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Originally Posted by excon

I wasn't asking about the bill, because I don't think bill calls for what I'm calling for.

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It sure sounds like it does just that to me...

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"This bill has been written specifically to end any notion of any kind of a bailout by the American taxpayer again," Dodd said Thursday. "Our bill stops bailouts by imposing... tough new requirements on Wall Street firms. Being too big and too interconnected will cost these firms dearly. And should that not be enough, our legislation, regulators can use the new powers in our legislation to break these firms up before they can take down the economy of our country."

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But as tom said, we already have laws on the books for that. I think Congress is looking at it all wrong, instead of reforming a formerly private industry they need to reform themselves.

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Originally Posted by speechlesstx

It sure sounds like it does just that to me... But as tom said, we already have laws on the books for that.

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Hello Steve:

Good for Dodd.

The anti trust laws AREN'T for this, though. It's a tool designed to fix a fundamentally DIFFERENT problem - monopoly's. It won't work because we ain't never had "too big to fail" before. The IDEA, of course, is the same.

You don't, like tom, believe that a company can't get too big, so that if and when it failed, would take US down with it, do you? To me, that proposition is laughable.

excon

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Originally Posted by excon

You don't, like tom, believe that a company can't get too big, so that if and when it failed, would take US down with it, do you? To me, that proposition is laughable.

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My question is who is too big to fail?

Hundreds of banks failed during the S&L crisis and it didn't take the US down .

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Originally Posted by tomder55

hundreds of banks failed during the S&L crisis and it didn't take the US down .

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Originally Posted by speechlesstx

My question is who is too big to fail?

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Hello righty's:

Uhhh, I don't know, but NONE of the ones tom is talking about were. Plus, we could have 100's of community banks go bust today, and they wouldn't bring us down. But, they're not the one's I'm talking about either.

Let me be specific here. There are ELEVEN banks that are too big to fail in ANYBODY'S book, even toms. Among them are BankofAmerica, Chase, Wells Fargo, Citibank and Goldman Sachs. I'll throw in AIG too, just because.

Even though one could argue whether the takeover of GM and Chrysler was a good thing or not, they weren't "too big to fail". But, BANKS, when they get THAT BIG, have a hold on our national nuts.

excon

Didn't they tell you ? With as many Goldman employees on the govt. payroll the name has officially changed to Government Sucks.

So instead of anyone "too big to fail" we'll just get everyone wanting to be big enough to be protected from risk, right?

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Originally Posted by speechlesstx

So instead of anyone "too big to fail" we'll just get everyone wanting to be big enough to be protected from risk, right?

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Hello again, Steve:

This ain't rocket science. There's this line. Banks ABOVE that line are too big to fail. As it stands now, if THEY collapse, WE have to protect them cause they'll take us down with them... That's why we need to break 'em up so they're just BELOW that line.

Once they're BELOW that line, they AREN'T too big to fail, so they ain't protected from nothing. They FAIL. It's FINE with me.

excon

If the SEC enforced the rules and regulations then these banks could not have done these things that brought the system down. Kind of like the immigration laws that are not enforced. Aren't Paulson and Rubin ex- Goldman Sach's employees? Didn't Obama get close to $900,000 from GMS during the election campaign? Is he going to give the money back with interest?


G&P


G&P

First of all, where's the line and second of all that doesn't change the premise of everyone wanting to be big enough to be protected from risk.

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Originally Posted by inthebox

If the SEC enforced the rules and regulations then these banks could not have done these things that brought the system down.

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Hello again, in:

I don't disagree at all. But, how much regulation are you going to do when you come from a belief system that tells you that government IS the PROBLEM, and free markets are better?

I believe in a strong cop on the beat. I don't believe the cop should be an ex bad guy, or wants a job as a bad guy when his shtick as a cop is over.

excon

You see ;that line is in the ether . There is no defining line that can be proven because there has never been a case where the failure of a company ;let alone an industry had "brought the country down" .
The chicken-little act by former Sachs official Hank Paulson was more a matter of self interest I believe .

The biggest shame of it was that he convinced McCain and Boehner to go along.
But there was a significant block of Republicans like Thad McCotter that saw threw the charade.

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Originally Posted by speechlesstx

First of all, where's the line and second of all that doesn't change the premise of everyone wanting to be big enough to be protected from risk.

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Hello again, Steve:

I guess it IS rocket science. Like I said, I don't know where that line is. But, I ain't a lawmaker. Once they determine WHERE that line is, they pass a law breaking up the banks to just under that size.

Here's how we can come up with a number. Take what the Democrats say, and double it. Don't worry, the Dems'll cave. They LOVE bipartisanship

Now, I agree with you. There's going to be a mad scramble for corporations to get OVER that line, because they'll know they'll be bailed out... But, if there's a COP on the beat enforcing the law, there won't BE any corporations OVER that line. As a dedicated right winger, you know about that law enforcement stuff, don't you?

excon

You don't believe the cop should be an ex bad guy, huh? Shame the White House doesn't believe that.

http://home.comcast.net/~lcmgroupe/2...hite-House.jpg

Let's start with Fannie and Freddie. Those are the only banks I know of that have enough clout to bring us down. They are so interconnected with the government they are almost one in the same. Their execs come right out of the ranks of the political class so they can get their payday for being public servants .

Now that I think about it ;it was only through the regulatory process that many of these banks were able to grow in the 1st place.
The guarding against systemic risk by securtization was completely a political calculation... a reward for going along with government mandates to offer risky loans.
I say if there weren't the type of regulations imposed /awarded then the banks most likely would not have grown to the extent they did to begin with. You cannot have a free market when risk is not a major component of decision making ;and the government did everything they could to cushion the risks in exchange for the banks being the lead agencies in their social engineering .

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Originally Posted by tomder55

I say if there weren't the type of regulations imposed /awarded then the banks most likely would not have grown to the extent they did to begin with.

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Hello again, tom:

Let me see if I understand you. If they were FREE to do whatever they chose to do, they WOULDN'T have grown that big?? But, BECAUSE they were OVER REGULATED, THAT is what caused them to get so big.

Really? Is THAT what you'd like me to believe?? Guess what?

excon

You are one coflicted dude. You switch back and forth between regulate the hell out of them to caveat emptor . Or is it caveat emptor for me but not for thee ?

Indeed the whole real estate bubble that caused the crisis was the result of social engineering schemes by clowns like Andrew Cuomo (then at HUD) with the help of Fannie and Freddie .

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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.

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Who said that ? Not FOX News ,this quote is from the ultra-liberal Village Voice.
Andrew Cuomo and Fannie and Freddie - Page 1 - News - New York - Village Voice

It describes a system that demanded the banks do the very risky things everyone now condemns as part and partial with an environment of deregulation. In fact it was over regulation that caused the crisis.

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Originally Posted by tomder55

Indeed the whole real estate bubble that caused the crisis was the result of social engineering schemes by clowns like Andrew Cuomo (then at HUD) with the help of Fannie and Freddie .

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Hello again, tom:

Yeah, those are the right wing talking points. They're just not true. Yes, Fannie and Freddie were mismanaged. But saying THEY brought the system down, is like saying mismanaging the gift wrapping department would bring down Nordstroms.

The bubble was caused by banks taking worthless mortgages, repackaging them into derivatives nobody understood, and then sold them to unwitting investors, like pension funds.

excon

Yes you are right in that if the banks could not bundle the crap then they would've collpased to the size you contend they should be because they would be operating otherwise at a government imposed loss. They had no choice short of losing their shirts but to create the derivative instrument once the government imposed those conditions on them.

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Originally Posted by tomder55

They had no choice short of losing their shirts but to create the derivitive instrument once the government imposed those conditions on them.

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Hello again, tom:

Those are more right wing talking points. If Fannie and Freddie went bankrupt under the pressure of the Democrats, there would have been nothing more than a ripple in the economy. The FDIC would have paid off some stuff, and NOTHING more would have happened.

Besides, there were MANY community banks who CHOSE not to participate and didn't lose their shirts. The banks that DID lose their shirts didn't understand the collateralized debt obligations they themselves, created and got stuck with them in THEIR portfolios. They created them, sold them, and bet on them simply because of the fees they generated.

When THEY failed, we either propped them up, or we'da gone down the tubes with them.

excon