Five Years Ago Today

At about 1 a.m. on Monday, September 15, 2008, Lehman Brothers announced that it would file a Chapter 11 bankruptcy petition, following several days filled with feverish discussions of all sorts of acquisition and liquidation possibilities, none of which were to come to fruition.

That day it became clear to even the most casual observer that the financial crisis was in full swing. Many of the events leading up to and following the most critical stages of the crisis will be studied and debated for decades to come. Every sentient individual realizes that perverse incentives in the financial industry lay at the heart of the problem. Yet little has been done to prevent similar crises from occurring in the future.

Five years on, some of the biggest players -- formerly at the very top of Big Finance's food chain -- are living very large indeed:

http://www.publicintegrity.org/2013/...meltdown-world

31 years of government malfeasonance starting with the 1977 Community Reinvestment Act and ending with Barney Frank telling the world that Fannie and Freddie were sound in July of 2008.

31 years of government malfeasance (ed.) starting with the 1977 Community Reinvestment Act and ending with Barney Frank telling the world that Fannie and Freddie were sound in July of 2008. Originally Posted by JD Barleycorn

Glad to know there are others who also look back with disgust at that Democrat "social engineering" experiment that like all their other social engineering ideas, have all led to what can only be called colossal fuckups with disastrous result for just about everyone except the super rich.

31 years of government malfeasonance [sic] starting with the 1977 Community Reinvestment Act and ending with Barney Frank telling the world that Fannie and Freddie were sound in July of 2008. Originally Posted by JD Barleycorn

Yes, there certainly was no shortage of government malfeasance, and Frank was responsible for plenty of it. In fact, according to this IBD editorial, he even inadvertently confirmed that:

http://news.investors.com/ibd-editor...ial-crisis.htm

But partisans need to recall that there was plenty of blame to go around. In a variety of ways, the Bush administration left fingerprints all over the wreckage. GWB's first NEC director, Larry Lindsey, acknowledged this when he admitted that few within the administration were eager to do much to dial back the "ownership society" push, or to undertake action to prevent the expansion of a debt-fueled bubble. And the gross fiscal irresponsibility of the first half of the last decade helped steer the nation's fisc toward a shaky location.

And the eagerness with which reckless policy goals are pursued continues unabated. 28-year-old columnist Josh Barro points to one key example:

http://www.businessinsider.com/you-c...-reason-2013-9

Wash. Rinse. Repeat. It seems that nobody ever learns anything.

A recent op-ed in the Los Angeles Times offers a brief but cogent explanation of the almost completely unreformed (at least in any meaningful way) status of the financial system.

http://www.latimes.com/opinion/comme...,4139139.story

But the residential real estate boom & bust would not have been remotely as serious without a mighty assist from arguably the biggest enabling agent of all -- the Federal Reserve.

In an overreaction to the equity market deflation of 2000-2002, and to 9/11, the Fed shoved the policy rate (Fed funds target rate) all the way down to 1% and left it there for an extended period of time before slowly raising it. The die was cast and the bubble began to be pumped. The rest is history.

When poor public policy choices allow sharp operators and fraudsters to game the system, a number of them quickly rush in to fill the space. We saw that in the decade following the poorly designed S&L deregulation of a third of a century ago. In that instance, there were a lot of cases of clear-cut criminality. Many people went to prison.

But the last decade featured a smarter, more careful collection of miscreants. They were able to play high-stakes "heads we win, tails taxpayers lose" games with other people's money, but with little or no risk of criminal prosecution.

Both parties gained from the Bubble.. but many want to blame Bush and Republicans ONLY which total bullshit!!

Clinton sent his goons to Banks and told them to lend to poor credit borrowers or we will go up your ass with a microscope...so CRA went overboard!! then he forced Fannie and Freddie to buy up low FICO high LTV loans

ACORN Mortgages: yes its good idea to lend 100% Loan to Value, to people with a 500 credit score!!!!

malfeasonance Originally Posted by JD Barleycorn

That's our resident "perfesser" on the job again. I wonder if he's been into cpl nostones' pain meds? Probably not, mopboy can handle personal "malfeasonance" all by him wittle self, no assistance required.

Stupid Teawipe Arsewhole.