have a) sold so much insurance guaranteeing a pyramid scheme or b) stocked their reserves with the same pyramid scheme securities.
   
   
5. But seriously guys, did you really think securities made up of sub-prime mortgages was a safe bet? Really? What? No, I don't have any bananas!
   
   
6. Mortgage brokers, loan officers and real estate agents: FYI - I saved a ton of those "Bad credit OK, Refinance NOW, Here, Have $300,000 Today!" ads I got in the mail. I am in the process of scanning them to post for all eternity. Real estate agents - how many of you nudged your prospective clients to fudge their income upward? I personally came across more than one who did - as well as loan officers who pushed "Stated Income" loans - (which are perfectly fine if the borrower has a brain) - with the encouragement to "State Up".
   
   
7. The borrowing/foreclosed upon public - you know who you are and you know what you did.
   

So quit acting like there is only one guilty party and quit pretending that if Bush and Obama didn't inject the money into the economy that they did and still are doing - that we wouldn't all be in a far bigger mess than we are.

THEY HAD NO CHOICE IF THEY WANTED TO AVOID COMPLETE AND UTTER DISASTER.

On the same note, please remember Prezzy Baby - all the money you are spending will have to be paid back, and there will be consequences, such as inflation and dollar devaluation, so take it easy!

PS - Anybody who says "Capitalism is dead" is a dirty, pinko, commie and should be quickly dispatched off to North Korea to gain some first-hand experience of how much fun it is to live under communism. I would have said "The Soviet Union" - but OOPS! Doesn't exist anymore!

Next up: Health Care
but first I am going to watch some soap operas or bake a cake or something. I find this all very annoying to think about.

RH

Then and Now - The Great Depression, Act II

"Those who cannot remember the past, are condemned to repeat it"

Meaning: We didn't learn our lesson yet so that lesson will now be repeated.

"If expansion of the brokers loan account gets to the place where it is dangerous and borders on unwarranted speculation, the American banking fraternity itself would correct the situation." Former Governor Roy A. Young of the federal reserve system, quoted in 1928. He said he could recommend no legislation to that end.

Meaning: What me worry? The banks don't need to be regulated! They will self-regulate and everything will be hunky-dory!

Event: 1929 Stock market crash, the Great Depression, Misery, Poverty and a distinct absence of Hunky Doriness.

Event: Glass-Steagall Act Of 1933 - set up a regulatory firewall between commercial and investment bank activities, both of which were curbed and controlled. See Source

Meaning: By 1933, people were not so happy with the results of banks regulating themselves so they decided to help out - (Hunger tends to make folks grumpy)

... Hunky Doriness ...

Event: Gramm-Leach-Bliley Act 1999 - to the delight of many in the banking industry (not everyone, however, was happy), in November of 1999 Congress repealed the Glass-Steagall Act with the establishment of the Gramm-Leach-Bliley Act, which eliminated the Glass-Steagall Act restrictions against affiliations between commercial and investment banks. Furthermore, the Gramm-Leach-Bliley Act allows banking institutions to provide a broader range of services, including underwriting and other dealing activities.


Meaning: Representative Jim Leach (R-Iowa) and Senator Phil Gramm (R-Tex.) owe us some money.

I would also like to see money paid back from the following people:

1. Daniel Mudd - Fannie Mae, the biggest U.S. mortgage finance company, said that it paid its chief executive, Daniel Mudd, salary, bonuses and stock valued at $14.25 million in 2006, an increase of 25 percent.
2. Richard F. Syron - 5-Year Compensation Total $29.06 mil - Richard F Syron has been CEO of Freddie Mac ( FRE) for 4 years. Mr. Syron has been with the company for 4 years. The 64 year old executive ranks 34 within Diversified Financials
   
3. Kerry Killinger - Washington Mutual lost $3.3 billion in the second quarter, on top of more than $1 billion of losses in the first quarter, as it scrambled to raise reserves for loan losses. Killinger received no 2007 bonus amid huge losses and a 70% stock price drop. That cut his pay to a mere $4.9 million. His board decided in March to exclude the financial damage from WaMu's subprime lending from the operating profit figure used to calculate his bonus. Directors backed off in April after shareholders forced former finance committee head Mary Pugh to resign.
   
4. TBD
   

If you care that we taxpayers are being asked to foot the bill for this bailout, then join me in getting our money back from the people who stole it. And yes I mean stole it. Since when does one deserve bonus pay for driving a company into the ground? I want that money back - These people had no business taking on a job that they were so obviously not qualified for. I want consequences!!!

RH

PS Consider this a lesson in Home Economics. - My list will continue to grow and if you know of somebody who should be on this list, by all means nominate him/her!