Update: Oreo, Dog Thrown Off Building, Was Euthanized
People Wait For Tomorrow's UWS Apple Store Opening
Cheap Chicken Wing Deal Ruined by Gunslinging Teens
FIT Students Busted For Drug Dealing Get Probation
Views From Your Windows
From left: Goldman Sachs & Co. Chief Executive Officer and Chairman Lloyd C. Blankfein; JPMorgan Chase & Co. Chief Executive Officer James Dimon; Bank of New York Mellon Chairman and Chief Executive Officer Robert P. Kelly; Bank of America Chairman and Chief Executive Officer Ken Lewis; State Street Corporation Chairman and Chief Executive Officer Ronald E. Logue; Morgan Stanley Chairman and Chief Executive Officer John Mack; Citigroup Chief Executive Officer Vikram Pandit, and Wells Fargo & Co. President and Chief Executive Officer John Stumpf. Photograph by Manuel Balce Ceneta/AP
The heads of U.S. banks who have received a combined $135 billion in Troubled Asset Relief Program funds were in the firing line of the House Financial Services Committee. When the executives were somewhat apologetic for the credit collapse—Morgan Stanley's John Mack said, "We are sorry for it. I am especially sorry for what's happened to shareholders [and the American public]. Clearly, as an industry, we have accountability and we're taking responsibility. I'll take responsibility for my firm."—many members of Congress took the Festivus-approach, by airing grievances.
Rep. J. Gresham Barrett (R-SC) asked Citigroup's Vikram Pandit to lower the credit card penalty interest rate (which averages at 24.5%): "Why can’t you do something like that? This country is in a recession headed for a depression. Why can’t you do something for them? Can you reduce that rate for a year or two?” Rep. Nydia Velazquez (D-NY) wondered why the banks aren't supporting legislation that allows bankruptcy judges to modify mortgages. And the Post reports how Rep. Michael Capuano (D-Mass) said, "Do you understand that it's a little difficult for my constituents to take, that you learned your lesson?" and was later dismissive of the executives' apologies, "Basically, you come to us today on your bicycles, after buying Girl Scout cookies and helping out Mother Teresa, telling us, 'We're sorry, we won't do it again. We didn't mean it. Trust us!'"
Bank of America's Ken Lewis came under fire for Merrill Lynch's extremely generous bonuses—over $3.6 billion worth, as Merrill was announcing a $15 billion loss during the 4th quarter (BoA now owns Merrill). Lewis said, "My ... involvement was very limited. Merrill] had a separate board, separate compensation committee and we had no authority to tell them what to do; just urge them what to do. So we did urge."
add to stumble upon
add to reddit
tweet this
post to facebook
"Rep. J. Gresham Barrett (R-SC) asked Citigroup's Vikram Pandit to lower the credit card penalty interest rate (which averages at 24.5%): "Why can’t you do something like that? This country is in a recession headed for a depression. Why can’t you do something for them? Can you reduce that rate for a year or two?”
Hey moron, why can't Congress come up with some usuary laws?
The whole reason these CEOs are sitting before Congress is because Congress didn't put any oversight into TARP.
Sorry, but a simple public dressing down of these lowlifes doesn't cut it. Of course bloodsuckers like Citigroup don't want to lower the credit card penalty interest rate and of course banks don't support legislation that would allow bankruptcy judges to modify mortgages so as to stave off foreclosure. Dog and pony showtime's over: the only public demonstration that congress is no longer kow-towing to the banking industry that matters any more is passage of legislation that regulates credit card penalty interest rates and the bankruptcy measure. Period. Next case.
Crooks vs. Crooks.
Couldn't have said it any better.
Congress has been running the country into the ground financially for years yet they keep voting themselves pay raises and enjoying expensive perks and benefits on the taxpayer dime too.
Another thing: why is nobody from Fannie Mae (where the whole meltdown started), getting grilled over anything? Oh wait, Fannie Mae was a democrat party pet project run by the government.
These are nothing by Soviet-style show trials.
The meltdown did not start at Fannie, they were really more of a victim in this whole thing. But it is true that there has not been the proper level of investigation into that angle.
The government encourgaged the banks to continue to make loans - no matter how risky - because the government promised to buy back these loans - via vehicles like Fannie.
Like the vast majority of problems in our country - the government is there at the root.
In my mind, the root was irresponsible lending, irresponsible borrowing, and irresponsible derivative trading. It's true that the government encouraged some lending, but they never encouraged lending to people that any reasonable person would realize cannot pay it back, nor did they encourage the kind of speculation and trading that went on.
F/F only buy "conforming" loans, which generally require income verification and good credit. They may not require a downpayment, but in that case (or if the LTV is otherwise too high) mortgage insurance is required. The government never promised, implied or otherwise, that they would buy any loan, "no matter how risky", so your reasoning seems to have a gap there. There is also data indicating F/F loans were much less likely to be foreclosed on. See http://www.iht.com/articles/2008/11/11/business/mortgage.php though that is obviously now a few months old.
Always quick with the right-wing spin you are, ides. Sorry, but it was largely unregulated private sector loans that set off the crisis.
Between 2004 and 2006, when subprime lending was at its peak, Fannie M and Freddie M went from holding around 48% of subprime loans to about 24%. By 2005-06, the private sector securitized almost 2/3 of all U.S. mortgages, and according to the Federal Reserve Board, more than 84% of subprime mortgages in 2006 were issued by private investment banks.
Throw them in prison and take away all their assists!!!
It was the government via Fannie Mae coercing banks to go against time-tested financial prudence and make risky loans to people in so-called underserved communities (ie democrat party constituency groups). Lending money to people based on their race and ethnicity instead of ability to provide a down payment or make mortgage payments is a recipe for economic disaster.
The banks are at fault for not resisting these idiotic liberal social experiments and by accepting this bail-out they've simply made another Faustian bargain with an increasingly out-of-control government.
Through what mechanism did F/F "coerce" banks? Is there any documentation of this? Has any bank CEO or other official claimed this coercion occurred?
Where in any F/F product is there any indication that lending shall be based on race rather than income and LTV? Is there any documentation of this? Has any bank CEO or other official claimed this discrimination occurred?
Nice attempt trying to blame the meltdown on minorities, but they represented only a small portion of overall mortgage lending. (And btw, it was Bush was the one pushing the Ownership Society, my friend...)
You've managed to get things completely ass-backwards. Fannie and Freddie weren't pushing lenders to sell them more loans, they were struggling to keep up with the competition from private investment banks, who btw, completely came to dominate the sub prime market by the time the house of cards fell.
At least is was cathartic to watch. We should all get a chance to yell at these dipwads.
Make them eat the peanut butter.