Why Is Anyone Listening To Barney Frank Anymore?

Posted by Equity Private, Jan 09, 2009, 12:36pm

Barney Frank (Winner Of The DealBreaker Prize For Greatest Single Contribution To The Crash Of 2008) is yammering to reporters over at the Rayburn Building on new TARP requirements he is pushing through.

Retroactive executive compensation, and pre-legislative approval for use of funds is right up front. Requirements that aircraft be "divested," that top 25 employees get no bonuses, and the like, unsurprising really, which is quite sad given how radically retroactive and draconian the measures are.

Will no one rid us of this meddlesome congressman?

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Tags: Barney Frank

Comments

1

Posted by cy, Jan 09, 2009 12:45PM

The voters of Mass's 4 district certainly could. Unfortunately, their heads are so far up their asses (much like everyone else's) that it's unlikely they'll be of any help. But don't worry, Barney is going to "solve" this "crisis" by making people give up their jets. No doubt that will help the situation immensely.

2

Posted by Equity Private, Jan 09, 2009 12:45PM

That's not strictly relevant. His sexuality is a non-issue (so long as he doesn't use the House offices to organize call-boy services again).

3

Posted by guest, Jan 09, 2009 12:51PM

OMG, you just deleted my hate crime.

4

Posted by guest, Jan 09, 2009 12:54PM

It becomes increasingly obvious the elected officials will not be very helpful in a once in a centuiry situation?

5

Posted by guest, Jan 09, 2009 12:55PM

and they say ignorant homophobes like @3 are slow.

6

Posted by guest, Jan 09, 2009 12:55PM

Nowhere is there a greater concentration of worthless people in the United States than in the halls of Congress.

Where's John Galt when you need him.

7

Posted by guest, Jan 09, 2009 12:56PM

How great is it to be employee #26?

8

Posted by guest, Jan 09, 2009 12:57PM

@3- So funny. If you're a female, then I want to date you.

9

Posted by guest, Jan 09, 2009 12:57PM

We're never going to be rid of him. For some ungodly reason, his constituents think he's the bee's knees.

10

Posted by guest, Jan 09, 2009 12:57PM

@5,

Not a homophobe, I absolutely love the lesbos. Blow me.

Love Always,

Formerly @1

11

Posted by guest, Jan 09, 2009 1:01PM

@8- you have a pretty low standard for what counts as 'funny' (and a suitable date) i see. *so* funny? really?

@10- funny you should solicit a bj, as it often turns out that people who use the term you did in the now-deleted comment ("f@g") are closet cases who want nothing more than to be rammed by another dude.

12

Posted by Anal_yst, Jan 09, 2009 1:01PM

Is there a private jet ETF we can short?

13

Posted by guest, Jan 09, 2009 1:02PM

Let's not forget the sexual laison with Herb Moses, an employee of Fannie Mae while Frank was supposdly overseeing the agency. Let the cracks begin - ha.

14

Posted by guest, Jan 09, 2009 1:04PM

@12 nerd

15

Posted by Investorcluzo, Jan 09, 2009 1:06PM

@Anal_yst - call your rep at barclays. I'm hoping proshares will come up with an ultra short version.

16

Posted by guest, Jan 09, 2009 1:09PM

@11 - Soooo funny that you do not appreciate, as I do, the attempts at humor by a pop culture junkie. Namely, me. Yeah, I laugh a lot and have a pretty easy going disposition. Man, I was I were uptight like you.

17

Posted by guest, Jan 09, 2009 1:14PM

@6, are you Alan Greenspan? Haven't you learned anything, maestro?

EP, other than setting a real bad precedent, heh, heh, what's wrong with a little retroactive mugging of the John Galt fans who got us in this fix? They had their fun, babes, round-the-world rides, etc...how is this so different than the admittedly quite delicious fun of beating up on the Noels day after deserving day?

18

Posted by guest, Jan 09, 2009 1:14PM

There is so much to hate from this sanctimonious prick why even go for the gay knock. This situation is Barney's real wet dream. First you get the power,then you get the money, then the little boys...Go Barney Montana


19

Posted by guest, Jan 09, 2009 1:16PM

Who is John Galt?

20

Posted by guest, Jan 09, 2009 1:16PM

11 here - Last sentence should read, "Man, I wish I was uptight like you."

21

Posted by guest, Jan 09, 2009 1:16PM

@19,

Now you've gone too far.

Formerly @1

22

Posted by guest, Jan 09, 2009 1:18PM

Who is John Galt?

23

Posted by guest, Jan 09, 2009 1:19PM

people that say barney frank is gay, probably also think ricky martin is gay.

24

Posted by guest, Jan 09, 2009 1:24PM

You guys are all so silly

25

Posted by guest, Jan 09, 2009 1:37PM

I hope Barney catches that wascally wabbit some day....

26

Posted by guest, Jan 09, 2009 1:41PM

Will no one rid us of this meddlesome EP?

27

Posted by chernevik, Jan 09, 2009 1:41PM

Huh?

1. People listen to Frank because he's about to rewrite the financial rules for everyone. Probably the auto industry, too. Also, the man is wrong, and irritating as hell, but he's @#$%$ brilliant, and very effective. It's not like we're talking about Harry Reid or Nancy Pelosi.

2. Maybe the GSEs are the root, and maybe Frank was their best buddy. But Paulson multiplied the damage beyond the already inevitable. Anything Frank has done, Paulson has made worse.

I'm your greatest admirer, Duchess, but this isn't your best work.

28

Posted by guest, Jan 09, 2009 1:42PM

Ayn Rand was just telling the boys what they wanted to hear. Funny how many people never never got in on the joke.

J Galt

29

Posted by guest, Jan 09, 2009 1:48PM

I'm with @22......who is John Galt?

30

Posted by guest, Jan 09, 2009 1:50PM

Who listened to him in the first place?

31

Posted by guest, Jan 09, 2009 1:52PM

I've always thought that the Randian stuff is fine in the abstract only. It applies to and benefits only a few people in the tails of the distribution. Not a way for any complex society to operate. (Could work maybe on Mustique though). Which is why I snicker whenever I see it revered, like here or in the article in today's WSJ, courtesy of a former Cato Institute flak.

32

Posted by cy, Jan 09, 2009 1:52PM

Hey 17-

How exactly is a system in which the government confiscates and redirects aprroximately 30% (that's conservative) of our national output, winds up buying more than 50% of all mortgages, makes countrywide sign an agreement saying they will use "proactive, creative efforts" to extend homeownership to low-income americans, perpetuates 15 federal departments (transportation, energy, agricultre, etc) who's only purpose is to intefere in private business in any way a system set up by "john galt fans?"

It is the people who continue to perpetuate the myth that this crisis is a product of free market economics that will eventually get us in far worse trouble.

33

Posted by guest, Jan 09, 2009 1:53PM

I'm with 27

Frankie there is brilliant. The TARP should have clauses that prevent executives from abusing the TARP program at the cost of shareholders. Limits on comp is an effective way to do it by aligning incentives.

EP surely you should have seen that. As a long time reader, I'm disappointed.

34

Posted by guest, Jan 09, 2009 1:55PM

I agree with 27. Frank definitely contributed to the problems, but in no way is he "the greatest single contributor" to the crash of 2008. There are so many factors that contributed to this that blaming Frank is the equivalent of blaming Bush or Bush blaming greed.

Anyone who thinks there was "one single cause" has very little understanding of what happened.

35

Posted by guest, Jan 09, 2009 1:57PM

I'm with 27

Frankie there is brilliant. The TARP should have clauses that prevent executives from abusing the TARP program at the cost of shareholders. Limits on comp is an effective way to do it by aligning incentives.

EP surely you should have seen that. As a long time reader, I'm disappointed.

36

Posted by guest, Jan 09, 2009 1:58PM

@32 - golf-clap for you. Bravo!

37

Posted by guest, Jan 09, 2009 1:58PM

barney's a lot of things, but to decribe him as brilliant may be pushing it. barney is a first and foremost an opportunist, 2d a social engineer and 3d a politician willing to play with his record (snicker). at present, we are not faced with a general financial depression, we are faced with a rich person's financial depression and barney is making hay, so to speak. he appears to be saying that the holes in the legislation aren't holes as they provided for oversight which oversight alerted him to the need for the retroactive measures. wow. (logicians may weep here).

38

Posted by cy, Jan 09, 2009 1:58PM

31-

How should a "complex society" operate? With a top-down "planner" who will keep everyone's best interests at heart and decide the best allocation of resources?

If it doesn't work, shouldn't countries with large gov't intervention be economic powerhouses? And countries with low intervention be economic backwaters? Is this how the real world looks to you?

39

Posted by guest, Jan 09, 2009 2:01PM

@17

Well, as you probably know, EP is the greatest fan of Rand. For her, Greenspan never did anything wrong. It was all Frank's fault. Absurd, but that's EP for you.

40

Posted by guest, Jan 09, 2009 2:02PM

The spread of evil is the symptom of a vacuum. whenever evil wins, it is only by default: by the moral failure of those who evade the fact that there can be no compromise on basic principles.

41

Posted by guest, Jan 09, 2009 2:05PM

32 If you're so angry, then why don't you just go live somewhere where there's no government? Say in the woods of VT. Problem solved. Except that you'll have to pump your own water, clear your own roads. If you want to live in civil society, there needs to be a referee.

Oh and that 30% number: if it was lower, I guarantee everything you buy will be that much more expensive. The money taken and redistribeted, as you call it, is a drag on the economy only if it could be better mobilized privately(enter John Galt). No evidence that thats true: see Blackwater (defense), Whittle (education). The method that you Randians love to showcase is the success of parochial school education and faith based welfare programs, such as the Salvation Army. You never admit though that those places pay their people slave wages, relying on their community spirit to do the job with a smile and for nothing.

42

Posted by guest, Jan 09, 2009 2:09PM

34 This "Frank is the problem" story is getting a lot of traction from the Bush rehabilitation project. As demonstrated by Rove's story in WSJ yesterday.

43

Posted by guest, Jan 09, 2009 2:14PM

haven't read a word of this thread but retroactive comp discussion should be interpreted as an attempt to re-estalish moral hazard. the guy is probably a genius, but gay like an animal (not that there's anything wrong with that)

44

Posted by guest, Jan 09, 2009 2:14PM

@42 Frank IS the problem.

45

Posted by cy, Jan 09, 2009 2:19PM

41-

For the record, I consider moving to Hong Kong or Singapore every time I turn on the TV and see someone such as yourself telling us that the goverment can solve all our problems (and refusing to believe that the government causes any).

No one ever said anything about living in a world with no goverment. A goverment is needed to protect its citzens from theft by force or fraud, to enforce property rights, and as a mechanism for defense from foriegn aggression. These functions are absolutely vital, and there is no "cato institute flak" who would argue otherwise. The rest of it needs to go.

Think about how many of the things you consume came through private markets, your food (mainly), your housing, the technology which you're currently using, basically all entertainment, your car, etc etc. Do you really think your quality of life would be better if the gov't was allowed to run all those things?

Also, I can GUARENTEE that your theory about the 30% actually making things cheaper is 100% wrong. If this were the case, wouldn't the gov't confiscating and redirecting 100% of output make things the cheapest?? Guess what, that's been tried and it failed abysmally. Do you really think you'd have a better ipod (and cheaper) if the gov't were in charge of manufacturing mp3 players?

46

Posted by guest, Jan 09, 2009 2:28PM

Huzzah for bottom performers!

47

Posted by chernevik, Jan 09, 2009 2:29PM

41, you confuse average returns with marginal. For example, roads. Economic return on interstate highways? Astronomical. Return on congessional pork? Surely lower, possibly negative. By constantly adding the next increment of government, each justified by analogy to particular projects successful by their very necessity, you gradually lower the overall productivity of the economy.

48

Posted by guest, Jan 09, 2009 2:29PM

@45--

Hong Kong or Singapore? Are you on dope?

49

Posted by guest, Jan 09, 2009 2:44PM

Does Frank admit he is gay or does he not discuss it? He isn't the only person resonsibile for this mess but he supposed FM taking on more capital which was wrong.

Are there any men who have been in charge of an ibank who have been openly gay?It seems as though it's a homophobic culture.

50

Posted by guest, Jan 09, 2009 2:45PM

@45 -
No one is suggesting the government make all the ipods, you meatball. You equate any kind legislation or regulation with socialism. Big business can be just as malicious and onerous as big government. Two sides of the same coin.

51

Posted by Suits, Jan 09, 2009 2:46PM

12,
Avantair is publicly traded, and happens to be a shitty company as well. Shorting BRK to get to netjets is probably a poor idea.

52

Posted by guest, Jan 09, 2009 2:46PM

49 Richard Jenerette of DLJ - sort of an open secret. Didn't broadcast, but didn't hide it either.

53

Posted by guest, Jan 09, 2009 2:48PM

@45

There are private markets everywhere, but there's no such thing as a free market, and never has.

Hong Kong has a limited democracy ultimately controlled by the People's Liberation Army. Singapore is no better, there's no freedom of speech and the one party controls the government, a single-party state. Good luck on your move!

Why I'm not surprised that some libertarians are fascist at the core.

54

Posted by Equity Private, Jan 09, 2009 2:52PM

"Posted by guest, Jan 09, 2009 2:01PM

@17

Well, as you probably know, EP is the greatest fan of Rand. For her, Greenspan never did anything wrong. It was all Frank's fault. Absurd, but that's EP for you."

If you are going to take a stand on my absurdity, at least get my positions right. Your take on my view of Greenspan is about 100% wrong.

55

Posted by guest, Jan 09, 2009 2:52PM

49 Flip side: CFO of Ford Motors, admitted it but only after retirement. But then they called him back for a return engagement.

56

Posted by guest, Jan 09, 2009 2:53PM

as a side note, who did that clown get elected? his constituents are a bunch of idiots.

57

Posted by guest, Jan 09, 2009 2:54PM

Can someone substantiate how this crisis would be better off without Barney Frank? Can someone honestly say that without this government every single one of these banks would not have failed entirely? Keep dreaming.

It's fun to read people make half ass attempts to show this crisis as a government caused problem and not bank/free markets/capitalism/etc (take your pick) by tip toeing around some broad, esoteric market philosophy - as if defending the good name of capitalism.

Yes, limited regulation free markets is the best way forward and will create the biggest long term upside - that doesn't mean we aren't experiencing the full wrath of its downside now.

58

Posted by NotNasser, Jan 09, 2009 3:01PM

Okay, I agree. There's no more compelling reason to listen to Barney Frank than there would be if his last name were, say, "Fife," or "the-Dinosaur."

That said, though, I'm happy somebody is creating heat over this TARP nonsense. Look in today's FT, the Aline van Duyn column if you don't understand the problem.

The TARP was created to address one particular problem -- NOT that banks needed somebody to buy their friggin' equity, but that there were these toxic assets on their books.

Guess what? those assets are still there. What's the dealie with that? I was against TARP when it was before the House and Senate, but since our legislators did vote on and approve a certain approach to the crisis, the Treasury should have implemented that approach -- not an utterly different and more socialistic one under the same general label.

Whatev dudes.

59

Posted by guest, Jan 09, 2009 3:02PM

57 You might add that the system was such that an entire chain made big money: real estate agents, mortgage brokers, MBS packagers and salespeople. It was a great gig, that many wish was still going. For Wall Street to tsk tsk and blame BF is hilarious.

60

Posted by guest, Jan 09, 2009 3:06PM

@54

You don't post about Greenspan here. The last post I could find was back in October. Bess Levin has a lot more content on Greenspan than you.

This is what you said:

"Say what you like about him, Greenspan could move markets, even in a crisis, just by stuffing his briefcase a bit more than normal on his way to the Fed meeting. He was like Jobs to Apple."

http://dealbreaker.com/2008/10/when-i-was-your-age-wed-have-a.php

On the other hand you parrot Republican talking points to the letter, especially about the origins and causes of the housing bubble. Never read Greenspan in your posts about it.

61

Posted by guest, Jan 09, 2009 3:18PM

Those assets won't be there anymore now that the Fed has agreed to buy MBS - the people who will make lots of money from this are the asset managers including GS which isn't surprising.

Nobody will probably know the real reasons that they created TARP but I think banks were trying to take advantage of the crisis to buy rivals and they needed money to do that. They also needed money to pay bonuses and other expenses - they either lied to Paulson about what they were planning to do with the money or he was part of it.

62

Posted by Equity Private, Jan 09, 2009 3:24PM

"On the other hand you parrot Republican talking points to the letter, especially about the origins and causes of the housing bubble. Never read Greenspan in your posts about it."

I'm hardly Republican. I could care less about their "talking points" and I think most of their positions as a party are shameful. If I recite anything its the conveniently forgotten facts which drove this economy into the present ditch in which it is overturned.

If you are actually interested in my position on such things (and have the patience to read the material) you can find my views and the facts that form them here:

http://equityprivate.typepad.com/ep/2008/12/death-of-cook.html

63

Posted by chernevik, Jan 09, 2009 3:25PM

EP isn't far wrong.
-- The economy was unsustainably accelerated by wealth effects of artificially high housing prices.
-- Housing prices were inflated by the GSEs offering loans at rates that didn't reflect the risk.
-- No market examined the soundness of the GSE's assets or capital because all lenders assumed that the Feds would back them.

Et voila, credit boom, now followed by credit crunch.

Frank et al:
-- protected the GSEs from proper regulation of their capital,
-- tacitly assured markets the GSEs were government backed, and
-- insisted that the GSEs lend to low-income borrowers who were most risky (and least prepared to use the credit responsibly).

All of which lead to the credit and housing bubbles described above.

Maybe that's wrong, but if you don't understand it enough to discuss it, you're just spouting slogans.

64

Posted by guest, Jan 09, 2009 3:29PM

EP:

Too Websense'd, didn't read

65

Posted by Equity Private, Jan 09, 2009 3:38PM

"EP:

Too Websense'd, didn't read"

Cool, what am I classified as?

66

Posted by guest, Jan 09, 2009 3:39PM

@63 - "Housing prices were inflated by the GSEs offering loans at rates that didn't reflect the risk."

Really? I wasn't aware that the GSEs were loan originators?

It was the front lines that originated bad loans, not the GSEs. Did they purchase them? Yes, the GSE were chartered with the original intent to increase homeownership to medium and low income families. I am not exonerating them, but the diligence is supposed to be done upfront. There is inherent danger in that, the originators make the fee and pass the risk (in bulk) to the mostly unaware GSEs.

67

Posted by guest, Jan 09, 2009 3:42PM

@66 here again. Also, to assume that the primary reason home prices were inflated stemmed from the GSEs is just plain dumb.

68

Posted by guest, Jan 09, 2009 3:48PM

Hey EP, @17 here:
Did you perhaps mean to reply to @39? No matter, I just feel bad if you were offended by what was intended as gentle teasing (foreplay for geezers, you know) in the @17 remark.

At least it looks like one Ayn Randian is moving to Singapore, where they will happily show him all about the heavy hand of government. Truth is, cy, there are all sorts of ways govts mess things up. Here we had Randians masquerading as civil servants, destroying the credibility of the government you now so love to hate.

69

Posted by miami, Jan 09, 2009 3:49PM

Barney Frank is about as brilliant as Sebastian Bach is at socio-cultural commentary.

70

Posted by miami, Jan 09, 2009 4:04PM

Barney Frank is about as brilliant as Sebastian Bach is at socio-cultural commentary.

71

Posted by guest, Jan 09, 2009 4:08PM

@miami, make sure you pat yourself on the back for that, because no one else will.

72

Posted by chernevik, Jan 09, 2009 4:09PM

@60
This:
"Say what you like about him, Greenspan could move markets"
proves this:
"For her, Greenspan never did anything wrong"?

Recognition of a person's influence is not approval of how that person used that influence. If you could read what you type, you'd understand you've shown nothing.

Please have a smart person explain this to you, and, in future, find smarter liberals to parrot. Thank you.

73

Posted by Equity Private, Jan 09, 2009 4:12PM

"No matter, I just feel bad if you were offended by what was intended as gentle teasing (foreplay for geezers, you know) in the @17 remark."

I'm not really a Randian, other than my general appreciation for her description of the psychology behind collectivism, and how insidious it can be. Rand understood that perfectly.

74

Posted by miami, Jan 09, 2009 4:15PM

71 - OH NOEZ, you didn't like my comment!1!!!11 ZOMG

75

Posted by guest, Jan 09, 2009 4:18PM

@41

are you for real? you need a visit from wideclops

government is never the answer to any market problems...ever. their action only delays the inevitable. their inaction allows the market to work

76

Posted by cy, Jan 09, 2009 4:26PM

63-

Well put. You saved me fifteen minutes.

66-

Thought experiment. Some guy comes up to you and says he just made a loan, and that you should buy it. It's clear he gets a piece of the deal, and its very clear he wants no part of the credit risk. Do you buy it? If you don't, how long do you think this guy will continue to make these loans? To claim that the diligence should have been done on the front end, and not the back end, is ridiculous. Think of it from the mortgage broker's perspective- people want loans, other people are willing to provide the loans, and he get's a piece. Were I in that position, I'd be cranking them out full-time, and that's exactly what happened. Would you have done differently? Now, were the GSE's just a private business, they'd be out of business. Completely shut down. In order for the market to work, both the reward of profit AND the punishment of loss is needed.

50-

"Big business can be just as malicious and onerous as big government."

This is dead wrong. "Big business" cannot force me to do anything. If I don't like the business's products or services, I can simply use those of a competitor. If I am their employee, I can find another job. Gov't, on the other hand, does not work the same way. If I don't like what I'm getting for my money from the gov't, I get thrown in jail if I stop paying. Gov't can tell me that I must contribute 40% of my labor to their nonsense, what I can or can't do on my property, what I can charge someone renting one of my apartments, or what I pay my employees. Bill Gates can't force me to do anything.

53-

"Singapore is no better, there's no freedom of speech"

Oh really? My friend from college was a reporter in dow jones' singapore office for three years. There was never any censorship. This translates to "no free speech?"

67-

Another thing we haven't discussed is the GOV'T role in the money supply. I'm not a gold standard guy, but fed's mandate of price stability AND full employment must strike you as absurd. Also, again, if you don't think that the gov't buying over 50% of mortgage debt had anything to do with the housing run up you are delusional.

68-

"Truth is, cy, there are all sorts of ways govts mess things up."

I agree completely. This is why we need less of it. There is no such thing as a "randian civil servant" because civil servants don't have to pay the price when they're doing things inefficiently.

77

Posted by chernevik, Jan 09, 2009 4:26PM

@66

"I wasn't aware that the GSEs were loan originators?"

You're also unaware they published their underwriting requirements for their purchases. They even loaded these into laptop software so originators could check eligibility on-line and in real-time.

They bought so many loans that their guidelines were the industry standard. Since those purchases were funded with government guaranteed debt, no lender bothered to check their work. Their only possible check was the government that underwrote them -- and the government's "underwriting standard" explicitly emphasized the maximization of credit to low income constituents. Er, borrowers.

78

Posted by guest, Jan 09, 2009 4:57PM

EP, still can't take you seriously as you are an ANONYMOUS blogger. Maybe you really work in private equity. Then again, maybe you never changed out of your pajamas this morning. Maybe you work in private equity but STILL never changed out of your pajamas. I don't care either way but you should reveal your true identity.

Anonymous blogging is so 2005.

79

Posted by guest, Jan 09, 2009 5:21PM

if you think the people who voted for mr. frank are idiots, what do you call the 62,040,610 people who voted for Bush?

80

Posted by guest, Jan 09, 2009 5:29PM

@12/51 I thought i once ran into a roll-up of fixed wing flight services at smaller airports that was public, which are typically favored by the private jet set crowd. These guys typically make their money by marking up fuel significantly, by doing inspections of aircraft as per regs and through repairs and maintenance. All of these is going to plummet if pvt jets suffer so maybe best way to play.

81

Posted by guest, Jan 09, 2009 5:33PM

@76

Singapore freedom of speech and other political matters:

http://www.state.gov/g/drl/rls/hrrpt/2003/27788.htm

But since it's our own State Dept. assessment, you probably wouldn't believe it.

And here's breaking news from Singapore:

Singapore To Allow Political Films

By Zakaria Abdul Wahab

SINGAPORE, Jan 9 (Bernama) -- The Singapore government will soon liberalise the local film laws in phases to allow political parties to produce political films for the public.

However, only political films that were factual and objective, and did not dramatise or present a distorted picture would be allowed, according to Information, Communications and the Arts Minister Dr Lee Boon Yang, here Friday.

He said among the types of films that would be allowed when the Films Act had been amended were factual documentaries and footages, recordings of actual events, and biographies or autobiographies.

Lee said this when giving the government response on the recommendations made by the Advisory Council on the Impact of New Media on Society (AIMS) that was tasked by the government to study the implications of rapidly evolving new media technology on Singaporeans.

The minister also said the government would allow political parties and their candidates to use films allowed under the amended Films Act for internet election advertising during the election period.

He said such films could include those on their election candidates, campaign activities and election manifestos.

..... and so on -----


That is, self-censor or face the consequences. Your friend knows that very well.

82

Posted by guest, Jan 09, 2009 5:44PM

Since when has Greenspan been a libertarian? He's a political hack who signed off on plenty of atrocious Nixon and Ford ideas so he could be a playa.It may suits his purposes to to still have that canard floating about, but he's pure finger in the wind opportunist.He'll do what it takes so he can still sniff some DC jockstraps.

83

Posted by Equity Private, Jan 09, 2009 5:45PM

"I don't care either way but you should reveal your true identity."

I'll pass. Thanks.

84

Posted by guest, Jan 09, 2009 5:48PM

@Cy (76)
"Bill Gates cannot force me to do anything." There are numerous ways he can and does force you. Read the anti-trust settlement against MS. In theory you are correct, but the RW is a different place.

50

85

Posted by guest, Jan 09, 2009 5:55PM

@72

I'm @60.

Obviously you didn't get the point, EP has only mentioned Greenspan once in this forum, though it's her bully pulpit. The quote was just to show the only mention of Greenspan, while she spends endless posts blaming everyone who happens to be a liberal for everything that has gone wrong. The content of the quote is irrelevant. Her silence here is relevant. That she may have written somewhere else about Greenspan has nothing to do with what is posted in Dealbreaker.

Finally, your comment @63 shows how ignorant you are about the housing bubble and burst. There's plenty out there about the subject that is more objective than what you wrote, and you can go and search for yourself. I wouldn't waste my time here.

86

Posted by Equity Private, Jan 09, 2009 6:49PM

"The quote was just to show the only mention of Greenspan, while she spends endless posts blaming everyone who happens to be a liberal for everything that has gone wrong."

Amusing. You know absolutely nothing about my politics. By any standard you would care to measure on social issues, other than the wisdom of "Big Government" I'm a liberal. Your attempt to paint me as some sort of Republican sympathizer and Greenspan groupie depends on your rather serious mis-interpretation or outright fabrication of the facts, as does your apologist view of centrally controlled economies. Anyone dense enough to indict "free markets" for the current mess has:

1. No clue what free markets are.
2. No concept of what sort of centrally controlled economic pressures dominated the housing market.
3. No place commenting on matters distinctly over their head.
4. Little promise of ever extracting their head from their ass.

I invite you to gather your invented impressions of my "Republican" politics and my supposed scapegoating of "liberals" and insert them roughly into the most expedient orifice presently available on your body.

Also, have a nice weekend.

87

Posted by Anal_yst, Jan 09, 2009 7:25PM

Anyone else get turned on when EP lays the smack down on some poor stupid schmuck who dares cross her?

88

Posted by guest, Jan 09, 2009 7:39PM

EP - i wish i could fully respond with how much i disagree with the free market portion of your post but it'd just be obnoxiously long.

This crisis was caused by a number of products whose risks were not measured properly and companies who increased risk appetites faster than they could mitigate those risks. This was encouraged by favorable market conditions (partially due to blind optimism alone). The misconception that two parties entering an agreement on mutually favorable terms and not both get screwed was apparent on so many levels.

The housing market on so many levels lacked enough regulation. Would more regulation have caused thousands of other inefficiencies and slowed growth? Absolutely. But I cannot imagine how regulation ensuring proper due diligence was done toward home buyers and disallowing products enabling housing speculation for people of modest income to have lead to a crisis of this magnitude.

Free market preachers seem to suffer from the delusion that markets are motivated to work toward the benefit of the people rather than profits.

This isn't a declaration of anti capitalism, just a comment that the market's ability to 'work itself out' does not serve every stakeholders best interest.

89

Posted by guest, Jan 09, 2009 7:42PM

@86

Keep trying to reinvent yourself. It's amusing, you mythomaniac.

Have a nice weekend too.

-- 85
(An also-ran for winner Of The DealBreaker Prize For Greatest Single Contribution To The Crash Of 2008)

90

Posted by guest, Jan 09, 2009 8:03PM

The fun starts at 0:40. I can't imagine anyone having to work with this clown across the table. Totally incoherent.

http://www.youtube.com/watch?v=WXJTXEUeXP4

91

Posted by guest, Jan 09, 2009 8:04PM

Honestly...i miss john carney. his posts were much less 'gawker' and a lot more actual markets. This site has taken a dump since his departure. i think EP has it in her (evidenced by the HF post), but much like MTV's downfall she's guilty of giving the crowd too much of what they want.

Back to real reporting with brutal commentary.

92

Posted by guest, Jan 09, 2009 8:09PM

Is Greenspan considered a Republican or a Democrat? He has worked in both administrations but keeping interest rates too low did create this problem although that wasn't all of it.

The best thing this country could do is find a way to replace the Fed because they don't do what is best for taxpayers - they do what is best for the banks on their board including GS and JPM and I believe that they might not intentionally create a financial crisis but they want them to occur because it gives them a chance to take over rivals and competitors.

93

Posted by guest, Jan 09, 2009 9:29PM

92 - your last assertion is ridiculous considering NO US bank is gaining from this. None. Firms at the top already are risking their own existence to knock out sub par competitors? Read a book buddy.

94

Posted by cy, Jan 09, 2009 9:29PM

EP-

Well done.

84-

Please name one way Bill Gates can force me to do anything? Do I run windows and MS office on my computers? Yes. Have I been forced or coerced to do so? No. Could I use other software if I felt I was being overcharged by MS? Yes. Can gates take my property or labor from me without offering something I value in return? No. I look to you for an example of how he can infringe upon my rights.

Funny that you mention the microsoft anti-trust action. Let's review the facts. Microsoft was including its Internet Explorer application in its operating system at no charge. Netscape, et al, thought this was unfair and pressured the justice department to act. The anti trust division of justice is SUPPOSED to protect consumers from monopolistic pricing when one firm has enough market share to do so. Again, this is what anti-trust is SUPPOSED to do. In this case, microsoft was supplying a product for FREE. This seems to be a pretty good deal for consumers if you ask me. Netscape's argument was that microsoft could drive netscape out of business and then there'd be no one left to compete in the browser space and microsoft could THEN charge a monopolistic price. Is that what happened? No. Although convicted (and later partially overturned) microsoft never charged monopoly prices (or any prices!) for its web browser. The entire suit was an act of protectionism on behalf of netscape.

88-

Although your sentence is a bit murky I believe what you're trying to say in your third paragraph is that [there should have been regulation] "disallowing products enabling housing speculation for people of modest income." (Please correct me if i'm wrong)

It's interesting that after the fact you can say there should have been regulation preventing reckless speculation via creative finance. In fact, during the boom, your pal Barney Frank was doing exactly the OPPOSITE, brow-beating banks into lowering their lending standards, guaranteeing the principal and interest in low-income loans, and encouraging the development of creative financing so that low-income people could afford houses.

Look, I'm not trying to pin this whole thing on Frank. It's not like if he had never been born this whole thing could have been avoided. (Similarly, had Dick Fuld or Angelo Mozzilo or any other convenient scapegoat not been born we'd still be in the same place.) People respond to incentives--whether they are mortgage brokers, securitization i-bankers, or amateur real estate speculators doesn't matter. What I'm saying is that gov't created (and is still creating!) misaligned incentives that will ultimately ensure that this type of thing will keep happening. Our government was initially set up so it could be "run by crooks." Unfortunately, as we hand over more and more control of the purse strings to politicians and bureaucrats, we open ourselves up to the gov't misallocating more and more of our resources (even if the politicians are well-intentioned, which I believe most are). Blaming the mutually agreeable transactions of free people (which is what a free-market actually is) hurts not just "the rich" but the society as a whole.

95

Posted by guest, Jan 09, 2009 10:08PM

You're wrong - some banks are taking advantage of this crisis in ways people probably don't even realize yet. I'm not only referring to ibanks either. Although I enjoy insulting them, they have actually taken less money from taxpayers than other banks - they lied to Paulson and he wasn't even smart enough to realize it. If Paulson couldn't handle them, Geithner will be even worse. I wasn't saying banks intentionally created this crisis - I'm saying some people at banks take advantage of a crisis so that is why the Fed is bad for this country.

They're always doing what is best for banks and not taxpayers and that is wrong.

96

Posted by guest, Jan 09, 2009 10:21PM

@95 - tell me exactly how banks are doing this. you can't just make accusations like that and not back it up. (which is exactly what your doing)

88 here - @94 Make no mistake, low income lending standards so people making 40k could own 180k houses was not what brought our entire financial system to its knees - not remotely. You that. I know that. EP knows that. Lenders encouraging people with 60k salaries and no documentation to take on 500k houses, then purchase more houses with home equity loans on interest only mortgages was.

Lawyers, doctors and people from various respectable fields earning respectable incomes are defaulting. Jumbo mortgages in many areas have tanked. Show me where in CRA this is mentioned.

I have no idea what the second half of your last paragraph is talking about. What government incentives? What are they doing that ensures this happens? This is the ambiguous nether-region every 'free markets champion' seems to ends up in. Faith based economics I guess.

Your last sentence sums it up. Your not defending free markets based on its actual principles, but rather the ramifications of it blamed.

97

Posted by guest, Jan 09, 2009 10:27PM

...of it 'being' blamed.

98

Posted by guest, Jan 09, 2009 10:38PM

I'm not telling you more and I don't have incriminating evidence - I just think that congress wanted Fuld to testify so everyone thinks the bad people have been caught when nothing happens to the worst people and most of them aren't at ibanks although I enjoy insulting them more. I think they lied to Paulson and he didn't even realize it. Just wait until Geithner gets there.

Time for me to go now anyway.

99

Posted by guest, Jan 09, 2009 10:46PM

@98 - Exactly, you have zero evidence of any of this. nothing you said was remotely coherent. yes, please go away.

Last time I checked, most of the Lehman employees were not fans of him and blamed him for steering a sinking ship straight into the ground while turning down life vests (early merger opportunities).

Who are these worst people you speak of? Lied to Paulson about what?

This isn't a logic-less conspiracy theory message board.

100

Posted by guest, Jan 09, 2009 10:49PM

Wait, Barney's been talking about TARP? All I heard was "Fwa Fwa Fwa, Fwa Fwa Fwa Fwa..."

101

Posted by chernevik, Jan 09, 2009 11:19PM

@85:
"your comment @63 shows how ignorant you are about the housing bubble and burst. There's plenty out there about the subject that is more objective than what you wrote, and you can go and search for yourself. I wouldn't waste my time here."

Translation:
"I can't make arguments for myself.
"I can't even sort my sources to know which should argue for me."

I can't imagine a _better_ use of _your_ time than studying the issues you've chosen to pick a fight over.

102

Posted by NotNasser, Jan 10, 2009 2:19AM

Yeah. Singapore and HK. I've given some thought to such destinations myself.

103

Posted by throwspoop, Jan 10, 2009 3:22AM

If _b_arney is the best of the worst, why is he still in office? Where have we failed?

104

Posted by guest, Jan 10, 2009 10:11AM

buying: ep
shorting: bf and us economy

105

Posted by cy, Jan 10, 2009 10:30AM

96-

Agreed. I think most of the damage was done by moderate to high income people "speculating" on real estate. The funny thing is that these are exactly the people who qualified for PRIME loans. Let's remind ourselves what a prime loan is-- it's a loan that meets certain qualifications so that it can be packaged and sold to FRM/FNM which are backed by....(one guess!)... the US government!

So let's look at the logic...

Assumption A (this comes from you)-
This crisis was precipitated by middle to upper class people "speculating" on real estate.

Assumption B- The people mentioned above got the vast majority of their financing from FNM/FRM, which was guaranteed by the US government.

Conclusion- This crisis could not have happened as it did without the gigantic presence of the US government. Calling this a "failure of the free market" is inaccurate.


Regarding incentives, if you cannot see how FRM/FNM providing below-market mortgage financing because they can borrow at below-market rates (because of the gov't guarantee) creates INCENTIVES for real estate speculation than I don't know if i can help you. There is nothing "ambiguous" of "faith-based" about it. When you lend loosely, people are going to purchase recklessly. As an example of another government program providing poor real estate incentives, I'd suggest you read about our National Flood Insurnace Program, that provides below market insurance to people who live along the coasts. Here is some further reading if you're interested...

http://abcnews.go.com/business/insurance/story?id=94181


106

Posted by guest, Jan 10, 2009 2:37PM

All roads lead to Fan/Fred. Sure, Wall Street was greedy. But Wall Street is always greedy. The difference is usually the taxpayer doesn’t care. Wall Street was greedy with Enron, but when Enron blew up the taxpayer didn’t care because no one expected the government to guarantee the value of energy trades. Wall Street was greedy with the dot-coms, but when that bubble burst the taxpayer didn’t care because no one expected the government to guarantee the value of Pets.com. But with housing, it’s as though the taxpayer handed over the national credit card to Wall Street and said “here you go, go nuts.” The problem is not free markets. The problem is we gave Wall Street our credit card.

Housing is the single most socialized sector of the economy. Government is heavily involved in healthcare and higher education, with predictable results on spiraling costs. But even in those areas government is paying expenses. In housing, you have government guaranteeing ASSET VALUES for half the mortgages in the country for Christ’s sake. You call that a free market?

Unfortunately, both parties were on the Fan/Fred gravy train. But more than anyone else Barney Frank has been their protector. So yes, EP is right…Barney Frank is a truly horrible person who arguably deserves more blame than anyone else.

107

Posted by guest, Jan 10, 2009 3:32PM

@105 - your assumption B is actually completely wrong, so is your conclusion, so is your last paragraph. Speculative buyers do not qualify as Prime borrowers. FRM/FNM were not guaranteed by the government. It almost seems like your implying a smaller government is crisis free, no recessions. No economic theory supports this remotely.

This was still a largely Sub-Prime issue. Sub Prime does not mean you were poor, it meant you had bad credit which plenty of rich people have. You do not get prime rates for buying second and third houses. Banks gladly raised their risk profiles without any hand forcing them too. Thus became Predatory Lending Practices, Interest only ARMs with zero down payments, etc. Government did not encourage this.

Your explanation uses another commonly used lapse of hindsight - this mess was much larger than those GSEs. Bear and Countrywide went under long before they did. There are no investment banks left in the US. Leverage, CDOs and Credit Default Swaps amplified this a 100 fold and gave lenders the financial system the ability to perpetuate this - not government. Without government, everyone of those ibanks would be gone. Period.

108

Posted by guest, Jan 10, 2009 3:37PM

@106, all roads do not lead to FNM/FRM. You talk as if the taxpayer was not benefiting in all of this from the get go. "Oh, the poor taxpayer" Most of your argument serves the post crisis handling, not the causes. Like I'm consistently reading, you have not actually presented any real evidence of anything, just your own governmental cynicism. (though rightfully so)

109

Posted by chernevik, Jan 10, 2009 3:38PM

I expect liberal Democratic Congressmen to ignore/overlook the economic consequences of their market distortions. That's what they're all about.

I do not expect a Republican Treasury Secretary, from GS, to ignore/overlook the implications of rewriting the "too big to fail" rules in the middle of the game. Or to argue for unlimited government financial authority so he can "do something". Or to arrive at a financial crisis without any intellectual or institutional preparation. He has taken a bad situation and made it much worse, both in its magnitude and its implications for future policy.

110

Posted by guest, Jan 10, 2009 3:39PM

Fed Shrugged as Subprime Crisis Spread

http://www.nytimes.com/2007/12/18/business/18subprime.html?pagewanted=2&_r=1


To give you a taste:

"Mr. Greenspan and other Fed officials repeatedly dismissed warnings about a speculative bubble in housing prices. In December 2004, the New York Fed issued a report bluntly declaring that “no bubble exists.” Mr. Greenspan predicted several times — incorrectly, it turned out — that housing declines would be local but almost certainly not nationwide.

The Fed was hardly alone in not pressing to clean up the mortgage industry. When states like Georgia and North Carolina started to pass tougher laws against abusive lending practices, the Office of the Comptroller of the Currency successfully prohibited them from investigating local subsidiaries of nationally chartered banks.

Virtually every federal bank regulator was loathe to impose speed limits on a booming industry. But the regulators were also fragmented among an alphabet soup of agencies with splintered and confusing jurisdictions. Perhaps the biggest complication was that many mortgage lenders did not fall under any agency’s authority at all."

111

Posted by guest, Jan 10, 2009 3:41PM

@109 - that's because your an assclown.

112

Posted by guest, Jan 10, 2009 3:47PM

GSE'S WERE INVOLVED WITH NON-CONFORMING LOANS. This is a massive segment of this crisis.

@110 - thanks for the cut and paste. keep up the good work and not taking th time to summarize or opine.

Another issue that is driving me nuts is blaming so many people for not predicting this would become as bad as it did. Yes, there were people who 'predicted this' but they were few and far between. Many of them predicted massive crashes in the past that never happened.

If the moon crashes into the earth tomorrow, there will be people who 'predicted it'. Thats not to discredit some who did see this crash through reasonable analysis, but everyone here is taking hindsight for granted. All of you got killed in the market.

113

Posted by guest, Jan 10, 2009 3:49PM

...i'm sorry, gse's were NOT involved with non-conforming loans...

114

Posted by guest, Jan 10, 2009 3:59PM

For a discussion of the role of the GSEs in the housing crisis, read Tanta's explanation that puts it in the correct perspective. You may learn something after all.

http://www.calculatedriskblog.com/2008/07/krugman-on-gses.html

Here is how it starts:

"Paul Krugman has a new column on Fannie and Freddie which I think is important. I'm going to take issue with a fair amount of it, but not with the basic argument that the uproar over the GSEs is "overblown." That, I think is a point worth making."

115

Posted by guest, Jan 10, 2009 4:04PM

Something I think no one here seems to being taking into account is the politics. Barney Frank, much like every other politician from every party, is acting on behalf of constituents; taxpayers. People like him are elected to these positions by the taxpayers and expected to legislate based on their interests.

Barney Frank is not a solo warrior out on a mission from God - he's on a mission from the taxpayer.

You guys have been great, i'm done here.

love,

57, 88, 91, 93, 96, 99, 107, 108, 111, 112, 113

116

Posted by Anal_yst, Jan 10, 2009 6:03PM

@115

1. Register already, sheesh.

2. No, you are wrong. Barney Frank, like every politician, is elected because people THINK (incorrectly) he gives half a flying fuck about doing what's good for his constituents.

News flash: He doesn't, or at least, its no where near his primary concern.

He is on a mission to keep his ass in office/power, just like every other politician. I'm actually (surprisingly?) not so cynical to think he's completely self-absorbed, that is, I'm sure he does occasionally try to do good by his constituents, but to presume that any politician is interested primarily in anything other than keeping themselves in power is retarded.

117

Posted by guest, Jan 10, 2009 8:09PM

That members of the finance community would be concerned that congress will change rules in ways that make them less profitable is of no surprise. That they would advance the canard that a congressman who spent 12 of the last 14 years in the minority is silly but also not surprising. That a critical blog like dealbreaker would advance this nonsense is shocking and an insult to your serious readers.

To suggest that Barney Frank is somehow even a major contributor - let alone the biggest - to the financial mess is too silly to dignify. Congressman Frank was a ranking minority committee member from 1994 through 2006. Exactly how did he wield so much power that he caused this mess? After all, a center piece of the Bush economic agenda was the "ownership society" which explicitly pushed for greater home ownership.

All of this begs the real issue. The push to expand home ownership was, at best, a small piece of the issue. Fannie and Freddie and CRA - as an actual, quantitative fact - were small pieces of the sub-prime problem. Sub-prime, in turn, appears to be a small piece of our credit mess which extends to leveraged loans, conforming mortgages, credit cards and other forms of debt. Our entire credit markets wouldn't be blowing up if it was only loans to a marginal number of poor people who were the cause.

What is it that Barney Frank has suggested that you find so offensive? What is he wrong about? A bit of humor in this crisis is useful; advancing canards like this is not.


118

Posted by guest, Jan 10, 2009 9:21PM

@115 i kind of wish it was barney and not bella who signed out this year

119

Posted by guest, Jan 11, 2009 1:17PM

1)BF advocated that housing opportunities be extended to those with poor credit, and now he claims otherwise. At the time it was good politically and so Repubs and Dems rode the gravy train. This was even after they were told extending credit in this fashion was a bad idea.

2)Meanwhile, Wall Street wanted to make money from the housing bubble, but miscalculated the risks.

3)Therefore, Dems and Repubs are the assholes who let this happen, and Wall Street companies just had dumbasses in charge. Unless it's a crime to make bad business decisions I'd say they're off the hook.

4) If you don't like how Wall Street is connected to the overall economy then move to Cuba where the non-Wall Street method is in play, oh wait, it's economy is 100x worse than ours.

5) Capitalism has cycles. Don't worry, the economy will go up again and then you'll be able to be socialist, drink your sbux, buy organic and get a job after majoring in english/art/history all at the same time.

120

Posted by guest, Jan 11, 2009 2:44PM

@119

On your point #3 I say HA!

First, a lot of money was made in this fiasco. Follow the money.

Second, Wall Street is now insolvent and is depending on government handouts daily. Therefore the tax payers are on the hook while Wall Street isn't?

You must like con men.

121

Posted by guest, Jan 11, 2009 3:49PM

So now any one that thinks that there should re regulation in capital markets is a socialist who should go live in Cuba?

122

Posted by guest, Jan 12, 2009 1:46PM

@107:
"Leverage, CDOs and Credit Default Swaps amplified this a 100 fold..." I'm surprised it took so long, but finally someone hit the nail on the head. BF was totally wrong about a lot of things, but was no more than a bit player in this whole affair.

123

Posted by guest, Jan 12, 2009 9:59PM

Too degenerate homosexual-ish, didn't read.

124

Posted by guest, Jan 13, 2009 11:53AM

Can't we just hang Barney Fishlips Frank by the neck until dead and move on?

125

Posted by guest, Jan 15, 2009 12:49PM

Because he's always got great interviews such as this.
http://www.youtube.com/watch?v=m54bAfxgYPw

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