CABL Forum - Re: try and understand it this way

First off can I get a beer. Secondly, even though you put this in a comical light, it is exactly what the banks had done.

And the part that is so overlooked, up to 1999 it could not have happened. There ware a law that strickly forbade the banks from being involved in securities. It was gutted in 1999 by the Gramm-Leach-Bliley Act. It is an act which repealed part of the Glass-Steagall Act of 1933, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as both an investment bank and a commercial bank, or as both a bank and an insurer.

The Gramm-Leach-Bliley Act allowed commercial and investment banks to consolidate. For example, Citibank merged with Travelers Group, an insurance company, and in 1998 formed the conglomerate Citigroup, a corporation combining banking and insurance underwriting services under brands including Smith-Barney, Shearson, Primerica and Travelers Insurance Corporation. This combination, announced in 1993 and finalized in 1994, would have violated the Glass-Steagall Act and the Bank Holding Company Act by combining insurance and securities companies, if not for a temporary waiver process. The law was passed to legalize these mergers on a permanent basis. Historically, the combined industry has been known as the financial services industry.

Yes Clinton had a republican congress during this time, but they were not the only ones voting.The House passed its version of the Financial Services Act of 1999 on July 1st by a bipartisan vote of 343-86 (Republicans 205–16; Democrats 138–69; Independent/Socialist 0–1), two months after the Senate had already passed its version of the bill on May 6th by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and one Democrat in favor; 44 Democrats opposed).

When the two chambers could not agree on a joint version of the bill, the House voted on July 30th by a vote of 241-132 (R 58-131; D 182-1; Ind. 1–0) to instruct its negotiators to work for a law which ensured that consumers enjoyed medical and financial privacy as well as "robust competition and equal and non-discriminatory access to financial services and economic opportunities in their communities" (i.e., protection against exclusionary redlining).

The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4th, the final bill resolving the differences was passed by the Senate 90-8. and by the House 362-57. This legislation (whose voting margins, if repeated, would easily have overcome any Presidential veto) was signed into law by Democratic President Bill Clinton on November 12, 1999.

This what allowed theSub Prime Mortgage boom which in turn created Mortgage Backe Securities which is what got us to where we are now. This is ground zero of this whole mess. And democrats and republicans are neck deep in it ( yes Barney Franks and Chris Dodd voted for it ). This is why I howl that a "party" is going to ride in as the white hat cowboy and save us. They caused it.

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Re: try and understand it this way