Posted on 11/30/2016 10:22:52 AM PST by SeekAndFind
It appears Elizabeth Warren does not think too highly of President-elect Donald Trump's nomination of Steven Mnuchin for Treasury secretary.
In a statement, the Massachusetts senator said Mnuchin was involved in the worst kind of lending practices that led to the financial crisis during his time as head of mortgage lending at Goldman Sachs.
"Steve Mnuchin is the Forrest Gump of the financial crisis — he managed to participate in all the worst practices on Wall Street," Warren said in a statement, according to Politico's Ben White.
"He spent two decades at Goldman Sachs helping the bank peddle the same kind of mortgage products that blew up the economy and sucked down billions in taxpayer bailout money before he moved on to run a bank that was infamous for aggressively foreclosing on families."
Warren's comparison of Mnuchin is to the 1994 Oscar-winning film Forrest Gump, in which Tom Hanks stumbles in and out of historical moments from the 1960s onwards as the eponymous Forrest.
Mnuchin worked at Goldman Sachs for 17 years and left the bank in 2002. During his time he oversaw the mortgage-lending department as it delved into such products as credit default swaps and collateralized debt obligations.
He later founded his own private-equity firm, Dune Capital Management, which in 2009 purchased the distressed-mortgage lender IndyMac, which was renamed OneWest. The firm and Mnuchin have been accused of unfair lending practices including discriminating against minority borrowers and aggressive foreclosures.
(Excerpt) Read more at businessinsider.com ...
The confirmation hearings will be fun to watch.
More like Andy Gump of the dems.
“We’re not supposed to point that out. And no “probably” about it.”
I was being gentle :)
That said, there’s blame enough to go around. Our elected officials and Goldman et al were both criminally negligent in bringing about the 2009 crisis.
That said, does anyone on the thread have any idea whether the $ amount of derivatives today are less, the same, more or a lot more than they were in 2009?
For someone who can’t take it when DJT calls her “Fauxchahontas” Warren, she certainly doesn’t mind calling others names. But then she’s a typical Democrat hypocrite.
Sure, they had a couple of good years during the tail end of the boom. When the downturn came, they didn't have the expertise in loss mitigation. On most of the bank closings I attended, the arrogance of these bank officers was appalling. They didn't get hurt, but their employees lost their jobs thanks to their poor decisions.
One practice my section stopped was the recapitalization of accrued interest on loan modifications. FDIC never considered "accrued interest" an asset, but the loan servicers bumped up their fees by including it in the new loan.
As much as I dislike Senator Warren, the Democrats and MSM are going to have a field day with Mr. Mnuchin. Will he be confirmed? Not if the nuclear option isn't employed.
Fully underway running her 2020 presidential campaign.
“I don’t know that they “leveraged” bad loans as much as sold them. That’s normally what you do with bad paper. It’s not evil.”
Well, the banks sold the loans to Fannie and Freddie—that was Fannie and Freddie culpability. They agreed to buy crappy loans and brokers and banks whee happy to write ‘em and sell ‘em to F&F. F&F then sold them to investment banks who tranched them up. From there, leverage proceeded to turn $X in bad mortgage tranches into 10 or 100 time $X in bad derivatives. The derivatives were the assets on which the whole financial system relied for security and cash flow.
When the only thing with value in the system (the relatively small volume of mortgages—small relative to the value of the derivatives secured by them) were revealed to be bad, the whole system started to collapse.
Hey Lizzie, I expect even Forest Gump knew that!
According to a Forbes article I found from 2013, quoting here..."derivative trading that now totals in notional amount more than $700 trillion. That is more than ten times the size of the entire world economy. Yet incredibly, we have little information about it or its implications for the financial strength of any of the big banks.
Source: Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable
Good point, but will no doubt fall on deaf ears: If the crisis was limited to the value of the mortgages, the banks could have absorbed the losses, or plain old go bust without hurting the overall economy. But since they had been collateralized into garbage financial instruments like derivatives, eseentially bets on bets on bets...they had to be bailed out. And will be again.
U forget the bundling of all the lousy loans, so they could be Securitised and then turned into derivatives, that were supported by Credit Default swaps, that were never accountedfor/margined properly.
So when it blew, it blew everything, especially AIG and if they went so did Goldman etc.....That was why TARP was needed, to bail out the crooks on Fall st....and the middle class is still paying.
Biggest hiest in history and no-one jailed.....
Can she prove it?
She is being hateful.
She is also being sexist. If he wasn’t a man, she wouldn’t be complaining.
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No, I didn't
"Banks were willing to go along with this due to what you referred to, the pooling of mortgages for seuritization, which took the credit risk from the bank and put it on the investor (in many instances foreign investors and borrowers who were not historically knowledgeable about US housing cycles). But this was tangential, not causative of the eventual crash. Mortgage pools were invented back in the late 70’s if memory serves as MBS Pools and was a legitimate investment if you understood the product."
Actually Mnunchin bought IndyMac AFTER it foreclosed on millions of homes and went belly up. He then sold it months later for a big profit. Meanwhile, Warren ACTUALLY bought foreclosed homes from hard-hit families
I thought Forrest Gump was a hero. Did Fakeahontas ever see the movie?
“When everybody is to blame, nobody gets punished. It’s a tidy system. According to a Forbes article I found from 2013, quoting here...”derivative trading that now totals in notional amount more than $700 trillion. That is more than ten times the size of the entire world economy.”
That’s a guess. It’s much worse today than in 2013.
This woman has revealed herself to be a real horse’s patoot. Lizzie Borden-Warren ain’t done too bad for herself riding that self-righteous broom behind all those evil bankers. She should be thanking them (with vig) for providing a foil.
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