There's also news that UBS is slated to acknowledge another writedown of $15-$18 billion dollars, in addition to the $18 billion above. As Krugman said, a Trillion here, a Trillion there, pretty soon you're talking about real money.

When an Empire is in decline, the carrion feeder's numbers increase. The Empires leaders begin doing the opposite of everything needed to maintain the Empire's health.

Once the Empire is weakened, it can no longer fend off the scavengers and the carrion feeders, and more and more politicians turn to feast on the dying beast. After all,

Is there any doubt that we're in that state now?

Let us also recall that when Flim-Flam Gramm ran for President, it was none other than John McCain who became his election chairman.
Loyalty over competence is a Repug tradition, just look what loyalty has brought over the last seven years.

John McStupid openly admits he "doesn’t really understand economics" ; what is with the horseshit GOP that they always manage to find the candidate who least deserves the nomination , let alone the presidency itself ?

Unlike McCain, Obama does seem to know something about economics.

The idea of President McCain scares the hell out of me. Meanwhile the media is all a whirl about Obama's bowling score. As far as the media is concerned the economy of our country was yesterday's news. I guess they think the big speech yesterday cleared everything up.

If McInsane is elected, we can kiss the middle class good-bye. The average American has suffered under Georgie's policies. The baby-boomers are retiring and social security and medicare will long be gone before I or my peers can benefit from them. We need sanity now.

UBS is going to write-down another $19.5 BILLION (for 1st quarter '08) after $18 BILLION last year!

Wow, watching Morning Joe, the breaking news is about the inquest of Princess Di. Oh, and Reverend Wright. No news about Iraq or Afghanistan. You would think there isn't a war or wars going on would you?

Al Queda denies conspiring with U.S. Government to bring down WTC.
They are pissed that the theorist are trying to steal away the credit.

(figured you could all use a break from reality for a couple of minutes)

Patty D. @ 18:

pissed of patricia, your right. I barely watch MSM anymore. I listen to c-span and tune in every hour or so. I can only handle so much of Hillary and Obama. MSM is becoming a farce.

Becoming?

pissed off patricia @ 16:

Patty D. @ 15:

Wow, watching Morning Joe, the breaking news is about the inquest of Princess Di. Oh, and Reverend Wright. No news about Iraq or Afghanistan. You would think there isn't a war or wars going on would you?

I can barely watch that show any longer. If you see the first fifteen minutes you have pretty much seen the whole show. Joe has become intolerable. Rendell was on talking about Florida and he did not have all the facts or else he failed to include them. After that, I couldn't take any more.

POP, I just finished reading "A Thousand Splendid Suns" (same Author as Kite Runner).
This book really gives a great perspective on how the whole thing started with the downfall of the USSR and then step by step to where we are now, by following the lives of a few people in Afghanistan. great book.

Touche! Bangkok Bob.

ysbaddaden @ 24:

♣Bangkok Bob♠ @ 17:

Al Queda denies conspiring with U.S. Government to bring down WTC.
They are pissed that the theorist are trying to steal away the credit.

(figured you could all use a break from reality for a couple of minutes)

I'm always on break.

Well, I never drink on Wednesday, so I get a chance to roam the Internet with a clear mind for a change. LOL

Bush and Cheney = "the new Pinochet's"
http://en.wikipedia.org/wiki/Augusto_Pinochet

crooked regime
government coup
Suppression of opposition
Economic policy
Secret bank accounts, tax evasion and arms deal
--> Arrest and trial

here we go...
http://words-of-power.blogspot.com/2008/03/can-you-say-pin-o-chet-those-...

http://www.nytimes.com/2008/04/02/business/worldbusiness/02ubs.html?_r=1...
it's only going to get worse.

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/01/MNAEVTF7M...

mudshark @ 31:

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/01/MNAEVTF7M.DTL

Just seeing that article makes me homesick for the Bay Area. (sigh)

Phil Gramm, the wonderful idiot who wrote the legislation that allow a company like Enron to exist. Phil Gramm, whose wife was a lobbyist for Enron, and on their Board. This couldn't be the same Phil Gramm who didn't run for re-election for his Senator job, taking his huge war chest home. He got out before Enron's shit hit the fan. Phil fudges like Hillary, but only worse. He tells whoppers. He was the type of Senator who fought a bill tooth and nail, and then took credit for getting it passed later on. He didn't take credit for his Enron dealings though. Oh, not Phil Gramm.

This couldn't be who McCain is trusting, could it. Phil shouldn't be allowed to stand close to any public funds. It would be like a paedo living next door to a Primary school.

Tug @ 30:

Gramm's wife was on the Board of Directors of Enron, and Gramm must have played a role there.

I used to have a link to a story about how Gramm got his wife on the BoD of Enron and the strings he pulled to do, followed by her lobbying efforts in Washington on their behalf.

I'll do some digging and see if I can find it.

27 The Smiths

Yes we should abandon all our institutions because they were affected by coup as well as we were. Clearly youngbloods have the only value in our society now. Anything that still has any remaining taint of the current administration should burnt to the ground and considered unsalvagable.

This may be a bit off topic, but if McCain doesn't understand economics his potential running mates probably don't either. Part of this list of possible running mates was posted on C&L a few days ago, and I would give the poster credit here, but I don't recall the name. Sorry. I embellished the list with my caustic comments.

Hope this gives you a few chuckles even though it is a scary thought to imagine any of these nutcases on the Republican ticket.

Here are some possible running mates Senator John McCain (aka: McInsane) could pick:

To attract the family values crowd:
ex Congressman Mark Foley (Florida) - an outed gay Republican who ran the Congressional page program and sent explicit emails to some of the pages

Senator David Vitter - family values guy from Louisiana who got his kicks by having his favorite "ladies of the evening" (the DC Madam) dress him in Depends

Senator Larry Craig (Idaho) - homophobic gay-basher who got caught in a sting in a Minneapolis airport men's room with his pants down, literally

ex Congressman Tom DeLay - the former "Hot tub Tom," now a born-again Christian, practices his Christian love by advocating annihilation of all Muslims, liberals and Democrats on the face of the Earth; he is still under indictment for accepting campaign funds illegal under Texas law

To cement the Republican White House’s good grounding in scientific reality:
former Arkansas Governor Mike Huckabee - believes the U.S. Constitution should be amended to make it conform to the Bible; believes Noah herded dinosaurs onto the Ark

Senator Sam Brownback (Kansas) - same as Huckabee (above)

Senator James Inhofe - this Oklahoma senator claims he has traced his family tree back to Creation and found not one gay family member; also believes that global warming is a complete hoax; probably doesn't believe in the theory of Atlantis either

To demonstrate their intimate knowledge of technology
Senator Ted Stevens - could run with McCain if he is not indicted first; would open up the entire state of Alaska to oil drilling as well as parts of neighboring Canada and Russia

Or their vast experience in correctly predicting the outcome of our military interventions
Bill Kristol - editor of the wingnut Weekly Standard and famous Chickenhawk who wants the U.S. to kill virtually everyone else in the world; touts Iraq as a tremendous success

Or just their all-around good-guy reputation
Karl Rove - former top adviser to W Bush and possibly the most sinister dirty tricks artist in U.S. history; made the Nixon crowd look like rank amateurs; his accomplishments include stealing elections, destroying the professionalism of the Justice Department, outing a CIA agent, playing the 9/11 fear card, and dividing the American people

Honorable Mention
Secretary of State Condolizzard Rice - still confused about whether W Bush is her husband; having achieved zero foreign policy objectives she now yearns for greater opportunities as VP

ex Congresswoman Katherine Harris (Florida) - helped W and Jeb Bush steal the 2000 Florida vote by removing convicted felons and thousands of others who were not convicted felons from the voter rolls; was rewarded with her own seat in Congress; ran such a bizarre Christo-fascist campaign for the Senate in 2006 that even Republican leaning Florida rejected her

ex Speaker of the House Denny Hastert - would definitely add some bulk to the ticket; his most important accomplishment was the fact he was the longest serving Republican Speaker in history

ex Senator Rick Santorum (Pennsylvania) - "Slick Rick" was the Number 3 Republican in the Senate; this self proclaimed Christian advocates hating everyone who does not share his religious beliefs; rumored to be living in the Creation Museum in Kentucky

"Confronted with a fire, John McCain is taking advice from an arsonist. If elected, he intends to put the arsonist in charge of fire safety."

Well it is the way Bush has been doing it, so why not?

John McCain admitted to the Wall Street Journal editorial board he “doesn’t really understand economics.”

REAL STRAIGHT TALK instead of the usual DOUBLESPEAK.

Mugsy @ 37:

Tug @ 30:

Gramm's wife was on the Board of Directors of Enron, and Gramm must have played a role there.

I used to have a link to a story about how Gramm got his wife on the BoD of Enron and the strings he pulled to do, followed by her lobbying efforts in Washington on their behalf.

I'll do some digging and see if I can find it.

From here: http://www.buyingofthepresident.org/index.php/archives/1996/41/

"In response to the energy companies’ request, Wendy Gramm set in motion the process that led to energy derivative contracts and other exotic financial transactions being exempted from regulation. (snip)

Cumulatively, Gramm’s campaigns had received $157,250 from the people who were asking his wife to exempt energy derivatives and the other transactions from regulation. (snip)

The name of one company in particular might have caught Wendy Gramm’s attention: Enron Corporation. It was the only company that signed the original request and two of the supporting letters sent later. It’s a fairly large company, based in Houston. Of all the companies that wrote to the CFTC seeking the exemption, Enron was the biggest donor to Gramm’s campaigns, giving $34,100 over the years.

After taking actions that led to the exemptions from regulation, Wendy Gramm resigned on January 20, 1993, the day Clinton was inaugurated. Five weeks later, she was named to Enron’s board of directors. The part-time position pays her $22,000, plus $1,250 for each meeting she attends. In April 1993 the CFTC voted 2 to 1 against regulating the business. Two seats on the board were vacant at the time; the remaining commissioners, all Bush appointees, were seen as ideologically aligned with Wendy Gramm."

Phil and Wendy, ethically-challenged individuals that they are, helped each other.

EliteLemming @ 39:

27 The Smiths

Yes we should abandon all our institutions...

http://www.youtube.com/watch?v=f9TkG-dd3Ok

As long as so many Americans keep putting Rethugnicans into office there is no prospect for any progress on issues like the economy, energy efficiency and global warming. One reason so many Rethugs are in office is because Americans are the most clueless voters on the planet.

In 2001 a college educated Dem friend of mine said she voted for W because he seemed like a nice guy. When I mentioned that W would roll back environmental and consumer protections she became annoyed and asked how I knew that. I tried to explain that there are fundamental policy differences between Dems and Rethugs on a wide range of issues. She looked at me like I didn't know what the hell I was talking about. She demonstrates what is called uninformed and misinformed thinking.

Another friend who voted for Gore in 2000 later voted for W in 2004 because he did not "trust" Kerry. How could he distrust Kerry after all the lies Bush and Cheney uttered during their first term? This is called illogical and inconsistent thinking.

With nitwits like my friends we will keep electing people like Bush, Cheney, Tom DeLay, Newt, Quayle, Inhofe, Craig, Vitter, etc.

There is no solution to this kind of stupidity by so many voters. Rethugs are experts at taking advantage of this stupidity.

Commercial truck drivers are so upset here about the price of diesel, they're going on strike today.

This is Texas, no one goes on strike.

Might explain the cold snap today though

Hell just froze over.

Big Dick Cheney @ 42:

PLEASE CONTINUE TO REFER TO JOHN "THE REPUBLICAN" MCCAIN WITH HIS PROPER MIDDLE NAME...

it is well understood that his handlers are trying to make him appear as "without party" because the GOP sucks at this time....

....i believe he should wear it PROUDLY.... like a lapel pin

I just call him Bush 3.0

Weaseldog @ 55:

Big Dick Cheney @ 42:

PLEASE CONTINUE TO REFER TO JOHN "THE REPUBLICAN" MCCAIN WITH HIS PROPER MIDDLE NAME...

it is well understood that his handlers are trying to make him appear as "without party" because the GOP sucks at this time....

....i believe he should wear it PROUDLY.... like a lapel pin

I just call him Bush 3.0

Or we could just call him the little dick.

"Another friend who voted for Gore in 2000 later voted for W in 2004 because he did not “trust” Kerry. How could he distrust Kerry after all the lies Bush and Cheney uttered during their first term? This is called illogical and inconsistent thinking."

I encountered the same in '04. The Swiftboating of Kerry was beyond reproach... but it worked.

I've never known my peers to be more informed or more liberal than they have been over the past five years, yet at the same time, ask them why they voted for someone like W, and all of their knowledge goes out the window. "My parents said that Rush Limbaugh said," or, "I don't want things to get worse," for example.

I don't get it.

Why are you people blaming Republicans for everything, they did not cause the housing meltdown, greedy people and banks did!

Here in Texas the state publicans pushed through a state constitutional change to remove the Homestead Act. Originally, you home was safe from creditors except the IRS and mechanic's leans.

They pushed it as Don't Let the Government Tell You What You Can Do With Your Money.

So now middle-class people are being foreclosed on, because they rengotiated their mortgages and took out second mortgages to take advantage of the lower rates under the sub-prime market, to find themselves suddenly having to pay more than they can afford.

Rasputin @ 62:

chris @ 61:

Why are you people blaming Republicans for everything, they did not cause the housing meltdown, greedy people and banks did!

Because deregulation served up by first the GOP congress in 1999 and then Bush's nullification of the states "predatory lending" laws in 2003 and Reagan's man Greenspan dumping excess liquidity into the market creating a "credit Bubble"... did cause this. Next question.

Next question?

Why did deregulation of lending allegedly cause a crisis, but deregulation in other industries did not? Deregulation in and of itself is not a bad thing. For example, there could be a regulation that bans gay marriage, or a regulation that bans soft drug use. Wouldn't the "deregulation" of these things be beneficial?

Could it be that Greenspan told everyone to take out variable rate mortgages knowing that rates would go way up after 5 years? Could it be extremely low interest rates the Fed set in 2001-2004 that created an artificial demand that propped up housing prices? Could it be that there was a PURPOSEFUL looking away from lending and housing in order to jack up the prices of houses, so that American consumers could have a seemingly never-ending rise in equity which allowed them to keep the consuming economy going? Could it be that a nation that does not produce anymore is destined to fail, and that ANY action that will stave off total collapse will be taken, such as creating a housing bubble? Could it be that the economy should have gone into a recession after the dot com crash, but didn't because the Fed pumped massive amounts of liquidity that found its way into housing, then after housing burst, into commodities?

It's one bubble after another, and it's getting so bad that MORE THAN ONE BUBBLE is forming at a time. Not only are housing prices still in a bubble, but stocks, financial firms and commodities are also in a bubble. Everything is valued in a currency that has no value backing it up, except the threat to other countries of selling oil in dollars. But this cannot last. This system is not productive, it only puts a band-aid on the wound that is always festering.

Drew @ 65:

Rasputin @ 62:

chris @ 61:

Why are you people blaming Republicans for everything, they did not cause the housing meltdown, greedy people and banks did!

Because deregulation served up by first the GOP congress in 1999 and then Bush's nullification of the states "predatory lending" laws in 2003 and Reagan's man Greenspan dumping excess liquidity into the market creating a "credit Bubble"... did cause this. Next question.

Next question?

Why did deregulation of lending allegedly cause a crisis, but deregulation in other industries did not? Deregulation in and of itself is not a bad thing. For example, there could be a regulation that bans gay marriage, or a regulation that bans soft drug use. Wouldn't the "deregulation" of these things be beneficial?

Could it be that Greenspan told everyone to take out variable rate mortgages knowing that rates would go way up after 5 years? Could it be extremely low interest rates the Fed set in 2001-2004 that created an artificial demand that propped up housing prices? Could it be that there was a PURPOSEFUL looking away from lending and housing in order to jack up the prices of houses, so that American consumers could have a seemingly never-ending rise in equity which allowed them to keep the consuming economy going? Could it be that a nation that does not produce anymore is destined to fail, and that ANY action that will stave off total collapse will be taken, such as creating a housing bubble? Could it be that the economy should have gone into a recession after the dot com crash, but didn't because the Fed pumped massive amounts of liquidity that found its way into housing, then after housing burst, into commodities?

It's one bubble after another, and it's getting so bad that MORE THAN ONE BUBBLE is forming at a time. Not only are housing prices still in a bubble, but stocks, financial firms and commodities are also in a bubble. Everything is valued in a currency that has no value backing it up, except the threat to other countries of selling oil in dollars. But this cannot last. This system is not productive, it only puts a band-aid on the wound that is always festering.

Here... I'll make it easy for you and put it in pictures since your reading comprehension is so poor:

This explains how the banks assumed to much risk by using hedge funds that weren't regulated. They didn't have any regulations at all and that is how this mess got out of control on an epic scale!

PBS NewsHour 20070830 Subprime Primer 1of2
http://www.youtube.com/watch?v=k6jWvOHYeJc

This part covers risk, growth, and the Fed pushing money into to try and re-inflate the "Housing Bubble", welcome to Ronald Reagan's or economist Milton Friedman's free market "bubble economy."

PBS NewsHour 20070830 Subprime Primer 2of2
http://www.youtube.com/watch?v=O5u7H5EOxJY

This is how a couple of hundred billion dollars of bad mortgage debt turns into a multi-trillion dollar meltdown of the world's banks.

PBS Newshour explains the 2008 credit bubble and the Domino Effect
http://www.youtube.com/watch?v=bHXcnWrw7r4

Regulations are to business what laws are to people

Without them corporations become elite citizens.

Rasputin @ 66:

Sorry Rasputin, but Krugman can't have his cake and eat it too. Wars are either good for the economy or they are bad for the economy. One cannot say that wars are good for the economy in one breath, and then state that the money could have been better used elsewhere in the next. Krugman's problem (sorry if I stick to Krugman and not get sucked into a personal quibble with you) is that he is stuck in a Keynesian intellectual world, where even pyramid building is viewed as healthy for the economy, so long as it creates jobs (these are Keynes' own words).

What Krugman does not understand (I am only criticizing him because he has both fallacy filled ideas and fame, a lethal combination) is that the only thing that makes us more prosperous in the long term is if the productivity of labor rises. The productivity of labor rises when there is more savings, because saving finances the creation of capital goods, which is what wage earners use in production. The more capital goods wage earners have to use, the more products they can produce for sale, and because the same labor is being used to produce more products, prices can fall and not hurt profitability.

It is only when prices FALL is there an overall rise in our standard of living.

But wars, excessive government expenditures like building pyramids and missiles and tanks, as well as heavy taxes, all these things directly HURT productivity, because money not spent on capital goods is spent on consumer goods. The more we spend on consumption, the less we spend on capital formation, which HURTS EVERYONE IN THE COUNTRY in the long term.

Rasputin, you can insult me, put me down, do all of these things. But I do not take those statements as anything except a reflection of your own misgivings, not mine. If you want to talk about wars and the economy and why there is a market meltdown, I'll be glad to. But every single time it seems you always bring up "deregulation" in one form or another, yet you never precisely describe what deregulations you are talking about. You simply assume that by saying the word "deregulation" that everyone will understand, because that's how you people gather in flocks. By saying certain keywords here and there with nothing to back them up except for a non-named collective understanding of anti-capitalism.

The problems with our economy go MUCH MUCH deeper than housing and lending. You know that don't you? If it was MERELY a few bad lenders here and there, then in a free market they would have gone bankrupt and then that would be that. But the problems go much deeper than housing regulation. If you cannot take off your side blinders, if you cannot put yourself at a bird's eye view of the economy and figure out why the whole economy is suffering, then you have no reason to talk or assume that you are helping the situation. If all you do is stick to minor things like regulation, and make it THE problem, it only shows your bias and not your ability to see things in the aggregate sense.

Let me repeat. The economy has problems that lie MUCH deeper than housing and the derivatives that were based on it. This economy is suffering the consequences of not producing, and borrowing in order to consume. This is an extremely bad situation that requires MASSIVE overhauling, and by overhauling I mean INTELLECTUAL overhauling, not just tinkering with rules and regulations, which would be like rearranging the deck chairs on the Titanic.

We need to end the Federal Reserve. That is the only way this country can get back to producing again, so that our currency becomes valuable because of what we produce, and not because of the threat our government makes to oil producing nations. You do understand that the Bush administration is fighting wars because that is the only way to keep our war-state economy going, the very war state that Krugman and all the other Keynesians said would be so good for the economy. We are at war not because of terrorism. We are at war because of our own fiscal and economic irresponsibility.

When economies suffer because of statist policies that were thought to work but actually don't and never have, and the majority of people think the state is the solution and not the source of the problems, then self-analysis becomes impossible, and outside environments become targets for blame.

Hardly anyone blames statist policies. They only blame CERTAIN people in state positions that ruined it for everyone. Such naive thinking is incredibly short sighted because is it possible to have 1000 years of big good government without any extremely bad people that come along and take advantage of the situation that is presented to them?

The current government and the supporters, and I mean supporters of Obama and Hillary as well, are predominantly Keynesian in nature, meaning more government to solve bad government. But government is the problem in the first place. Corporations without government privilege are absolutely harmless. But the more people do not take ideas seriously, the more we become lazy and blame this or that regulation, the more that people in this country will not find the answers they are looking for. They will then start to blame the world for what has happened here, hence the empire wars abroad.

Weaseldog @ 70:

Re-Regulation is often termed - De-Regulation.

Other industries got Re-Regulated before 2000.

Since 2000, true De-Regulation has been the fad.

Republicans believe that large corporations should not be bound by rules or laws.

Look at the Telecom Immunity legislation that Bush is trying to get passed. It will make Telecom Corporations completely beyond the rule of Law. No laws would apply to them at all. They could steal or murder during the course of their business and no one could touch them.

They could counterfeit money and no one can touch them.

Bush and the Republican Congress repealed most of the laws that prevent financial institutions from gambling with investments such as mutual funds, 401ks and IRAs, so that they could leverage tons of debt on them and make big commissions.

The Republicans knew what would happen. The effects are taught in High School. Or used to be... These laws were enacted to prevent a second Great Depression.

They knew that removing these laws would lead to another Depression, but they also knew they'd get lot's of money for doing it. And they like money.

Dead on! Those repug bastards knew exactly what they were doing.

It's not like this is the first depression ever. Yet, despite the evidence of the massive failures of their ideaology everywhere (domestic and foreign policy), they stick to-it. Why? Because they don't care. Just let the corporatocracy suck the life out of the country and everyone else in it. That's their problem, not Bush's.

It's GOP 101 basic philosophy (compassionate conservatism). Find people less fortunate than you are, and steal everything they have. They deserve it, and so do you!

Rasputin, you can insult me, put me down, do all of these things. But I do not take those statements as anything except a reflection of your own misgivings, not mine. If you want to talk about wars and the economy and why there is a market meltdown, I’ll be glad to. But every single time it seems you always bring up “deregulation” in one form or another, yet you never precisely describe what deregulations you are talking about. You simply assume that by saying the word “deregulation” that everyone will understand, because that’s how you people gather in flocks. By saying certain keywords here and there with nothing to back them up except for a non-named collective understanding of anti-capitalism.
---Drew

I've said this all to you before, but as per my last post to you... your reading comprehension is truly abysmal!

1. The Banks and brokerages used hedge funds to evade US banking regulations on the amount of risk they could assume and the amount of capitalization that they needed to back up both their loans and the securities they issued. The videos explain that very well... but you alway evade answering them.

PBS NewsHour 20070830 Subprime Primer 1of2
http://www.youtube.com/watch?v=k6jWvOHYeJc

This is how a couple of hundred billion dollars of bad mortgage debt turns into a multi-trillion dollar meltdown of the world's banks.

PBS Newshour explains the 2008 credit bubble and the Domino Effect
http://www.youtube.com/watch?v=bHXcnWrw7r4

And which pieces of deregulation specifically allowed the current subprime crisis to develop?

It was the repeal of the Glass-Steagall Act of 1933

Following the Great Crash of 1929, one of every five banks in America fails. Many people, especially politicians, see market speculation engaged in by banks during the 1920s as a cause of the crash.

In 1933, Senator Carter Glass (D-Va.) and Congressman Henry Steagall (D-Ala.) introduce the historic legislation that bears their name, seeking to limit the conflicts of interest created when commercial banks are permitted to underwrite stocks or bonds. In the early part of the century, individual investors were seriously hurt by banks whose overriding interest was promoting stocks of interest and benefit to the banks, rather than to individual investors. The new law bans commercial banks from underwriting securities, forcing banks to choose between being a simple lender or an underwriter (brokerage). The act also establishes the Federal Deposit Insurance Corporation (FDIC), insuring bank deposits, and strengthens the Federal Reserve's control over credit.

SNIP! Jump to modern day...

Oct.-Nov. 1999 Congress passes Financial Services Modernization Act

After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic.

On Oct. 21, with the House-Senate conference committee deadlocked after marathon negotiations, the main sticking point is partisan bickering over the bill's effect on the Community Reinvestment Act, which sets rules for lending to poor communities. Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Gramm, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

But wait there is more...

Bush Administration invoked an obscure Banking clause 1863 to enable predatory lending practices

Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York’s, enacted laws aimed at curbing such practices.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers. In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative.

http://www.crooksandliars.com/2008/02/15/bush-administration-invoked-an-...

Quit trying to play the victim and distorting the truth. The Fed does play a role and I noted that, but you always try to ignore the deregulation part of the picture to spin your "free market" Ron Paul BS and anyone who points out the facts you start calling an "anti-capitalist" or a "communist."

"Free Market capitalism" theory and "Communism" are the opposite sides of the same coin... they are academic theories that don't work in the real world because of basic human nature.

Communism was supposed to be the "Worker's Paradise" and the central government was supposed to dissolve away. Well that didn't work out to well now did it... Stalin and Mao found that hanging on to power and living lavishly at the workers expense was much more attractive.

"Free Market Capitalism" has never existed anywhere in the world either and in the absence of regulations the greed of the mortgage brokers and banks produced a "feeding frenzy" that now threatens the entire worlds financial system with collapse.

Instead of promoting self regulation and the "rule of law" as the "Free Market" theory goes... we saw wide spread institutionalized fraud:

Chase mortgage memo pushes 'Cheats & Tricks'

The memo's title says it all: "Zippy Cheats & Tricks."

It is a primer on how to get risky mortgage loans approved by Zippy, Chase's in-house automated loan underwriting system. The secret to approval? Inflate the borrowers' income or otherwise falsify their loan application.

http://www.oregonlive.com/business/oregonian/index.ssf?/base/business/12...

Greed and unenlightened self interest will always bring these Utopian fantasies down!