A thread for Democrats Only
POSTED BY: THGRRI
UPDATED: Sunday, September 6, 2026 15:36
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Quote:Wrong you are, Signym. There were many things done badly. Doing any of them even half right would have prevented the Crash, but nobody did a damn thing right because doing what was risky was profitable. There is much more in the report, but one paragraph stands out on page xviii :
Originally posted by SIGNYM:
The thing that made all of this possible was Bill Clinton's Commodities Futures Moderinization Act, which deregulated CDSs.
Yet we do not accept the view that regulators lacked the power to protect the financial system. They had ample power in many arenas and they chose not to use it. To give just three examples: the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not. The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not. Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not. In case after case after case, regulators continued to rate the institutions they oversaw as safe and sound even in the face of mounting troubles, often downgrading them just before their collapse. And where regulators lacked authority, they could have sought it. Too often, they lacked the political will—in a political and ideological environment that constrained it—as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee.
www.govinfo.gov/content/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:Under Clinton, the US allowed lower capitalization rates, and in fact allowed banks to calculate their own rates to be competitive with BASEL II. "The IRB approach uses risk parameters determined by a bank’s internal systems in the calculation of the bank’s credit risk capital requirements. The AMA relies on a bank’s internal estimates of its operational risks to generate an operational risk capital requirement for the bank." That was a big OOPS. https://www.federalreserve.gov/generalinfo/basel2/FinalRule_BaselII/Fi
Originally posted by second:
To give just three examples:
- the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not.
nalRule_Draft.pdf "our results imply that much of the decline in CRE risk premiums ... was associated with weaker regulatory capital requirements." https://www.dallasfed.org/~/media/documents/research/papers/2015/wp150
4.pdf
Quote:Aside from the fact that many lenders / financial institutions proved so unstable they were ready to fall like dominoes, WHAT WAS IT SPECIFICALLY about Citigroup that, all on its own, caused the Great Recession?
- The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not.
Quote:Policy makers would have had to write new policies, for regulators to regulate to them. Regulators just can't look at something and say - I don't like it. But the policymakers under Clinton already wrote the policies. see above
- Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not.
And if democrats don't do anything different, how are they any better?
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Quote:Policy makers would have had to write new policies, for regulators to regulate to them. Regulators just can't look at something and say - I don't like it. But the policymakers under Clinton already wrote the policies. see above
Originally posted by 1KIKI:Quote:Under Clinton, the US allowed lower capitalization rates, and in fact allowed banks to calculate their own rates to be competitive with BASEL II. "The IRB approach uses risk parameters determined by a bank’s internal systems in the calculation of the bank’s credit risk capital requirements. The AMA relies on a bank’s internal estimates of its operational risks to generate an operational risk capital requirement for the bank." That was a big OOPS. https://www.federalreserve.gov/generalinfo/basel2/FinalRule_BaselII/Fi
Originally posted by second:
To give just three examples:
- the Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not.
nalRule_Draft.pdf "our results imply that much of the decline in CRE risk premiums ... was associated with weaker regulatory capital requirements." https://www.dallasfed.org/~/media/documents/research/papers/2015/wp150
4.pdfQuote:Aside from the fact that many lenders / financial institutions proved so unstable they were ready to fall like dominoes, WHAT WAS IT SPECIFICALLY about Citigroup that, all on its own, caused the Great Recession?
- The Federal Reserve Bank of New York and other regulators could have clamped down on Citigroup’s excesses in the run-up to the crisis. They did not.Quote:
- Policy makers and regulators could have stopped the runaway mortgage securitization train. They did not.
And if democrats don't do anything different, how are they any better?
It's very evident you have no intention to read and understand THE FINANCIAL CRISIS INQUIRY REPORT:
The prime example is the Federal Reserves pivotal failure to stem the flow of toxic mortgages, which it could have done by setting prudent mortgage-lending standards. The Federal Reserve was the one entity empowered to do so and it did not. The record of our examination is replete with evidence of other failures: financial institutions made, bought, and sold mortgage securities they never examined, did not care to examine, or knew to be defective.
page xvii www.govinfo.gov/content/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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It wasn't the mortgages.
It's that they were packaged and sold as assets instead of debts; and re-packaged and re-sold; and re-re-packaged and re-re-sold, and re-re-re-packaged and re-re-re-sold, and so on. And every time those packages got sold / bought the value got inflated roughly 10X till they'd ballooned to not even remotely resemble the original mortgages they were based on. Because the housing market and commercial markets were hot, and firms wanted to rake it in as fast as they could as long as the gravy-train was running.
Nobody ever said you had to be smart to be greedy.
If the Federal government had simply covered everybody's mortgages - just gave the money away directly to the borrowers - then the whole edifice built on top of them would have been secured, and it would have been far, far cheaper then securing those ridiculous monstrosities the investment banks created.
And if democrats don't do anything different, how are they any better?
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Quote:Wow, 1kiki! There was a much more direct and cheaper solution – do not allow government regulators to be controlled by the financial industry. It’s right there in the Financial Crisis Inquiry Commission Report:
Originally posted by 1KIKI:
It wasn't the mortgages.
It's that they were packaged and sold as assets instead of debts; and re-packaged and re-sold; and re-re-packaged and re-re-sold, and re-re-re-packaged and re-re-re-sold, and so on. And every time those packages got sold / bought the value got inflated roughly 10X till they'd ballooned to not even remotely resemble the original mortgages they were based on. Because the housing market and commercial markets were hot, and firms wanted to rake it in as fast as they could as long as the gravy-train was running.
Nobody ever said you had to be smart to be greedy.
If the Federal government had simply covered everybody's mortgages - just gave the money away directly to the borrowers - then the whole edifice built on top of them would have been secured, and it would have been far, far cheaper then securing those ridiculous monstrosities the investment banks created.
But as the report will show, the financial industry itself played a key role in weakening regulatory constraints on institutions, markets, and products. It did not surprise the Commission that an industry of such wealth and power would exert pressure on policy makers and regulators. From 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $1 billion in campaign contributions. What troubled us was the extent to which the nation was deprived of the necessary strength and independence of the oversight necessary to safeguard financial stability.
page xviii www.govinfo.gov/content/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf
Rather than to just admit that the government had been either purchased or bribed to not do its job, the Report says something much more bland: “Too often, regulators lacked the political will—in a political and ideological environment that constrained it—as well as the fortitude to critically challenge the institutions and the entire system they were entrusted to oversee.”
Were the regulators incapable of doing their job because of their political ideology? Or were they simply bribed? We will never know because the regulators were not forthcoming with explanations for their peculiar behavior.
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:By 'government regulators', do you mean Clinton? It’s right there in the Financial Crisis Inquiry Commission Report!
Originally posted by SECOND:
There was a much more direct and cheaper solution – do not allow government regulators to be controlled by the financial industry. It’s right there in the Financial Crisis Inquiry Commission Report:
Quote:
These policies were put in place and promoted by several administrations and Congresses—indeed, both Presidents Bill Clinton and George W. Bush set aggressive goals to increase home-ownership.
In Washington, four intermingled issues came into play that made it difficult to acknowledge the looming threats. First, efforts to boost homeownership had broad political support—from Presidents Bill Clinton and George W. Bush and successive
Congresses—even though in reality the homeownership rate had peaked in the spring
of ????
He finally took his warnings to the highest level he could reach—Robert Rubin,
the chairman of the Executive Committee of the Board of Directors and a former
U.S. treasury secretary in the Clinton administration, and three other bank officials.
He sent Rubin and the others a memo with the words “URGENT—READ IMMEDIATELY” in the subject line.
In ????, President Bill Clinton announced an initiative to boost homeownership
from ??.?? to ??.?? of families by ????, and one component raised the affordable housing goals at the GSEs. Between ???? and ????, almost ?.? million households entered the ranks of homeowners, nearly twice as many as in the previous two years.
“But we have to do a lot better,” Clinton said.
In December ????, in response, Congress passed and President Clinton signed the Commodity Futures Modernization Act of ???? (CFMA), which in essence deregulated the OTC derivatives market and eliminated oversight by both the CFTC and the SEC.
In November ????, Congress passed and President Clinton signed the Gramm-Leach-Bliley Act (GLBA), which lifted most of the remaining Glass-Steagall-era restrictions.
In ????, President Bill Clinton asked regulators to improve banks’ CRA performance * while responding to industry complaints that the regulatory review process for compliance was too burdensome and too subjective. (* The Community Reinvestment Act (CRA) is a federal law enacted in 1977 with the intent of encouraging depository institutions to help meet the credit needs of low- and moderate-income neighborhoods. The CRA requires federal regulators to assess how well each bank or thrift fulfills its obligations to these communities.)
Initiated by Congress in 1992 and pressed by HUD in both the Clinton and George W. Bush Administrations, the U.S. government’s housing policy sought to increase home ownership in the United States through an intensive effort to reduce mortgage underwriting standards.
FHA was tasked with insuring loans to low-income borrowers that would not be made unless insured; banks and S&Ls were required by CRA to show that they were also making loans to the same group of borrowers; mortgage bankers who signed up for the HUD Best Practices Initiative and the Clinton administration’s National Homeownership Strategy were required to make the same kind of loans.
followed by a whole lot more "Clinton" results.
And if democrats don't do anything different, how are they any better?
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SECOND, your attempt to blame 2008 on the GOP and deflect crticism from Bill Clinton is wrong, wrong, wrong, and has been demonstrated to be wrong three times already, using the very report that YOU cited. So give up, already; you're just burying yourself deeper.
Nobody is saying that the only President at fault was Clinton ... Presidents of BOTH parties kept rolling that ball forward, INCLUDING Bill Clinton. And btw, Clinton didn't just favor big banks, he also favored transnationals' move out of the USA by forwarding China's accession into the WTO and pushing for - and getting - NAFTA. And tech companies by pushing for - and getting - DMCA. Also "ending welfare as we know it". Bill Clinton was NOT a friend of us regular Americans, he was a smooth-talking bought-and-paid-for serial rapist.
Let's just say that neither party has really had our interests at heart for decades, and both parties have pretty much sold us downriver, including Obama.
-----------
Pity would be no more,
If we did not MAKE men poor - William Blake
"The messy American environment, where most people don't agree, is perfect for people like me. I CAN DO AS I PLEASE." - SECOND
America is an oligarchy http://www.fireflyfans.net/mthread.aspx?tid=57876 .
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Quote:You are misunderstanding how the Republicans crashed the economy in 2008. I’m going to give you a very real analogue because you, and the GOP, would insist the GOP did not crash economy, but rather Clinton is to blame because he signed a law ten years earlier. Here we go: I was a control systems engineer for Bechtel. A client would accidentally destroy a petrochemical plant that had been running for decades and they’d come to us to rebuild so it would not happen again. The plant that exploded was not a bad design, although old-fashion, but only if the people operating it on the day it exploded knew what they were doing. And the operators must pay attention and not panic and do nothing. In the case of the Crash of 2008, the regulators kept their hands off because everybody was making so much money. Why stop when the system was running profitably?
Originally posted by SIGNYM:
SECOND, your attempt to blame 2008 on the GOP and deflect crticism from Bill Clinton is wrong, wrong, wrong, and has been demonstrated to be wrong three times already, using the very report that YOU cited. So give up, already; you're just burying yourself deeper.
In a petrochemical plant disaster there are usually several things that went wrong and if any of them had gone right there would not have been an explosion. The spare cooling water pump needed to be started, but was not because it was manually operated, not automatic. The furnace needed to be shutdown to reduce the heat, but it too was manually operated. Some human must press the shutdown button. The furnace won’t press the button for the human. The high pressure needed to be vented to the flare, but it was not. If the operators had done at least one of these three things right, there would not have been an explosion.
Similarly, the GOP policy makers and regulators could have stopped the runaway mortgage securitization train years before it crashed. But they did not. The Securities and Exchange Commission could have required more capital and halted risky practices at the big investment banks. It did not.
www.govinfo.gov/content/pkg/GPO-FCIC/pdf/GPO-FCIC.pdf
It is completely nuts to think Clinton should have stopped them in 2000 when it was the GOP that was operating the financial system more and more dangerously for the next seven years. The system worked fine, but only so long as the regulators made correct decisions. If they made no decisions, it would explode eventually. And it did in 2008.
The Joss Whedon script for Serenity, where Wash lives, is Serenity-190pages.pdf at www.mediafire.com/folder/1uwh75oa407q8/Firefly
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Quote:
Originally posted by SIGNYM:
Presidents of BOTH parties kept rolling that ball forward, INCLUDING Bill Clinton.
Quote:And constantly LYING about what people post is why you're a used asswipe, and nobody credits a fucking thing you post.
Originally posted by SLOPPY SECONDS:
... you, and the GOP, would insist the GOP did not crash economy, but rather Clinton is to blame because he signed a law ten years earlier.
And if democrats don't do anything different, how are they any better?
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So, a LONG time ago, back in 2007, I read an interesting article whose subject was 'the bubble economy'. https://prospect.org/article/bubble-economy and how fragile it is to popping at any time.
I just want to point out that I think we're in a stock market bubble. Before that was a bank / investment bubble. Before that was a housing bubble. And before that was the dot.com bubble. And before that was the S&L bubble.
Without real overall growth, government needs these bubbles to create good economic averages. Without the bubbles averaged in, the actual dismal state of the real economy would be exposed.
EVERYONE in government since the 70's wants to keep those bubbles frothing!
And if democrats don't do anything different, how are they any better?
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