Congress AIG tax payer money

Originally posted by whodey
And who helped unregulate these corporations bright boy? Was it not Congress?
Having said that, I suppose you are now going to say that it was all Republicans who were at fault?

Congress I mean the R and the D were at fault, but where is our
press, where are the guys that are suppose to be doing the fact
finding and publishing this stuff on the news? They so in bed with
the people in power we have lost our free press to the power brokers?
Kelly

Originally posted by generalissimo
On the bright side, at least the money didn't go to welfare, or loser homeowners.

Your remark goes against the US Constitution, which says that the government has the right to collect taxes for the welfare of its citizens. Corporate handouts are not welfare; they're less worthy than welfare, and the Constitution says as much.

Originally posted by Scriabin
Even today's revelation about the massive discrepancy in what AIG actually paid in bonuses fails to illuminate or help most people to get what needs to be done.

It might feel good to go after people rightly or wrongly perceived to be the beneficiaries of undeserved taxpayer funded bailout money as "retention" bonuses or whatever the company agreed to. I ...[text shortened]... this bonus crap provides the smoke for both regulators and congress to shift the blame.

What are your thoughts on how long it might take to fix this economic crisis, and to what extent the Obama administration are taking the right courses of action?

Originally posted by generalissimo
On the bright side, at least the money didn't go to welfare, or loser homeowners.

People talk about AIG being 'too big to fail'. What about the question of whether the American lower middle class is also 'too big to fail'?

Originally posted by karnachz
What are your thoughts on how long it might take to fix this economic crisis, and to what extent the Obama administration are taking the right courses of action?

Can you show us some specific things that Obama administration has
done to fix our economical crisis todate?
Kelly

Originally posted by KellyJay
Can you show us some specific things that Obama administration has
done to fix our economical crisis todate?

Well. He replaced Bush. That's one.

Originally posted by KellyJay
Can you show us some specific things that Obama administration has
done to fix our economical crisis todate?
Kelly

There's the stimulus package, for starters. It's a crucial first step but there are obviously other things that need to be done as well.

Originally posted by FMF
Well. He replaced Bush. That's one.

McCain would have done the same.

Originally posted by whodey
And who helped unregulate these corporations bright boy? Was it not Congress?
Having said that, I suppose you are now going to say that it was all Republicans who were at fault?

I would blame the last 4 Administrations -- I regard Clinton as being basically what used to be a moderate Republican. I think that's why he was so hated by so many Republicans, for stealing the center right out from under them and leaving them with only the right wingnuts and the evangelical lunatics as a base.

So, no, there is enough blame to go around. But the fundamental bias against regulation and the myth that free markets, left to voluntarily regulate themselves, are self-correcting ought to be a dead idea by now.

At the same time, to regulate or to deregulate is not a black/white, simple issue.

You do not want to over regulate. You do not want too many rules, nor rules that are incomprehensible or too complex. In fact, rules should be less and less prescriptive and move towards a preventive, performance based approach. Goals should be set rather than detailed, time intensive and overly costly, burdensome bureaucratic processes put in place.

I think Gingrich was right when he spoke at a seminar taught by Carville and said that if a private concern is too big to fail, then it is too big to manage and should be broken up until its parts can be managed.

If a company is too big to manage, it is too big to regulate, as well.

The Fed gov is already too big to manage or regulate itself -- Obama did not know the extent of the bonus situation, nor that his Treasury officials had made a legal call without vetting it upwards.

They decided to let the bonus contracts go forward, not because you cannot challlenge a contract as unconscionable,and not for a host of other reasons. They simply didn't want risk losing lawsuits brought by some who received multi-million bonuses as in that case the remedy in the contract would require treble damages -- so they ducked at the litigation risk.

That's government all over -- very risk averse.

lesson #1 -- do NOT let lawyers make high level policy and political calls.

Originally posted by generalissimo
McCain would have done the same.

Are you seriously saying, generalissimo, that if McCain had won the American election that he would have become the U.S. President?

Originally posted by uzless
Is anyone still buying securitized mortgages?

If not, who in their right mind will buy these things again? How could they possibly get AAA ratings again?

In other words, won't this not happen if mortgages are not securitized in the future?

it is the way they are bundled. Think of good loans as white spaghetti. if you package all these white loans in a box, you know pretty well what that box is worth. If, on the other hand, you put some squid ink pasta here and there, plus some spinach pasta and tomato pasta in there, since each flavor may have been originated under different credit conditions, different underwriting or no underwriting worth speaking of, of course a mixed box is impossible to value and no one should buy that kind of variegated crap anymore.

so I'd be surprised if no regs are soon proposed on how these bundles get put together and sold, how the underwriting works, and how the auditing should work.

Also, the rating agencies are going to have to be brought under regulation as well -- they share a lot of the blame for providing top ratings to unworthy product and firms and thus helped precipitate the crisis in confidence from which we continue to suffer.

there is plenty of blame to go around.

Originally posted by FMF
Are you seriously saying, generalissimo, that if McCain had won the American election that he would have become the U.S. President?

Hilarious!

Originally posted by KellyJay
Congress I mean the R and the D were at fault, but where is our
press, where are the guys that are suppose to be doing the fact
finding and publishing this stuff on the news? They so in bed with
the people in power we have lost our free press to the power brokers?
Kelly

Agreed. I think they are somewhat apprehensive because they know the outrage that exists right now. So to subside the rage they then tax the bonus that they recieve at a 90% rate. My, my, arn't they tough on them. Now please excuse me while I puke my dinner up.

Hopefully this will not subside the anger that is out there. Hopefully the American public will not be happy until heads roll in both Washington and in the corporate world.

Originally posted by Scriabin
there are more than 2,000 FBI investigations ongoing concerning corporate and mortgage fraud and more being opened every week, according to the head of the agency in testimony before Congress. That usually means a serious effort to hold some people accountable is gaining momentum.

a colleague said she had some friends who worked in Goldman Sachs and the so folks can get mad if they like.

I'd rather get even and stop this from happening again.

I would guesstimate that pretty much nothing will be done to punish those responsible for this fiasco. All that is being done right now like the taxing of the bonus of CEO's at AIG and FBI investigations are all done for show. Why, you may ask? It is because I believe they are all in bed together yet they have to be seen as doing something.

Originally posted by uzless
Is anyone still buying securitized mortgages?

If not, who in their right mind will buy these things again? How could they possibly get AAA ratings again?

In other words, won't this not happen if mortgages are not securitized in the future?

Concentration risk, liquidity risk, capital adequacy, allowances for loan and lease losses and fair value accounting are critical areas where risk management deficiencies contributed to the recent turmoil. Lessons learned on risk management are helping to determine the shape of an emerging plan for regulatory restructuring.

The events of the past several years have reinforced the need for a review of the framework for the regulatory oversight of financial services firms of all types. The importance of ensuring consistent regulation for similar products regardless of the issuer or originator has become evident, whether the product is a mortgage loan or a complex commercial instrument.

One of the goals of creating a new framework should be to ensure scrutiny of all bank products, services and activities. There should be consistent regulation and supervision of every entity that provides bank-like products, services and activities, whether or not it is an insured depository institution. The “shadow bank system,” where bank or bank-like products are offered by nonbanks, should be subject to the same rigorous standards as banks.

As one element of regulatory modernization, we should subject unevenly regulated or under-regulated mortgage brokers and independent mortgage companies to the same regulatory, supervisory and enforcement regime as insured institutions offering the same products.

Another important element in regulatory modernization is establishing a systemic risk regulator. A systemic risk regulator should have broad regulatory and monitoring authority of companies whose failure or activities could pose a risk to financial stability. Such a regulator should be able to access funds, which would present options to resolve problems at these institutions. The systemic risk regulator should have the ability and the responsibility for monitoring all data about markets and companies, including, but not limited to, companies involved in banking, securities and insurance.

Effective enterprise risk management, commensurate with the size and complexity of a financial institution’s operations, is paramount. The lessons learned from this economic cycle support this conclusion. A holistic approach to identifying, assessing and managing risk is relevant not only for financial institutions, but also for the regulatory environment. The interdependency of each risk area warrants a comprehensive solution from financial institutions and the agencies that regulate them.