The American Bankers Association, a trade group, acknowledges that it exerted pressure to change the rules. The ABA was the biggest donor to the campaign funds of committee members in the weeks before the hearing. It gave a total of $74,500 to 33 members of the committee in the first quarter, according to the Journal analysis of public filings. An ABA spokesman says that is its normal level of support for lawmakers, and that the initiative was part of a broader effort to change accounting rules. “We worked that hearing,” says ABA President Edward Yingling. “We told people that the hearing should be used to talk about the big problems with ‘mark to market,’ and you had 20 straight members of Congress, one after another, turn to FASB and say, ‘Fix it.'”
They’re paraphrased here:
- 1: Fed Chair Alan Greenspan dropped rates to 1% and kept them there.
- 2: Investors thus craved mortgage-backed securities, since those were the only AAA bonds that paid high yields regardless of the Fed’s low rates.
- 3: Those derivative securities were rated AAA because the bond salesmen (Wall Street) paid the rating agencies (Moody’s, S&P, and Fitch), and because – due to the Commodity Futures Modernization Act of 2000 – no regulations restricted frauds against investors in derivative-based securities.
- 4: Taxpayers were put on the hook for Wall Street’s losses because the 1999 Gramm-Leech-Bliley Act eliminated FDR’s 1933 Glass-Steagall Act.
- 5: The SEC in 2004 allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman, and Bear Stearns.
- 6: Wall Street adopted for executives and traders a compensation system with vast upsides for winners and zero downside for losers (all risks to be borne by defrauded investors, and by taxpayers when those investors were other Wall Street firms).
- 7: Though the Fed was authorized to supervise non-bank MBS originators (such as Countrywide), Greenspan refused.
- 8: This allowed non-bank MBS originators to commit massive frauds.
- 9: Adjustable-rate, interest-only, and other come-on mortgages, drew millions of ignorant people to the mortgage slaughter, to be sliced and diced by Wall Street, for investors.
- 10: Wall Street’s incentive system was based only on loan volume, not at all on loan quality, because government had been corrupted: top executives thus didn’t need to worry about the actual quality of the loans they generated and sold.
- 11: In 2004, the Office of Comptroller of the Currency federally pre-empted and nullified state laws regulating mortgage credit, thus completing what the 1999 and 2000 federal laws had begun: total deregulation of MBS.
Ritholtz explained that Michael Bloomberg made his fortune by selling the world’s investment firms 400,000 terminals at $1,500/month and that thus Bloomberg was patting his own customers on the back by saying they weren’t at all to blame for the financial collapse; so, the Republican Bloomberg alleged that Democrats had “forced” banks to lend to the poor. Bloomberg was playing the public for suckers, as Wall Street had done.
^5000The mainstream imperialist media lie CONSTANTLY. Literally 24/7. And it's getting worse. All of them do it: radio, tv, the newspapers, the movies. The internet. No exceptions. The corporate Big Lie is pervasive and totalitarian. CBS does it. NBC does it. ABC does it. CNN does it. FOX does it. NPR does it. And of course the NYTimes and WaPo do it. Thousands of "diverse" voices telling you the same lies. Enough to convince anyone.
^5000The mainstream imperialist media lie CONSTANTLY. Literally 24/7. And it's getting worse.
All of them do it: radio, tv, the newspapers, the movies. The internet. No exceptions.
The corporate Big Lie is pervasive and totalitarian. CBS does it. NBC does it. ABC does it.
CNN does it. FOX does it. NPR does it. And of course the NYTimes and WaPo do it.
Thousands of "diverse" voices telling you the same lies. Enough to convince anyone.