Page 1 of 2 12 LastLast
Results 1 to 15 of 24

Thread: 25 to Blame for the Financial Crisis

  1. #1
    Professor (retired) Senior Contributor Merlin's Avatar
    Join Date
    02 Feb 09
    Location
    Singapore, Singapore, Singapore
    Posts
    2,674

    25 to Blame for the Financial Crisis

    This is informative, from Time magazine. I won't post any excerpt as there are 16 linked pages in this link below.

    Among these 25, you may know Alan Greenspan, Phil Gramm, Christopher Cox, 'the American consumer', Hank Paulson, Richard Fuld, Bill Clinton, George Bush, Stan O'Neal, Wen Jiabao, and Bernard Madoff. The explanation under each name is not too long, probably should be longer.

    Time: 25 People To Blame For The Financial Crisis
    Last edited by Merlin; 24 Mar 09, at 06:32.

  2. #2
    Professor (retired) Senior Contributor Merlin's Avatar
    Join Date
    02 Feb 09
    Location
    Singapore, Singapore, Singapore
    Posts
    2,674
    Here are the excerpts of the write-ups on the five that Time rank as #1 to #5.

    Angelo Mozilio

    As the co-founder and former CEO of mortgage-lender Countrywide, Mozilo played a significant role in the current mortgage crisis. Time ranks him their #1 person to blame for the economic mess.

    "Countrywide wasn't the first to make exotic mortgages to borrowers with questionable ability to repay, but it did, in its all-out embrace of such sales, legitimize the notion that practically any adult could handle a big, fat mortgage," Time reported.

    When Bank of America bought Countrywide in 2008, it allegedly had to pay billions to settle predatory lending claims waged against Countrywide.

    Phil Gramm

    Gramm, who sits in the #2 spot on Time's list, used his post as chairman of the Senate Banking Committee from 1995-2003 to champion financial deregulation.

    These two moves by Gramm were especially significant in their role in the financial crisis: 1) Gramm helped ensure that credit-default swaps were exempt from regulation by the Commodity Futures Tranding Commission, and 2) Gramm helped repeal the Glass-Steagall Act, which had separated commercial banks and Wall Street.

    Alan Greenspan

    Like Gramm, Greenspan was vocal in his disdain for regulation. It was this anti-regulation mentality in combination with the Federal Reserve Chairman's insistence on keeping interest rates low in the early 2000s that helped bring about the mortgage crisis.

    Greenspan has since admitted that his avid deregulation stance was somewhat of a "mistake."

    Greenspan is #3 on the list.

    Christopher Cox

    As the former chief of the SEC, Cox presided over an era of fairly lax regulation. Even though the number of investment advisors grew, the SEC did not bring on more enforcement and compliance officers to help oversee the industry.

    Cox said that the SEC did not have the authority to lessen the leveraging that helped bring about the financial collapse.

    "In truth the SEC had plenty of power to go after big investment banks like Lehman Brothers and Merrill Lynch for better disclosure, but chose not to," Time reported.

    Cox is #4 on the list.

    The American Consumer

    It's easy to blame the Wall Street fat cats, the excess-loving CEOs and the government. But we should take a long hard look at our role as American consumers in the financial meltdown.

    Household debt in America jumped to more than 130% of income in 2007. Yes, ladies and gentleman, we lived beyond - way, way beyond - our means, and now we're paying the price.

    The American consumer rounds out the #5 spot on the list.
    Last edited by Merlin; 24 Mar 09, at 07:41.

  3. #3
    artist Senior Contributor Donnie's Avatar
    Join Date
    25 Aug 03
    Location
    pa usa
    Posts
    1,072
    this list doesnt have barney frank or dodd. they should be at the top.
    Whoever is unjust let him be unjust still
    Whoever is righteous let him be righteous still
    Whoever is filthy let him be filthy still
    Listen to the words long written down
    When the man comes around- Johnny Cash

  4. #4
    Professor (retired) Senior Contributor Merlin's Avatar
    Join Date
    02 Feb 09
    Location
    Singapore, Singapore, Singapore
    Posts
    2,674
    Quote Originally Posted by Donnie View Post
    this list doesnt have barney frank or dodd. they should be at the top.
    Do give us brief explanations of who they are (or were) and why they deserve to be blamed.

  5. #5
    artist Senior Contributor Donnie's Avatar
    Join Date
    25 Aug 03
    Location
    pa usa
    Posts
    1,072
    sept 2003
    ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
    http://www.washingtonpost.com/ac2/wp...nguage=printer

    oct 2003
    Two key Democrats, Reps. Barney Frank of Massachusetts and Paul E. Kanjorski of Pennsylvania, said they will oppose any attempt to make the regulator less independent from Treasury or to move business oversight out of HUD.
    http://www.nytimes.com/2003/09/11/bu...gewanted=print

    2005
    Senate Republicans including Senator McCain pleaded with Congress in 2005 and 2006 to pass legislation to get Fannie and Freddie under control. Senate Republicans even got a bill to do just that out of the Senate Banking Committee (S. 190), but Senate Democrats led by Senator Harry Reid and Christopher Dodd, with the vocal backing of Massachusetts Congressman Barney Frank, said there was no crisis and blocked a vote on the Senate floor.


    During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd -- who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 -- actively opposed such measures and further weakened existing regulation
    http://www.washingtonpost.com/wp-dyn...091102841.html

    Whoever is unjust let him be unjust still
    Whoever is righteous let him be righteous still
    Whoever is filthy let him be filthy still
    Listen to the words long written down
    When the man comes around- Johnny Cash

  6. #6
    Senior Contributor Wooglin's Avatar
    Join Date
    08 Dec 05
    Location
    USA
    Posts
    1,378
    Quote Originally Posted by Donnie View Post
    this list doesnt have barney frank or dodd. they should be at the top.
    Agreed. It's hard to take this list seriously when it overlooks two such obvious choices for top spots. They're not even on the list.

  7. #7
    Official Thread Jacker Senior Contributor gunnut's Avatar
    Join Date
    27 Jan 06
    Location
    DPRK, Demokratik People's Republik of Kalifornia
    Posts
    22,641
    How odd... This list only has one democrat, Bill Clinton, on it.

    Barney Frank and Chris Dodd definitely belong on the list. So does Jimmy Carter.

    Bernie Madoff isn't even close to the type of influence these people had. He's just a petty thief among this group.
    "Only Nixon can go to China." -- Old Vulcan proverb.

  8. #8
    Senior Contributor
    Join Date
    07 Oct 08
    Location
    CT
    Posts
    5,229
    Maybe because if the 99 bill hadnt passed none of this would of happened?

  9. #9
    artist Senior Contributor Donnie's Avatar
    Join Date
    25 Aug 03
    Location
    pa usa
    Posts
    1,072
    Quote Originally Posted by Roosveltrepub View Post
    Maybe because if the 99 bill hadnt passed none of this would of happened?
    glass steagall was merely an illusion by 1999, the real damage had already been done in the lates 80's early 90's
    Whoever is unjust let him be unjust still
    Whoever is righteous let him be righteous still
    Whoever is filthy let him be filthy still
    Listen to the words long written down
    When the man comes around- Johnny Cash

  10. #10
    Professor (retired) Senior Contributor Merlin's Avatar
    Join Date
    02 Feb 09
    Location
    Singapore, Singapore, Singapore
    Posts
    2,674
    Let's look at the other big bad guys listed by Time magazine, see post #1. The brief explanations below are about those next five.

    Hank Paulson

    Paulson, a former Goldman Sachs exec in the #6 spot on this list, became Treasury Secretary in 2006. Time reports that "he ended up almost single handedly running the country's economic policy for the last year of the Bush Administration."

    That's some power. But did he make the right moves? Maybe not. The main complaints about Paulson are: 1) he was late in starting to aggressively battle the financial crisis, 2) he should not have let Lehman Brothers fail, and 3) bailout bill was a mess.

    Richard Fuld

    Fuld, the former CEO of Lehman Brothers, helped lead the firm into its eventual collapse by diving into the subprime lending arena whole-heartedly.

    Fuld was #9 on CNN's "Ten Most Wanted: Culprits of the Collapse" list about who brought on the financial crisis and holds the #11 spot on Time's list.

    But despite his role in the mess, Fuld was paid handsomely, recieving nearly half a billion dollars during his tenure at Lehman.

    Bill Clinton

    It might surprise many that Clinton is even on this list (he's #13), especially because his presidency was marked by economic prosperity. But during his tenure, America saw a lot of financial deregulation, which set the stage for the excess to come.

    Clinton helped repeal the Glass-Steagall Act, which had separated commercial banks from Wall Street, and signed the Commodity Futures Modernization Act, which prevented the Commodity Futures Trading Commission from regulating swaps. He also helped make housing rules more lax by rewriting legislation to pressure banks into lending to low-income families.

    George W. Bush
    It's easy to blame Bush. After all, the meltdown did happen on his watch. But of course, that's a far too simplistic explanation.

    Bush made some mistakes, many of them related to deregulation. For example, Bush's helping block the proposal by former SEC chief, William Donaldson, to boost regulation of mutual and hedge funds, was pretty detrimental to the economy.

    Bush is #14 on the list.

    Stan O'Neal

    When times were good at Merrill Lynch, they were good. But then came Merrill's dive into creating collateralized debt obligations (CDOs), which are mostly comprised of subprime mortgage bonds.

    Stan O'Neal, the CEO of Merrill at the time, oversaw this process, letting Merrill build up $41 billion in subprime CDOs and mortgage bonds, according to Fortune magazine.

    And that's when times became pretty bad at Merrill.

    O'Neal is #15 on the list.

  11. #11
    Professor (retired) Senior Contributor Merlin's Avatar
    Join Date
    02 Feb 09
    Location
    Singapore, Singapore, Singapore
    Posts
    2,674
    Quote Originally Posted by Merlin View Post
    .. Among these 25, you may know Alan Greenspan, Phil Gramm, Christopher Cox, 'the American consumer', Hank Paulson, Richard Fuld, Bill Clinton, George Bush, Stan O'Neal, Wen Jiabao, and Bernard Madoff. ...
    Madoff Sentenced to Maximum 150 Years
    As Bernie Madoff apologizes, victims denounce the record Ponzi schemer in court as a "monster" and "psychopath"

    29 June [BusinessWeek] Retribution, deterrence, and symbolism for the victims, said U.S. District Judge Denny Chin, were among the most important factors in his decision to sentence Bernard L. Madoff to 150 years in prison. ...

  12. #12
    Professor (retired) Senior Contributor Merlin's Avatar
    Join Date
    02 Feb 09
    Location
    Singapore, Singapore, Singapore
    Posts
    2,674
    I was curious who got to know and exposed Madoff's multi-billion dollar fraud. It was his sons Mark and Andrew that did it in Dec 2008. This below is from Wikipedia.

    On December 10, 2008, Madoff informed his sons that he decided to pay several million dollars in bonuses two months earlier than scheduled. According to federal investigators, Mark and Andrew demanded to know how their father could pay bonuses if he couldn't afford to pay investors. Madoff then admitted the asset management arm of his firm was an elaborate Ponzi scheme. Through their attorney, Madoff's sons reported their father to federal authorities. On December 11, he was arrested and charged with securities fraud.

  13. #13
    Banned SnowLeopard's Avatar
    Join Date
    18 Jul 06
    Location
    Texas
    Posts
    1,509
    Quote Originally Posted by Merlin View Post
    Pity.....I think of other punishments, like roasting him on a spit over a fire fueled by the money he stole, entombing him with only water, salt, pepper, and the money he stole, or super gluing the money to him......then dumping him in the streets where the beggars are......and if he survives that, do it again.
    ______________________________________
    (After some of the loot gets spilled in Tucker's apparent death. "Your friend just had the most expensive funeral in history...,",--Eric Qualen, (w,stte), "Cliffhanger")

  14. #14
    rj1
    rj1 is offline
    Senior Contributor
    Join Date
    19 Feb 08
    Location
    Indiana
    Posts
    777
    Quote Originally Posted by SnowLeopard View Post
    Pity.....I think of other punishments, like roasting him on a spit over a fire fueled by the money he stole, entombing him with only water, salt, pepper, and the money he stole, or super gluing the money to him......then dumping him in the streets where the beggars are......and if he survives that, do it again.
    I'm surprised he's lived this long. With all the money that wilted into nothing, you had to think he probably screwed over some individuals that aren't 100% law-abiding people and are willing to hire someone to do some dirty work for him or her.

    Barry Ritholtz' list on People to Blame from his book. Ritholtz is a traditionally bearish investor:

    Who is to Blame, 1-25 | The Big Picture

    I have an even simpler query: Who and what was at fault in the entire debacle, from Housing to Credit to Collapse? In what order would you assess the blame?

    I don’t mean a soft, squishy, this influenced that who then influenced that guy; I mean a hard list, from most at fault to the least, numbered from 1-20. When you think about all of the moving pieces, and start to assess blame both in absolute and relative terms, the actual blame of real bad guys becomes more obvious.

    In Bailout Nation (Chapter 19), my list went something like this:

    1. Federal Reserve Chairman Alan Greenspan
    2. The Federal Reserve (in its role of setting monetary policy)
    3. Senator Phil Gramm
    4-6. Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings (rating agencies)
    7. The Securities and Exchange Commission (SEC)
    8-9. Mortgage originators and lending banks
    10. Congress
    11. The Federal Reserve again (in its role as bank regulator)
    12. Borrowers and home buyers
    13-17. The five biggest Wall Street firms (Bear Stearns, Lehman Brothers, Merrill Lynch,Morgan Stanley, and Goldman Sachs) and their CEOs
    18. President George W. Bush
    19. President Bill Clinton
    20. President Ronald Reagan
    21-22. Treasury Secretary Henry Paulson
    23-24. Treasury Secretaries Robert Rubin and Lawrence Summers
    25. FOMC Chief Ben Bernanke
    26. Mortgage brokers
    27. Appraisers (the dishonest ones)
    28. Collateralized debt obligation (CDO) managers (who produced the junk)
    29. Institutional investors (pensions, insurance firms, banks, etc.) for
    buying the junk
    30-31. Office of the Comptroller of the Currency (OCC); Office of Thrift
    Supervision (OTS)
    32. State regulatory agencies
    33. Structured investment vehicles (SIVs)/hedge funds for buying the junk

    Several names were omitted for reasons of avoiding repetition: CEOs of major banks and investment firms, the Crony Boards, the AWOL Mutual funds. While the the list in chapter 19 is somewhat incomplete, the book as whole is not.

    Given the elapsed time, I might today move some of these pieces around — raise or lower some a few notches. And in the editing process, some items got moved around to for layout purposes (I had Reagan below Bernanke, but due to space limitations caused by other changes, he got bumped to the Clinton line to preserve the already written index).

    Regardless, I can live with the above as my list of culprits — what does your list look like?
    Last edited by rj1; 30 Jun 09, at 14:03.

  15. #15
    Official Thread Jacker Senior Contributor gunnut's Avatar
    Join Date
    27 Jan 06
    Location
    DPRK, Demokratik People's Republik of Kalifornia
    Posts
    22,641
    Heh...very little mention on that list of prominent democrats. I wonder why?

    Carter? The community reinvestment act?
    Clinton? Strengthening of the community reinvestment act?
    Frank? Who assured us that Fannie and Freddie were doing fine?
    Dodd? Resisted investigation into Fannie and Freddie?
    Democrat congress from 2007? What were they doing?

    Not that I'm saying Bush and Greenspan were guilt-free, but come on, let's have a little balance here.
    "Only Nixon can go to China." -- Old Vulcan proverb.

Page 1 of 2 12 LastLast

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Lee Kuan Yew's View of the World
    By Ray in forum International Economy
    Replies: 78
    Last Post: 05 Sep 09,, 11:38
  2. Japanese Depression?
    By Ironduke in forum International Economy
    Replies: 93
    Last Post: 17 Aug 09,, 02:40
  3. The Big Takeover
    By bolo121 in forum International Economy
    Replies: 1
    Last Post: 22 Mar 09,, 15:44
  4. Only makes you stronger
    By astralis in forum International Politics
    Replies: 24
    Last Post: 10 Mar 09,, 12:37
  5. Financial Crisis Tests Limits of Unity Within the E.U.
    By Ray in forum International Economy
    Replies: 2
    Last Post: 12 Oct 08,, 01:50

Share this thread with friends:

Share this thread with friends:

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •