Goldman Hearings are the Right Subject; Wrong Target
by Capitol ConfidentialAs self-righteous Senators grill Goldman Sachs about their role in the housing bubble, it would not be far fetched to request that the Senators switch seats with the Goldman executives.
After all, it wasn’t Goldman that passed the Community Reinvestment Act that forced banks to make loans to people who could never pay them back. It wasn’t Goldman that created and supported Fannie Mae and Freddie Mac. And it wasn’t Goldman that drove interest rates down to a below market level to cause a housing rush not seen since gold was found in them thar’ hills in the mid-1800s.
But if Senators were really interested in finding out the cause of the housing bubble, they would call one Eric Stein to the dais.
Mr. Stein is currently that Deputy Secretary of Treasury for consumer protection and is likely to head the vastly powerful Consumer Bureaucracy currently being pushed by big banks and Wall Street. But prior to his appointment to Treasury, Mr. Stein the bag man for the Center for Responsible Lending and its many Self Help subsidiaries, was singly responsible for more bad loans than all Goldman employees together. Working with billionaire con-man John Paulson, Stein lobbied to pass the laws at the root of the crisis and pressured banks to make bad loans that caused their portfolios to collapse when the economy turned. They were the Bonnie and Clyde of the subprime mortgage world.
It’s time for a hearing focusing on the real cause of the housing bubble. It’s time to call Eric Stein up to the Hill for questioning under oath.
Email this to a friend | Print |
Share on Facebook
| Tweet this
| 
Follow Us on Twitter
Subscribe via RSS
Got a Tip?
184 Comments
Does that senator have three fingers pointing back at himself?
Thank you for voicing what I have been thinking since these hearings began. Goldman-Sachs didn't do anything wrong, indeed, they had a responsibility to protect as much as possible their firm and their stakeholders. They knew these subprime loans foisted on them by the fed gov't were poison. When is Barney Frank, Chris Dodd and Maxine Waters going to be called to appear before a committee to determine what their role was? This is nothing but a witch hunt to influence uninformed Americans that Wall Street is bad and needs to be controlled. The problem is they were controlled, and that control led to the mess we're in today.
And the Oscar for the best bullshit tirade during a bogus Senate Hearing goes to……
Yep. THe questioners should be the questionees! Many in the senate and the democratic party are directly behind the ruination of the economy, but they need their whipping boy to try to blame. Call in DODD, FRANK, RAINES, RENO, EMANUEL, SCHUMER, GORELICK, CLINTON, and OBAMA. Those are the ones who need to answer questions, if you could get a truthful answer from them. Doubtful! Frank's former boyfriend could probably shed some light on the issue too.
" The Community Reinvestment Act "
There are 300 million people in this country,……………..
out of that 300 million,…………………
only a small percentage have a clue as to what this piece of legislation is and much less what it led to,……….
one thing is certain though,……………………..
all 300 million are most certainly feeling the affects of,……….. The Community Reinvestment Act.
Thank you Jimmy.
Nice comb-over.
Good grief, will they stop spending our money on these corrupt hearings. We all know they are together.
We have some jail space for these criminals.
You apologists for Goldman Sachs continue on with this line but the FACTS are that sub-prime mortgages are not the problem, derivatives are.
Total charade! Dog-n-pony set up to appease the hypnotized electorate that Washington is looking out for the voter…hahahahahaha…….
God, the propaganda spewed by this site is unbelievable. They stick to the tired mantra that government is always the one and only problem. Sure, Fannie and Freddie were problems but they weren't the entire problem. Sure, interest rates were kept artificially low but that came from a private banking cartel called the Federal Reserve, not lawmakers. NeoCON echo chambers like this one and their cohorts in the Republican establishment are doing everything they can to stall financial regulation for their buddies on Wall Street, but people are seeing through the Big Lie these sheisters are peddling.
If Goldman is so bad why did Obama hire so many of them?
Actually, the CRA didn't force anyone to make sub-prime loans. Congress changed the charter of Fannie/Freddie in 1992 to include an "affordable housing" mandate. And with that they would set a quota each year of mortgages purchased for their portfolios that came from "underserved" areas. Fannie's puchases in 1994 were 34% and rose to 50% by 2000. As part of the charter change was a requirement that all housing authority's investigate the underwriting process to remove "obstacles" to qualifying in underserved areas. When you have a willing buyer of sub-primes, someone will supply them.
The Community Reinvestment Act was a reaction to racial discrimination in the housing market. It was passed into law in 1977. It put no requirement on banks to make bad loans, only not to discriminate on the basis of race or sex. It functioned fine for over 20 years until Graham-Leach-Bliley was passed in 1999. This law removed the distinction between commercial and investment banking and created a huge regulatory loophole for investment banks to operate without traditional banking oversight. It also created a huge demand for collateralized debt to feed the derivatives market. That is what allowed Freddie and Fannie to lower its lending standards. It also created the moral hazard that is still with us today and the reason we need financial reform.
Let's see you respond to that with three sentences Ralph.
I agree!
I watched that same Senator on Fox last night injecting F-bombs (they were bleeped so I'm assuming the F-bomb) into the questioning. How unprofessional! Just because the VP did it doesn't make it ok, nor acceptable. I would have walked out once he dropped the F-bomb and said I'll return when he decides to act professionally!
The illustrious government caused this mess with their sociaI medling in the free-market economy. Those seats should be filled with politicians, not Sachs CEOs!
Along this same line of thinking….
http://www.stopapologizingforme.com/cblog/index.p...
I still have to give that to Al Gore. Boy could that guy bloviate with conviction about absolutely nothing.
Who confirmed the federal reserve chairs??? Seems to me you have overdosed on the liberal kool-aid! Dodd, Frank, Raines, Reno, Carter, Clinton, Gorelick, Emanuel are the ones who profitted greatly, by legislation the democrats wrote and passed. Frank swore Fannie was on firm footing, when the republicans tried to do something about the damage that lending to borrowers who couldn't repay, was doing. Banks were required, by law, to make these loans. Quite frankly, I think those responsible should be strung up.
Red Dwarf, you are almost correct, our federal government did not mandate that the states all raise their drinking age to 21 or the speed limit to 55mph,(remember that debacle) but if you didn’t then they cut off federal monies. So yes CRA did not make the sub-prime loans they just said if you don’t do a certain percentage of sub-prime loans we will not buy your bonds. That is just like California made a provision in a law that if they did not vote on it that it would become law in 90 days, that is so all the legislators can say, “I did not vote for that”. It is all about plausible deniability.
Whats been educational for me is to get an idea of what, and how large, the derivative market is.
Its really nothing more than Legalized gambling… with companies like Goldmans being the "house" and taking a cut. The money changes hands… there are winners and losers, but nothing is PRODUCED. This adds to the GDP (whcih measures money changing hands), but does not MAKE anything… as its a zero sum game. Its like basing an economy on Vegas… and because gamblers win and loose, counting it a good and sustainable economy.
Capitalism was supposed to be folks betting that companies would be a success, by producing goods, and wealth… ie INVESTING in things… not just a legalized betting cartel (with companies lossing so badly it almost wrecked the entire banking system).
Hearing 'sh!t' coming out of the mouth of that turd is rather poetic.
they didnt start making the bad loans until boy clinton made them with the two-handed sword of charging hgher interest rates to banks who did not comply with "minority"lending guidelines and had the justice department publicly prosecute a couple of banks for "discrimination" for discriminating between people who qualified for loans and people who didnt. Just ask, when did you see the NINJA (no income, no job, no assets) loans appear? when did you see "interest only" mortgages appear? youll find the truth there, if you can stand it…………………………….
You forgot to add the criminality of the democratic party in setting up this scheme.
CapiCon is right. Stein forced GS to design and sell products GS internal memos described as "shitty." He also forced GS to bet those "shitty" investments would crater, leaving the purchasers with a worthless portfolio which GS made millions off their unfotunate trust in the integrity of GS. Stein is to blame for it all!! And that poor little Frenchman they badgered on the witness satnd, Tourre. He must be outraged at the amount of money Stein forced him to make off the implosion of the market!
Head on over to MediaMatters, or msnbc. There is no propaganda there.
(!)
"are doing everything they can to stall financial regulation for their buddies on Wall Street,"
Are you freaking kidding me? Don';t you realize that Diodd's bill is a GIFT top Wall Street (at our expense, and that of small banks and businesses)- and that Goldman and Citi and BOA are all lobbying heavily in favor? Whon do you think Dodd's and Obama's biggest donors are?
Get past the huckster-rhetoric of your con-man president and look at what this bill actually does- it no more restrains Wall Street than the "Stimulus" stimulated anything.
And add to that Cuomo's CRA regulatory changes of 1995 and 1997.
Boy, that's a tough one. A clear Oscar contender would have been Waxman, except he backed out on his show trial against CEO for taking write downs because of Obamacare, because it turns out they were right and indeed required by law to do so. Poor Henry lost a sweet leading man role because of a vicious outbreak of Truth and discretion. Maybe we can give Waxman a Golden Torquemada statue for his lifetime of unachievement?
Obviously you are white and have never experienced the racism in the housing market and you see not need for federal oversight.
They are not writing junk debt today but derivatives continue to be bundled and sold as securities… with no oversight. At least congress moved to create the FHFA to monitor Fannie and Freddie. Synthetic derivatives have no such transparency.
From the New York Times, September 30,1999- http://www.nytimes.com/1999/09/30/business/fannie... Sept. 29— In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders." ………….."Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits." ____
And from The Village Voice, August 5 2008 ……………….http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/____"Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why."____The origins of our current crisis are clear- there should be a few more seats next to Goldman Sachs for our elected officials. As P.J. O'Rourke put it – "Giving money and power to government is like giving whiskey and car keys to teenage boys." ____________ ________
Yep. Bread and circuses…. All the drama of "professional" wrestling, however.
How come the government attacks the banks and wall street everytime the market reaches 11000? Last time it was the "bank tax" now it's GS? I don't think you'll see 12000 or more for years under this POTUS. Why does Obama keep messing with peoples 401ks and IRAs? Force the market down. I wonder if GS is betting against us again.
And what ever happened to the bank tax? Just one more tool to drive the stock market down. Whats next?
This whole thing is corny and laughable. Congress is shocked that a tiger has stripes. What did they think investment banks do? They make markets, they take bets, they place bets. You don't have to like it, but big deal. That is not what created the housing bubble or caused it to crash.
\”Obviously you are white and have never experienced the racism in the
housing market\”
Yeah, right. That all-pervasive racism that kept my black and Venezuelan
and Rajput and Korean and Japanese neighbors from living in my
neighborhood….. oh, right.
Stop selling thelefty bullshit \”victimhood\” narrative. Nobody's buying it.
While the guys as GS and the rest of the money merchants on the street aren't exactly on the up and up, Wall Street is and always has been a "Vegas" type enterprise where "you pays your money and you takes your chances". The worst that could be said about these guys is that they're guilty of insider trading, which begs the question; where was the SEC? One must then ask logically; If congress makes the laws and appoints people to oversee and ensure compliance aren't they then by extension guilty for not following up. Just the fact that Mr. Obama recieved almost a million dollars from the boys at GS smacks of impropriety. As the blogger earlier stated; The Community Reinvestment Act, Fannie Mae, Freddie Mac and a host of croooked and complicit politicians are most likely the cause of the meltdown Passing legislation to 'fix' the problem only serves to hide their complicity in the crime.
…said the angry white man.
and now they want to do the same thing with carbon credits…..trading air.
Gee Mickey,…………….. I can't get a word in edgewise,..next time try and be a little
less confrontationaly clueless.
I think the folks answered your question to me quite well (3 lines)
You may want to see GRIZZinWI's comments below there Mickey.
Maybe you were still on that B-52 bomber when all this was going on and thus,…..
unaware what Jimmy and Billie were up to.
And 994 thousand of their money?
I'm voting for Dick Smalley!
"They stick to the tired mantra that government is always the one and only problem."
…………………… because it is. It was through government action that credit standards were lowered. It was government inaction on the part of the SEC that allowed garbage mortgage bundles to be labeled AAA by S&P, Moodys, and Fitch. If the mortgages were really worth what they said they were, we wouldn't be here having this discussion- those CDO's backed by mortgage backed securities might actually be worth something. And we have the SEC and a host of other agencies that failed to do their job. Instead of fixing the problems at the agencies, we just do more of the same- create another agency on top of the failed one and leave one of the biggest causes of the problem out of the legislation altogether.
idiot. without the sub-primes caused by the CRA, there wouldn't have BEEN derivatives!
All I see here are Rush LImbaugh talking points. Widen your view.
The only one peddling lies here is you.
Siding with Goldman Sachs against the American people is never a good call. Even the senate Republicans have realized we will not let them get away with filibustering the issue under the table. They have been shamed into action.
They had to…they couldn't credibly transfer blame to the Republicans! You didn't really think they were going to actually take responsibility for something, did you?
You're right, Dodd is a tool of the financial industry and he is doing what he can to block meaningful reform. Dodd is a corporatist just like Obama. I know where their campaign money came from.
But this bill is not all bad, and the pathetic propaganda in this BigGov article is a reflection of the Republican establishment spin factory that no one is buying anymore.
Red obviously indicates your Communist leanings, so I assume dwarf relates in some way to your intellectual capacity.
People are not angry about Sachs making markets. They are angry because they marketed collateralized debt securities as safe investments while simultaneously betting they will fail by selling them short. If they can prove that they used their financial position to influence the rating service to get a triple A rating it will be the final nail in their coffin.Especially if they can prove the accusation that Sachs cherry picked bad debt to bundle.
Speak for yourself, hate-filled white guilt-monger.
What bank tax? What are you talking about? Do you seriously believe the president is conspiring to keep the DJIA below 12k and wants to destroy our 401ks?
I think you just answered your own question.
Senate Republicans are caving to the American people. It's just a matter of time now.
Righties squealed when FDR created the SEC and now you want us to believe you want to see more oversight from them. Sounds fishy.
You are going to get all the oversight you can stand when reform passes. And it's only the beginning.
Nonsense. Republicans loaded that legislation up with poison pills that they knew Democrats would never support. They had no intention of tying up Fannie and Freddie while it was feeding the beast (the investment banks).
Um, \”the American people\” and \”liberals\” are mutually exclusive categories.
And the unregulated derivatives market and cheap money from the Fed insured an insatiable demand for collateralized debt.
Try and deal with the very good points Red makes rather than dismissing him with labeling and personal insults… if you can.
Excellent! Thanks, again.
You would shoot someone in the face because you disagree with his politics?
Shelby just now is saying the GOP ended the filibuster because the Dems
caved on a key provision: the bailouts. Way to spin, troll.
Clinton has admitted this was a mistake. Haven't heard Phil Graham apologize yet.
yawn
A fine refresher if you are not put off by disinformation. Fannie and Freddie now have their operations oversight provided by the FHFA. The derivatives market which provide the demand for collateralized debt is still unregulated and not transparent. And Wall Street is fighting this reform legislation with $500 million in lobbying cash.
Perhaps if we take some of the incentive out of creating synthetic debt markets, Wall Street will invest in someone who will actually build something.
Don't you have a 401k? They are not just gambling with their money. We are all at risk and we should all have an interest in seeing that they do not privatized their profits while they socialize the risk. And melt down the market every ten years so that no one can ever afford to retire.
then type slower
The one they talked about and drove the DOW under 10000 Do your homework child. One other thing, they talked about a bank tax but never did anything after the DOW went below 10000.
Look and see when the SEC was not doing their job, bub. It was primarily the eight years under Bush (less so under Clinton), who followed in the extreme anti-regulatory mindset of Reagan.
Now that's funny. What he actually said was that he decided to trust that the majority would address their grievances on the senate floor. He was feeling the heat of being seen on the tv machine voting against reform everyday. And the Democrats were moving in the cots and were happy to have this fight. Just like I am.
Good one…
Prove it. Put up or shut up time.
Ooops… he got you off your talking points and now you don't have anything to say. Quick, better call em commies.
Ah a troll. I'll never shut up. you and your President LIE ! Just like all libtards! Get a job in a sideshow freak!
I'm a liberal American citizen.
I thought so… when you've got nothing just start name calling and personal insults. I see it here everyday.
Wolf is right. being a stock broker for 20 years I asked myself the same question. This is 2nd time it's happened. First it was BHO now it's the senates turn. Sorry mikatollah you are totally wrong.
Sorry pal. But there was never a "bank tax" that caused the market to crash. But I'm always open to proof.
It's the mystery of this board, why anyone bothers to respond to any of your stupid nonsense – I guess us conservatives are just like that, we have HOPE and that will never die!
You are right there was never a bank tax but they did talk about it and the market took a dive below 10000 and they never talked about it again. None the less Wolf is correct.
Please Mikey. The buyers of this stuff were not blindly relying on Goldman and I don't recall any evdience of representations of the safety of these speculative investments by Goldman. These weren't sold to widows and orphans. Are we shocked, just shocked gambling was going on in a casino? This is really not much of a scandal and detracts from a real investigation of where the toxic crap came from that was bundled into CDOs and then bet on. Don't blame the gamblers if the race is fixed. And if you think the Dems are going to take their buddies at Goldman down you are more clueless than I thought.
ohhh your anger is seeping out there mika – got your undies in a bunch there baby boy?
you and your band of trolls talking about propoganda is freakin hilarious! Tell me mika, just how much money did soros' pour into his propoganda machines?
You are right, And tehre are already laws and agencies to deal with whatever Goldman allegedly did. So why do we need 14oo pages of "reform" to deal with it? Because it is not about reform or Goldman. This is demogoguary at it finest, which is all the DEms have since they know everyone actually hates their ideas when exposed. And just wait until Obamacare really sinks in.
You are right, And tehre are already laws and agencies to deal with whatever Goldman allegedly did. So why do we need 14oo pages of "reform" to deal with it? Because it is not about reform or Goldman. This is demogoguary at it finest, which is all the DEms have since they know everyone actually hates their ideas when exposed. And just wait until Obamacare really sinks in.
http://www.nytimes.com/2010/01/15/us/15tax.html
WASHINGTON — President Obama laid down his proposal for a new tax on the nation’s largest financial institutions on Thursday, saying he wanted “to recover every single dime the American people are owed” for bailing out the economy.
It doesn't stop…
Once you find a bogeyman, you continue to use him until he no longer works…
Then you move on to the next. I'm sure this Stein fella was the cause of it all. He wrote the laws, convinced the banks to lend, etc. etc.
Things like what our economy experienced took 30 years to make. Keep fishing…
I am one of those weirdos that watched the hearings all day yesterday. I got a creepy feeling when Lloyd Blankfein was on board for the legislation supporting their curious brand of financial reform. It was rather like the fox supporting tougher building codes for hen houses.
Also – there is something sleazy about one arguably corrupt group questioning and berating another arguably corrupt group.
You are truly a sick sick individual – totally brainwashed and a liar to boot –
I realize you think you are clever, I assure you you're not
I realize you think you can inform anybody on something only you know and understand, I assure you you're completely off the mark, nothing you've shared has held a shred of truth other than the obvious reality that you are a lying fool –
You try and sound like you know something no one else could know – tell us all mika, are you at the WH daily? Do you sit in on meetings? Do you have a close contact that knows what is really going on any given day? Do you work for anyone in the WH? I'm guessing not, therefore sir, you are a fraud and a big mouth fool – but hey, keep going! The reality of how dense your side is really really really inspires us ALL!!
kinda your method mikadingbat – RACIST RACIST – it's your catch all – fool
It's sorta like:
"yesterday was so long ago I don't even remember" …………and as for tomorrow,………
"I don't plan that far ahead" (vintage Bogey)
No – NO ONE told the parasitic bankers to do that.
Great,…get up to speed now.
Looks like we are on the same wavelength as I published similar thoughts today. Even the socialists realize Obama is in bed with Wall Street.
The congressional RATS will never address or attempt to repeal the Jimmy Carter "1977 Community Reinvestment Act." Why??? Because Fat Fannie and Bloated Freddie are the Progressives/Socialistic GSEs kick-back-cash-cows. Plus, addressing and debating the CRA and Clinton add-ons of which was the starting point of the financial melt down would expose all of their wort's and transgressions.
/
For you Senator Carl Levin:
http://i39.tinypic.com/oasu8m.jpg
We will see. The bill has made it to the senate floor now so there will be a bill.
Hurts to lose every time, doesn't it? You are just on the wrong side of history.
The market digests and discounts information everyday. To blame rumors of a bank tax or any tax for the decline, and then say it's some kind of plot by the president to keep the market below 12,000 is nonsense.
Can someone please tell me the difference in….
The G-S CEO refusing to tell investors his business partner was betting against their product in order to keep making a profit ….
the CEO's of RJ Reynolds or Phillip Morris hiding reports proving cigarettes are addictive and carcinogenic in order to keep turning a profit…
and Kathleen Sebelius refusing to release a report that would blow up the vote on the health care bill in order to secure a vast increase in her own personal power (since the HHS Secretery is now pretty much God's Little Sister)?
And the answer is…..
The CEO's can't FORCE you to buy their "sh#@ty deals"….
Where are YOUR hearings on defrauding the public Ms. Sebelius?
So the market crashed on this news? I doubt it. However it reacted it didn't last more than a day or two before the market absorbed it, realized it isn't the end of the world and moved on. Seem to me an experienced stock broker would have seen enough of this kind of thing to not overreact as you appear to be doing.
Last I checked the market was over 11,000.
More name calling…. I must be on to something here.
You must be logged in to post a comment.