Posted on 03/08/2010 3:45:29 AM PST by CutePuppy
New York Attorney General Andrew Cuomo is the "father of the subprime crisis" and his aggressive attacks on Wall Street could make him dangerous to the banking sector if he becomes the next governor of New York, well-known banking analyst Dick Bove told CNBC.
"One of the key reasons why (Fannie Mae and Freddie Mac are] bankrupt today, and why the government is spending hundreds of millions of dollars in supporting them, is because of the edicts pushed through by Mr. Cuomo," said Bove, of Rochdale Securities, in a live interview.
"It's also thought by many that the hundreds of thousands of people who are losing their homes, are [doing so] to a great degree because of the actions taken by Mr. Cuomo at HUD," Bove added.
Cuomo, who was secretary of Housing and Urban Development from 1997 to 2001, has been blamed in some quarters for helping to trigger the financial crisis by pushing Fannie and Freddie to buy more subprime mortgages to increase home ownership among the poor. Many of those homeowners eventually defaulted, and the mortgage-backed securities market later collapsed.
Cuomo also has gone after Wall Street bonuses and the banking sector in general, Bove said, which could prove detrimental to the state's economy if he's elected.
He cited the fact that although Bank of America's acquisition of Merrill Lynch provided many benefits to New York's economy, Cuomo continued attacking the big bank.
Moves like those will reduce the state's tax revenue, push high net worth people out of the New York, and hurt the state's core industry, Bove said.
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(Excerpt) Read more at cnbc.com ...
Go, Richard Bove! This guy has gravitas in the banking industry, and fiscal problems in NYS are directly linked to the banking crisis. If only NY Republicans had the stones to get this message out. Instead, the wimps are courting a Democrat to run as their gubernatorial candidate. This is unthinkable to most of the country, but this is also the state that brought us candidate Scuzzafloozy.
Pres. Jimmuh Carter is the father of the sub-prime mess with the Community Reinvestment Act of 1977 he signed into law.
Long, but insightful read about Cuomo’s part in the meltdown
They say "Success has many fathers but failure is an orphan". Let's make sure people learn and remember who are the "fathers" of this hugely expensive fiasco of yet another anti-market socialist experiment.
From Village Voice in early August 2008 - to use current vernacular, that's "unexpected".
This article is right on. It appears that someone at CNBC must have been asleep at the switch to publish this. Andrew Cuomo, comes from royalty (so-called) this guy has been given jobs all his life.He never had to submit a resume’ or stand on an unemployment line.
The Clinton Administration, however, put CRA on steroids and pressured Fannie and Freddie to buy bad loans, making the impact of CRA infinitely more toxic. And Cuomo was at HUD when all this happened.
Actually, Bove was interviewed on air when he made these statements. I was watching the show that day.
"His lack of financial acumen may prevent him from doing the right things even if he wants to," he said. "You just don't want someone with that type of lack of understanding of the financial system running a state as important as New York." But if Cuomo does decide to run and is elected, Bove said he will quickly realize that his decisions thus far have had a negative effect on the state, and he'll need to change them.
Oh, okay. Thanks for bit of info. I knew about ACORN pushing the Clinton administration to force banks to make even more bad loans but I wasn’t aware that Cuomo was part of this as HUD secretary.
Not only that, but Clinton made approval of any mergers or acquisitions made possible by the repeal of parts of Glass-Steagall dependent upon the CRA rating of the institutions involved.
Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions, or affiliates thereof, received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the Community Reinvestment Act (CRA).[3] This was an issue of hot contention, and the Clinton Administration stressed that it "would veto any legislation that would scale back minority-lending requirements." [4]
Obviously a quid pro quo arrangement which, in my layman's opinion, gave these institutions the feeling that any losses incurred by these bad loans would be backstopped by the taxpayers.
You’re right to point out that they corrupting the review process for mergers and acquisitions of banks. No longer would they consider whether or not it would be prudent. Now, they have to enforce CRA standards that make banks give bad loans. During the early 90s the banking regulators turned down mergers, IIRC, that would have been good for the banking system and some of the banks that could not be merged failed. A precursor to the total meltdown of 2007-2008.
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