Posted on 07/19/2013 4:35:30 PM PDT by lbryce
Earlier this week, Democratic Senator Elizabeth Warren (D-MA) went on CNBC last Friday to debate the Glass-Steagall banking regulations that were adopted in 1933, and her proposal to update and strengthen the law in a way that would likely force the big banks to spin off some of their business and stop being so damn big.
As you can imagine, CNBC is no fan of Glass Steagall, regulating banks, or Elizabeth Warren.
During her appearance on CNBC, Warren basically kicked ass, the video went viral, with over 700,000 views in a matter of days, so CNBC pulled it.
Here’s what sits in place of the video now:
Blank Screen
And where did CNBC pull the video from? They filed a complaint with YouTube and had the video yanked from the Senator’s official YouTube account - but only after it had accumulated over 700,000 views in a matter of days.
Apparently, the buzz over Warren’s appearance got so great, that CNBC anchor Jim Cramer had to try to shoot it down on Twitter (h/t to HuffPo for that point):
There is some weird strain of thought that CNBC got beaten by Senator Warren. I like the senator but she had NO impact. Sorry..
— Jim Cramer (@jimcramer) July 17, 2013
Yeah, Elizabeth Warren had so little impact that CNBC filed a complaint against the YouTube account of a United States Senator in order to get the no-impact video pulled.
(Excerpt) Read more at americablog.com ...
8-\
Yepper, remember IndyMac: http://www.canadafreepress.com/index.php/article/8713
My take on the mortgage backed concept is that it was a demand driven product. By that I mean that firms bought and sold them because they were profitable (no mention of their danger).
I think investment banks are better run as partnerships, because the partners take the time to determine how their capital is being risked. As a partner, I would have wanted to understand every detail of mortgage backed securities before I put my wealth at risk.
When investment bankers capital is not at risk (or an investment bank gets its equity elsewhere), the bar is lowered significantly.
Furthermore, the manner of compensation contributed to the problem. If you as a partner pay me as a junior investment banker on annual performance, I can collect a massive bonus and don't really worry about next year and the year thereafter. Solution, partners either must more carefully analyze products and/or compensation must not be so immediate.
The problems of matching risk and reward were fundamental to the collapse of Wall St. This stuff is way over the heads of managers whose capital is not at risk. A man or woman whose entire family wealth is at risk in said investment bank is going to be much more careful about making sure the products sold are solid investments for their customers...and, in the long run, for themselves.
Me too. I had 25 years as a regulator and almost 9 as a banker. For the most part, she is a leftist hack and sickening to behold. But she is right on here.
You bet. Their leverage got to be ridiculous. They still didn't cause the crisis. Glass-Steagall still wouldn't have stopped bad mortgages.
I can't believe anyone would agree with anything this POS has to say.
I think I explained how the mortgage crisis occurred. It was not Glass-Steagall but the capital formation (and oversight) of investment banks.
The investment banks weren’t writing the bad mortgages.
LOL something like that.
Thank you for that detailed response. I learn a great deal from freepers like you.
The banks were patsies.
And don't forget the Community Reinvestment Act in this process.
Totally agree. There should be no national banks, only state banks.
So one instance of socialism requires another. It’s an old story.
Peter Schiff has made an argument against FDIC insurance of checking accounts. He says that absent the FDIC guarantees, we would shop around for safer banks. One might inquire about a banks investment policies, before setting up an account. Also, rating agencies would rate banks. The higher rated banks would probably advertise their ratings. The local news would be glad to report on bank investment risk, for those who tune in.
As it is, most people don’t care what the banks do with their money.
Bingo!
Banks went over the cliff because it was federal policy that banks lower lending standards so that more people could get mortgages and homes.
Sorry, the Executive branch executes/enforces the Laws (not like it’s being done, now, anyhow), but the gov’t was instituted to protect the Rights of the Citizenry (again. not very good about that either).
We already know what the gov’t does when it pokes its hand into areas where it, technically, has no authority. This is only one example of many.
Warren, in this instance, is the broken clock. If taxpayer are on the hook....
But that ain’t happening, so we should at least limit the scope of the guarantees we make.
No mention of the CRA nor the Bush Administration’s effort to rein in Barney Frank et al.
All a load of crap except for the point that Senator Warren did indeed “look good”.
I don’t think our problems stem from Glass-Steagall at all. You are barking up the wrong tree, in my opinion.
I won’t rehash the effects of the Community Re-Investment Act, increased Fannie Mae activity, and stimulative Federal Reserve policy. These have all been discussed at length on FreeRepublic. I think they (first two especially) are more proximate causes for the housing bubble, subsequent defaults, banking distress, etc.
All those are terrible and the more important to fix, but the feds (Fed and feds) rushed in to the tune of trillions once it started to ravel—because the individual institutions involved were too large and tied to guaranteed deposits.
Thanks for the discussion. You are persuasive. That does not mean that I am persuaded.
This kind of brings up the topic of George W. Bush. He described himself as a “compassionate conservative.” On education, GW, tried the “No Child Left Behind” Act. Bless his heart, he tried to make socialism work with an added dose of socialism. The latest shoe to drop on that evolving story is race-based standards.
So, on to the topic at hand. The government pushes banks to make risky loans. It all blows up and the government (taxpayer) rushes in to save the banks. Cheney and others pressure (bamboozle, bushwhack) GW telling him that he must act NOW or he will be responsible for a new Great Depression. Bush then announced that the Government must act to save capitalism; the banks are too big to fail.
Bush thought it necessary that he act. William Pitt said, “Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.”
Was Bush right to act? If so, why? I’m not convinced that the banks were too big to fail. His stimulus was a mistake and just paved the way for more rounds of stimulus under Obama. I think the only valid reason for the government to save the banks was the moral reason that it was government mistakes, not bank mistakes, that messed things up. The problem was not de-regulation; the problem was the regulations that pushed banks to provide more mortgages than banks wanted to provide.
I’ve become largely immune to arguments that we need more socialism to solve the mistakes of socialism. Let’s not have more regulation to “solve” the problems created by government regulation. Let’s deregulate instead.
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