Banking expert Peter Wallison explains why deregulation didn’t cause the financial crisis, while Steven Malanga explains how government regulators foolishly pressured banks to drop prudent lending criteria as “discriminatory,” resulting in risky lending that caused the crisis.
Peter Wallison was one of the few people who warned for years about the risky practices of the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, which helped spawn the mortgage crisis. Liberal Congressional leaders turned a deaf ear to his pleas for reform, blocking reform legislation and claiming that the leadership of the fraud-ridden Fannie Mae was “outstanding,” while Fannie Mae was busy engaged in accounting fraud to enrich its managers (who remain liberal power-brokers), and political bullying. (Congressman Barney Frank’s role in causing the mortgage crisis is chronicled in the Boston Globe).
Yesterday, the SEC reformed mark-to-market accounting rules to make them less rigid. [CORRECTION: THE SEC JUST "CLARIFIED" THE RULES. IT'S NOT CLEAR THAT THE SEC CHANGED THE RULES SUBSTANTIVELY AT ALL. THE NEWS STORY I LINKED TO MADE IT SEEM LIKE A REFORM, BUT IT WASN'T MUCH OF A REFORM]. Those rules have apparently contributed to the financial panic and frozen credit markets. The SEC should also revisit wasteful regulations governing the minutiae of companies’ “internal controls,” which cost the economy $35 billion per year.
Community organizers like the fraud-ridden ACORN used regulations like the Community Reinvestment Act to pressure lenders into making billions of dollars worth of bad loans.
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U admit they committed fraud and you got the balls to say it WASN'T the lack of regulation!?!? 'Cuse me while I go throw up this lie….
There is plenty of blame to go around. But the UNregulated derivatives market with its speculative Credit Default Swaps & CDO's is the biggest cause for this mess & will cause our economy to collapse. With estimates of 62 trillion dollars in the US alone, more than 142 trillion worldwide, even a trillion dollar bailout is but a drop in the ocean. Of course your agenda driven spin piece doesn't even address that.
There has also been massive fraud that has been exposed in this sham! Inasmuch that BOTH parties are not serving us, the constituents, but the bankers and CEO's and corporations also own the media, rest assured you will not hear the real story on the nightly news.
From Bush to Clinton and Bush Jr. it's just more of the same. Deregulation has EVERYTHING to do with this! Goodness, the Regulators that are supposed to be overseeing what little there are left have merely turned a blind eye to the massive fraud.
http://www.moneyandmarkets.com
http://www.rgmonitor.com
http://www.marketoracle.co.uk
What is it you were babbling about?
To say deregulation didn't play a hand in the crisis is foolish, saying it was the only cause is equally as foolish if not more.
The crisis was not cause by a single thing, its the culminating of multiple things including deregulation and the government pushing banks to give bad mortgages, greed, general stupidity (the idea that a market can grow forever and the idea that a house is an investment)