Meet the Real Villain of the Financial Crisis

OpEd in the NYT maintains, correctly I think, that Congress is to blame.

From the article:

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I don't expect Congress to level much (if any) criticism at themselves. They are, as always, blameless.

There are so many angles in this mess~~~~~~

Sure Congress bears part of the blame-note the guys filibustering the bill.

Yep - many are to blame for sure.

Can you tell me if you think that this is a good bill and if so why?? From what I've been reading it seems that even though the Republicans are blocking this bill, many democrats also say that it lacks teeth. Here is one such opinion piece that I found interesting Financial Reform: Meat or Kabuki Today? | FDL Action

I appreciate your input Buz

I know. And, I appreciate the opinions, but there are more than just two: blame dem or rep......this one goes deeper and until those dems and reps resolve this minor fact, they will simply continue to point the finger. Unfortunately.

Thank you.

I think this bill is an improvement over the status quo. In fact there is no doubt.

However it lost a tremendous amount of muscle when the fiduciary standard (introduced by Carl Levin) was stripped out.

The lack of a fiduciary standard is bad but we don't have one today.
So stockbrokers can claim (sorry guys) that they are looking out for your interest when that is optional.

Some do...

The worst enemy of a good financial plan is the illusion of a perfect financial plan. So is this bill perfect? Nope but it is an improvement.

Would I like to see a Consumer Financial Protection Agency? Undoubtably.

The too big to fail dilemma could be solved by requiring banks to make more reserves.

Hopefully the theater of watching 41 Republicans vote en masse for Goldman Sachs will change the dynamics.

Too long?

I'm sorry.

Thank you.

I think this bill is an improvement over the status quo. In fact there is no doubt.

However it lost a tremendous amount of muscle when the fiduciary standard (introduced by Carl Levin) was stripped out.

The lack of a fiduciary standard is bad but we don't have one today.
So stockbrokers can claim (sorry guys) that they are looking out for your interest when that is optional.

Some do...

The worst enemy of a good financial plan is the illusion of a perfect financial plan. So is this bill perfect? Nope but it is an improvement.

Would I like to see a Consumer Financial Protection Agency? Undoubtably.

The too big to fail dilemma could be solved by requiring banks to make more reserves.

Hopefully the theater of watching 41 Republicans vote en masse for Goldman Sachs will change the dynamics.

Too long?

I'm sorry.

Actually the republicans have stripped out some of the more worthless parts of the dems bill (like the perma-bailout authority for FDIC, which I might add Obama is against) and are now circulating their own measure. It includes an unwind provision for Freddie and Fannie as well, something sorely missing from the dems proposals.

Generally I think the hope is the two bills can be combined into a single piece of legislation that will get bi-partisan support.

The real tragedy here is not the filibuster of the dem's bail out bill, it's the fact that dems have been presented with a real opportunity to produce bi-partisan legislation, and thus far have totally refused to take advantage fo it.

Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."

Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.

I was hoping you would chime in on this. I always learn a lot from your posts!!

I'm still trying to figure out what the heck a derivative is though

Derivative is the by-product of the actual mortgage created to entice investors. While once very simple, they are continually evolving with the industry and investor demands into complex vehicles.

Ultimately it is the responsibility of the individual to live within his or her means.

Thanks Lynnie - that's the best explanation I've seen. I have friends that lost a lot of money on those investments tied to risky mortgages. I've got a very conservative Warren Buffet style money manager so luckily was spared

This PBS Frontline Documentary called "The Warning" does an investigative treatment of the crash and casts a wider net of responsibility. Important people were pointing out the dangers and more important people were ignoring them.

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"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."