Mark Wenzel_

The Credit Bubble: Deregulation Gone Wild

easyed says...

"Carter & the Donkey Congress forced Financial Co.'s to make loans to people in spite of poor credit history."

Good point. Both sides of the aisle were aboard for this though, and the idea is not without merit, i.e. helping the less advantageous. My belief though, is that these types of initiatives make it even more imperative that the regulators are both diligent and empowered to regulate. Appointing an idealogue like Greenspan to chairman of the Fed, and then having both sides of the aisle reappoint him seems to me a bit like appointing an athiest to head a church...doesn't make any sense (I'm not at all commenting on Mr. Greenspan's religious beliefs, just simply making an analogy). How about a game of "who said that";

"And so what are the barriers that we can deal with here in Washington? Well, probably the single barrier to first-time homeownership is high down payments. "

"We want 5.5 million more homeowners by..."

"I've asked Congress to fully fund an American Dream down payment fund which will help a low-income family to qualify to buy"

"I called upon the private sector to help us and help the home buyers. We need more capital in the private markets for first-time, low-income buyers"

...George W. Bush June, 2002

www.whitehouse.gov/new...

The Credit Bubble: Deregulation Gone Wild

Mrtaxx, Sorry if I didn't make it clear enough!...I agree with what you say...

"So it's suggested that people, mortgage co.'s and banks etc. who may have commited fraud by enhancing their income on mortgage applications and doing whatever other shnanagins they did, should get away with it, get great mortgage rates and all the other American taxpayers should pay for it. Now that's simply wrong"

Also, the quote that you mention in your response is from a bank chief executive (see above). I was using it as an example of what the deregulation that the banks fought so hard for has resulted in for them.

As for the answers, it looks probable that some sort of bailout will occur. If so, I'm just suggesting that whether they believe it or not, some sort of checks and balances on investment banks in terms of standardization, increased transparency, capital requirements, etc. as well as some increased diligence in enforcing existing regulations (fed choosing to basically ignore mortgage shenanigans) at all banks will help everybody, taxpayers and the banking system.

U.S. Government: World's Biggest Investment Bank?

Thanks for comments all! Apologize for delay on responding. Cheesecake, here is link (www.newyorkfed.org/mar...) to fed website which spells out that "investment grade corporate securities, municipal securities, mortgage-backed securities, and asset-backed securities" will be accepted." Also, follow the link above the Lehman CFO's quotes. She directly states that BBB- and above will be accepted.