Comments on: The Financial Crisis Inquiry Commission http://keithhennessey.com/2009/07/16/fcic/ Your guide to American economic policy Wed, 17 Mar 2010 19:57:44 -0400 http://wordpress.org/?v=abc hourly 1 By: Stephen http://keithhennessey.com/2009/07/16/fcic/comment-page-3/#comment-14685 Stephen Thu, 21 Jan 2010 19:24:59 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14685 Derivitives were an amplifier, not the cause. Betting on a 3-legged horse losing is not dangerous, but a 3-legged horse shouldn't be in the race at all. THE root cause of this crisis is the same as the S&L crisis. Massive, unbridled fraud in the mortgage industry. Bad products were created and sold. Wall St. didn't write bad mortgages, the mortgage industry did, and all the intellectual pontification from the lofty clouds of the erudites only exudes ignorance and refusal to see the forest for the trees. Wall St. buys and sells. Don't blame the forest for the forest fire. <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14685','Stephen'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14685','Stephen','Derivitives were an amplifier, not the cause. Betting on a 3-legged horse losing is not dangerous, but a 3-legged horse shouldn't be in the race at all. \n \nTHE root cause of this crisis is the same as the S&L crisis. Massive, unbridled fraud in the mortgage industry. Bad products were created and sold. Wall St. didn't write bad mortgages, the mortgage industry did, and all the intellectual pontification from the lofty clouds of the erudites only exudes ignorance and refusal to see the forest for the trees. Wall St. buys and sells. Don't blame the forest for the forest fire. '); return false;">Quote</a></div> Derivitives were an amplifier, not the cause. Betting on a 3-legged horse losing is not dangerous, but a 3-legged horse shouldn't be in the race at all.

THE root cause of this crisis is the same as the S&L crisis. Massive, unbridled fraud in the mortgage industry. Bad products were created and sold. Wall St. didn't write bad mortgages, the mortgage industry did, and all the intellectual pontification from the lofty clouds of the erudites only exudes ignorance and refusal to see the forest for the trees. Wall St. buys and sells. Don't blame the forest for the forest fire.

Reply – Quote
]]> By: Minchoff Gomorkovsky http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14676 Minchoff Gomorkovsky Thu, 21 Jan 2010 15:29:02 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14676 I hope that what I'm saying here is not new information to you, but it seems obvious to me that the explanation for this crisis lies in the existence of the complex financial instruments that were constructed around the sub-prime / Alt-A mortgages. The simple truth is that, without these derivative instruments (CDO's, CDS's, Synthetic CDO's), the entire sub-prime / Alt-A mortgage default would have been a $300 Billion problem - less than the $500 Billion S&L problem that was resolved thru the RTC during the 1980's. The existence of these derivative instruments has turned he current problem into a multi-Trillion dollar problem and extended that problem globally. If you haven't read Les Leopold's book "The Looting of America", I'd suggest you read it as it very explains in an understandable and logical way the roots of the crisis. Granted - he leans left with some labor related issues - but the core arguments seem solid to me. From my perspective we need to fully review all of our derivative financial instruments for their value to society against their risk and potential abuse. Thanks for offering this venue to provide input ! minchoff <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14676','Minchoff Gomorkovsky'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14676','Minchoff Gomorkovsky','I hope that what I'm saying here is not new information to you, but it seems obvious to me that the explanation for this crisis lies in the existence of the complex financial instruments that were constructed around the sub-prime \/ Alt-A mortgages. The simple truth is that, without these derivative instruments (CDO's, CDS's, Synthetic CDO's), the entire sub-prime \/ Alt-A mortgage default would have been a $300 Billion problem - less than the $500 Billion S&L problem that was resolved thru the RTC during the 1980's. The existence of these derivative instruments has turned he current problem into a multi-Trillion dollar problem and extended that problem globally. If you haven't read Les Leopold's book "The Looting of America", I'd suggest you read it as it very explains in an understandable and logical way the roots of the crisis. Granted - he leans left with some labor related issues - but the core arguments seem solid to me. From my perspective we need to fully review all of our derivative financial instruments for their value to society against their risk and potential abuse. Thanks for offering this venue to provide input ! minchoff '); return false;">Quote</a></div> I hope that what I'm saying here is not new information to you, but it seems obvious to me that the explanation for this crisis lies in the existence of the complex financial instruments that were constructed around the sub-prime / Alt-A mortgages. The simple truth is that, without these derivative instruments (CDO's, CDS's, Synthetic CDO's), the entire sub-prime / Alt-A mortgage default would have been a $300 Billion problem – less than the $500 Billion S&L problem that was resolved thru the RTC during the 1980's. The existence of these derivative instruments has turned he current problem into a multi-Trillion dollar problem and extended that problem globally. If you haven't read Les Leopold's book "The Looting of America", I'd suggest you read it as it very explains in an understandable and logical way the roots of the crisis. Granted – he leans left with some labor related issues – but the core arguments seem solid to me. From my perspective we need to fully review all of our derivative financial instruments for their value to society against their risk and potential abuse. Thanks for offering this venue to provide input ! minchoff
Reply – Quote
]]> By: Rick Lewis http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14541 Rick Lewis Fri, 15 Jan 2010 19:14:22 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14541 I would invite all concerned to read the following: <a href="http://www.wired.com/techbiz/it/magazine/17-03/wp_quant?currentPage=all" target="_blank">http://www.wired.com/techbiz/it/magazine/17-03/wp...</a> <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14541','Rick Lewis'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14541','Rick Lewis','I would invite all concerned to read the following: \n \n<a href=\"http:\/\/www.wired.com\/techbiz\/it\/magazine\/17-03\/wp_quant?currentPage=all\" target=\"_blank\">http:\/\/www.wired.com\/techbiz\/it\/magazine\/17-03\/wp...<\/a> \n \n '); return false;">Quote</a></div> I would invite all concerned to read the following:

http://www.wired.com/techbiz/it/magazine/17-03/wp...

Reply – Quote
]]> By: D Smith http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14514 D Smith Wed, 13 Jan 2010 21:23:52 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14514 Put the Glass-Steagall Act back on the books and break up the remaing, evne larger "to big to fail" institutions <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14514','D Smith'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14514','D Smith','Put the Glass-Steagall Act back on the books and break up the remaing, evne larger "to big to fail" institutions '); return false;">Quote</a></div> Put the Glass-Steagall Act back on the books and break up the remaing, evne larger "to big to fail" institutions
Reply – Quote
]]> By: Stephen http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14512 Stephen Wed, 13 Jan 2010 20:28:52 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14512 Angelides is asking the right questions of the Wall St. execs. The situation is quite simple, because we've been through this before but it was contained within the U.S.. (S&L crisis). Bad products (mortgages) were created and sold throughout the world. Those mortgages were fraudulently created by an industry (mortgage industry) which has no boundaries, legal or ethical. The banks actively soliicited mortgage loans in any shape or form (I was there, I saw it) and the FBI warned Bush in 2002 that mortgage fraud was epidemic. Fraud is illegal and requires no regulation. It's common law and real estate "Professionals" are going to prison in droves for inflating property values, falsifying incomes and employment and worse. Wall St. amplified the problem exponentially by buying these mortgages in bundles and selling them to investors as AAA rated products. The only question remains is: Was Wall St. an innocent victim, or active participant? And that question is answered by the practice Wall St. employed of betting AGAINST the very products it was purveying. They knew the mortgages were bogus.<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14512','Stephen'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14512','Stephen','Angelides is asking the right questions of the Wall St. execs.\r\n\r\nThe situation is quite simple, because we\'ve been through this before but it was contained within the U.S.. (S&L crisis).\r\n\r\nBad products (mortgages) were created and sold throughout the world. Those mortgages were fraudulently created by an industry (mortgage industry) which has no boundaries, legal or ethical. The banks actively soliicited mortgage loans in any shape or form (I was there, I saw it) and the FBI warned Bush in 2002 that mortgage fraud was epidemic.\r\n\r\nFraud is illegal and requires no regulation. It\'s common law and real estate \"Professionals\" are going to prison in droves for inflating property values, falsifying incomes and employment and worse.\r\n\r\nWall St. amplified the problem exponentially by buying these mortgages in bundles and selling them to investors as AAA rated products.\r\n\r\nThe only question remains is: Was Wall St. an innocent victim, or active participant? And that question is answered by the practice Wall St. employed of betting AGAINST the very products it was purveying. They knew the mortgages were bogus.'); return false;">Quote</a></div> Angelides is asking the right questions of the Wall St. execs.

The situation is quite simple, because we’ve been through this before but it was contained within the U.S.. (S&L crisis).

Bad products (mortgages) were created and sold throughout the world. Those mortgages were fraudulently created by an industry (mortgage industry) which has no boundaries, legal or ethical. The banks actively soliicited mortgage loans in any shape or form (I was there, I saw it) and the FBI warned Bush in 2002 that mortgage fraud was epidemic.

Fraud is illegal and requires no regulation. It’s common law and real estate “Professionals” are going to prison in droves for inflating property values, falsifying incomes and employment and worse.

Wall St. amplified the problem exponentially by buying these mortgages in bundles and selling them to investors as AAA rated products.

The only question remains is: Was Wall St. an innocent victim, or active participant? And that question is answered by the practice Wall St. employed of betting AGAINST the very products it was purveying. They knew the mortgages were bogus.

Reply – Quote
]]> By: Steve M http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14510 Steve M Wed, 13 Jan 2010 18:16:52 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14510 I am delighted to see Mr. Hennessey's appointment to the Commission, and I think it is critical that we identify and deal with the causes of the financial crisis. While it is true that the lack of derivatives regulation was a cause, the fundamental and underlying cause was the government (Democrat Party inspired and controlled) mandated and promoted mortgage and real estate bubble. In the 1990's even the New York Times identified the problem and said that government mandated and promoted sub prime mortgages would cause a financial crisis. There is absolutely no question that the government, particularly in the form of Democrat politicians and their cronies at places like Fannie Mae and Freddie Mac, were the root cause of this near Depression. It sickens me to see them now blaming Wall Street for the problem and taking no responsibility for it themselves. Maybe they did not intend to destroy our economy, but they did it, and they need to be publicly indicted for it,, and take responsibility for it, so they won't do it again. <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14510','Steve M'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14510','Steve M','I am delighted to see Mr. Hennessey's appointment to the Commission, and I think it is critical that we identify and deal with the causes of the financial crisis. While it is true that the lack of derivatives regulation was a cause, the fundamental and underlying cause was the government (Democrat Party inspired and controlled) mandated and promoted mortgage and real estate bubble. In the 1990's even the New York Times identified the problem and said that government mandated and promoted sub prime mortgages would cause a financial crisis. There is absolutely no question that the government, particularly in the form of Democrat politicians and their cronies at places like Fannie Mae and Freddie Mac, were the root cause of this near Depression. It sickens me to see them now blaming Wall Street for the problem and taking no responsibility for it themselves. Maybe they did not intend to destroy our economy, but they did it, and they need to be publicly indicted for it,, and take responsibility for it, so they won't do it again. '); return false;">Quote</a></div> I am delighted to see Mr. Hennessey's appointment to the Commission, and I think it is critical that we identify and deal with the causes of the financial crisis. While it is true that the lack of derivatives regulation was a cause, the fundamental and underlying cause was the government (Democrat Party inspired and controlled) mandated and promoted mortgage and real estate bubble. In the 1990's even the New York Times identified the problem and said that government mandated and promoted sub prime mortgages would cause a financial crisis. There is absolutely no question that the government, particularly in the form of Democrat politicians and their cronies at places like Fannie Mae and Freddie Mac, were the root cause of this near Depression. It sickens me to see them now blaming Wall Street for the problem and taking no responsibility for it themselves. Maybe they did not intend to destroy our economy, but they did it, and they need to be publicly indicted for it,, and take responsibility for it, so they won't do it again.
Reply – Quote
]]> By: Rita Perdue http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14486 Rita Perdue Wed, 13 Jan 2010 02:53:06 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14486 I sure hope the "banks" get questioned on WHY they are the king-pin in this log jam of our economy - by freezing up credit so that new and current businesses can't create new jobs. They have got to let the purse strings loosen up so we can get the ball rolling again. This mess is their fault to begin with and they hold the keys to keeping the rest of us in sufferage! Somebody make them do the right thing. <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14486','Rita Perdue'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14486','Rita Perdue','I sure hope the "banks" get questioned on WHY they are the king-pin in this log jam of our economy - by freezing up credit so that new and current businesses can't create new jobs. They have got to let the purse strings loosen up so we can get the ball rolling again. This mess is their fault to begin with and they hold the keys to keeping the rest of us in sufferage! Somebody make them do the right thing. '); return false;">Quote</a></div> I sure hope the "banks" get questioned on WHY they are the king-pin in this log jam of our economy – by freezing up credit so that new and current businesses can't create new jobs. They have got to let the purse strings loosen up so we can get the ball rolling again. This mess is their fault to begin with and they hold the keys to keeping the rest of us in sufferage! Somebody make them do the right thing.
Reply – Quote
]]> By: Financial Crisis Inquiry Commission: A User’s Guide » New Deal 2.0 http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14473 Financial Crisis Inquiry Commission: A User’s Guide » New Deal 2.0 Tue, 12 Jan 2010 16:54:05 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14473 [...] Frontline documentary: The Warning, is on the commission. Keith Hennessey, who in addition to being a blogger, was Director of the National Economic Council for President Bush in 2008 (may want to use subpoena [...]<div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14473','Financial Crisis Inquiry Commission: A User’s Guide » New Deal 2.0'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14473','Financial Crisis Inquiry Commission: A User’s Guide » New Deal 2.0','[...] Frontline documentary: The Warning, is on the commission. Keith Hennessey, who in addition to being a blogger, was Director of the National Economic Council for President Bush in 2008 (may want to use subpoena [...]'); return false;">Quote</a></div> [...] Frontline documentary: The Warning, is on the commission. Keith Hennessey, who in addition to being a blogger, was Director of the National Economic Council for President Bush in 2008 (may want to use subpoena [...]
Reply – Quote
]]> By: Stephanie http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14462 Stephanie Tue, 12 Jan 2010 10:07:14 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14462 Here's a question: Companies that make drugs, food, autos, airplanes, toys, home appliances, etc. must submit their new products to rigorous government testing to assure their safety before they can be sold to the public. In light of their well-demonstrated risk to the public-at-large, why should new financial products -- esoteric derivatives, credit default swaps, etc. -- not be subject to similar scrutiny? Is it not time to bring the entire over-the-counter market under government regulation? Stephanie Mcnealy <a href="http://www.famous-philanthropists.org/" target="_blank">http://www.famous-philanthropists.org/</a> <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14462','Stephanie'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14462','Stephanie','Here's a question: Companies that make drugs, food, autos, airplanes, toys, home appliances, etc. must submit their new products to rigorous government testing to assure their safety before they can be sold to the public. In light of their well-demonstrated risk to the public-at-large, why should new financial products -- esoteric derivatives, credit default swaps, etc. -- not be subject to similar scrutiny? Is it not time to bring the entire over-the-counter market under government regulation? \nStephanie Mcnealy \n<a href=\"http:\/\/www.famous-philanthropists.org\/\" target=\"_blank\">http:\/\/www.famous-philanthropists.org\/<\/a> '); return false;">Quote</a></div> Here's a question: Companies that make drugs, food, autos, airplanes, toys, home appliances, etc. must submit their new products to rigorous government testing to assure their safety before they can be sold to the public. In light of their well-demonstrated risk to the public-at-large, why should new financial products — esoteric derivatives, credit default swaps, etc. — not be subject to similar scrutiny? Is it not time to bring the entire over-the-counter market under government regulation?
Stephanie Mcnealy
http://www.famous-philanthropists.org/
Reply – Quote
]]> By: Richard Davet http://keithhennessey.com/2009/07/16/fcic/comment-page-2/#comment-14419 Richard Davet Mon, 11 Jan 2010 18:02:01 +0000 http://keithhennessey.com/2009/07/17/the-financial-crisis-inquiry-commission/#comment-14419 continued... ? 1, When do you and the Board intend to disclose to shareholders the consequences of the Bank’s vigorous involvement with this fatally flawed business model? ? 2 Isn’t this business a little like your running a house of ill repute while knowing that all your ladies have aids and what are you doing to your client base? ? 3, What would you say to the skeptics that are out there that think that all players involved with the GSE Business Model are engaged in a simple criminal scheme, albeit of a dimension that we have never seen before, that a prosecutor would call “theft by deception” with the American taxpayer as the victim? <div class="comment-remix-meta"><a href="#" class="replyto" onclick="replyto('14419','Richard Davet'); return false;">Reply</a> - <a href="#" class="quote" onclick="quote('14419','Richard Davet','continued... \n \n? 1, When do you and the Board intend to disclose to shareholders the consequences of the Bank’s vigorous involvement with this fatally flawed business model? \n \n? 2 Isn’t this business a little like your running a house of ill repute while knowing that all your ladies have aids and what are you doing to your client base? \n \n? 3, What would you say to the skeptics that are out there that think that all players involved with the GSE Business Model are engaged in a simple criminal scheme, albeit of a dimension that we have never seen before, that a prosecutor would call “theft by deception” with the American taxpayer as the victim? '); return false;">Quote</a></div> continued…

? 1, When do you and the Board intend to disclose to shareholders the consequences of the Bank’s vigorous involvement with this fatally flawed business model?

? 2 Isn’t this business a little like your running a house of ill repute while knowing that all your ladies have aids and what are you doing to your client base?

? 3, What would you say to the skeptics that are out there that think that all players involved with the GSE Business Model are engaged in a simple criminal scheme, albeit of a dimension that we have never seen before, that a prosecutor would call “theft by deception” with the American taxpayer as the victim?

Reply – Quote
]]>