Blame Bush, then MoveOn.something


Yes, bring It On.

Lax financial regulation during the W years (Bush two, not the hotel chain) encouraged and permitted unrestrained lending, artificially pushing up bipartisan but politically charged home ownership goals and lending to the “under served.” All of this pushed up housing prices way beyond a more natural, slower likely increase in prices. The world wide recession we are not out of is due to rotting from the top.

Deregulation by attitude. Period.

By the way the last internet domain still available for MoveOn.anything is MoveOn.cc which is one of the costly ones. Most domains can be registered for less than $10 a year but the .cc  version is much more as are a few others such as tv.

But I digress and will move on. Join me, although it may be entirely too late.

If you think tight money is the Greenback reeking of alcohol, read no further.

And if you think tight money means a high or increasing interest policy of the Federal Reserve, have a drink to clear your head for some economic glastnost. Todays crazy low rates are designed to support the failed banking system including my favorite pinata, the housing duopolies of Fannie Mae and Freddie Mac. They were always the most government controlled of the bunch and with the least amount of capital. Contrary to popular beliefs, Bush tried to get them more regulated and with more capital, but Barney and Co thought that would hurt their affordable housing missions.

Why is it the big banks are doing better than Fan and Fred and with less taxpayer money. Blame in on Bush and MoveOn.

Really tight but cheap money is not cheap enough if not really available even for borrowers with jobs because of overly compensatory lending policies at banks and state owned companies like my favorite pinata, the housing duopolies mentioned above. Life support for failed institutions, onerous restrictions  for everyone else.

Fan and Fred retain their historical role for underwriting standards but now that the cow is out of the barn sensible underwriting went out along with the non underwriting of the 2003-2008 period. One successful borrower told me he felt dirty, as if he were grilled on “Law and Order” as the primary suspect.

Separately, almost all of the media, except for the older vast right wing conspirators, the newer Tea Party so far promoting economic policy targets, not social policy and lastly, non joiners like me (go ahead, smear me anyway), right now equates the recent successful passing of vast unread historic financial regulations with successful regulations.

All with no attendant shame, far worse than my brazen promotion of hypdomains.com for the lucrative kickbacks I get from GoDaddy.com.

Regulatory success will only come when everyone is engaged with the risk taking process in any lending. Federal Reserve Chairman Allan Greenspan and Warren Buffet as a major beneficiary of profits from Moodys False Rating Systems as well as Goldman Sachs are the two most complicit individuals without a valid excuse. Each could have influenced questionalable activities.

But they did not do anything helpful. They bith admit they were each surprised by the meltdown - due to their ignorance of what was really going on. Had they or an underling spent and reported back on a day -one day- spent at a mortgage lender or reviewed a dozen random loan packages there would have been no surprise. Is it too much to ask regulators to actually review loans and apply common sense and engage with the lenders where it matters? No. And they have all the power they needed before the historic legislation to do that and take aggressive action. But politics might have inhibited regulators and greed inhibited Buffet, ya think?

Perhaps all (or at least a lot) of what we need to know for life we learned in kindergarten and all we need to do about financial regulation is fully transparnt in this article about the Bank of America trying to rid itself from regulatory action.

As long as the memorandum (my insert; required by regulators) is in place, Bank of America is subjected to intensified scrutiny from regulators and restraints on certain moves (my insert; regulate closely all the time). The Charlotte, N.C., lender, for example, isn’t allowed to raise its dividend as long as the memorandum hasn’t been lifted, said people familiar with the agreement. It would also have to run other large decisions (my insert: like underwriting and instruments offered to the public) by regulators who, housed at the bank’s headquarters, now (my insert; Bush is gone, keep them there so they earn their pensions) have more oversight on day-to-day operations. (my insert: simple solution)

Regulators’ reluctance to release the agreement quickly is yet another signal that U.S. minders (my insert; regulators) are shortening the leash as they work to prevent future blowups at the nation’s biggest banks. Regulators now are faster to slap banks with penalties and slower to set them free from crisis-era constraints, said people familiar with the U.S. actions. (insert; why do we need new legislation now that regulators are doing their jobs?)

The “pendulum,” said one person close to the bank, is swinging from “the permissive side to the highly restrictive side.” Regulators now “are super vigilant about everything.”

Imagine that. Super vigilant regulators paying attention to business instead of, say, politics?