MUST SEE - Rep. Joe Walsh SCREAMS At Constituents, Defends Big Banks, Blames Washington For Financial Crisis
Republican Rep. Joe Walsh held a townhall at Uno Bar and Grill in Gurnee, Illinois last month and things got a little heated. Walsh is wrong for the most part, spewing the oft-repeated Wall Street-backed nonsense that the financial crisis was caused by government regulations, the CRA, etc. We are not fans of government, not by any stretch of the imagination, but this argument is old, tired, and false. The banks did it to themselves, and unchecked leverage on Wall Street and in European banks turned a housing crisis into a global meltdown.
Barry Ritholtz at the Big Picture wrote the definitive piece shooting down this argument:
Excerpt:
Let’s clarify the causes of current circumstances. Ask yourself the following questions about the impact of the Community Reinvestment Act and/or the role of Fannie & Freddie:
• Did the 1977 legislation, or any other legislation since, require banks to not verify income or payment history of mortgage applicants?
• 50% of subprime loans were made by mortgage service companies not subject comprehensive federal supervision; another 30% were made by banks or thrifts which are not subject to routine supervision or examinations. How was this caused by either CRA or GSEs ?
• What about “No Money Down” Mortgages (0% down payments) ? Were they required by the CRA? Fannie? Freddie?
• Explain the shift in Loan to value from 80% to 120%: What was it in the Act that changed this traditional lending requirement?
• Did any Federal legislation require real estate agents and mortgage writers to use the same corrupt appraisers again and again? How did they manage to always come in at exactly the purchase price, no matter what?
• Did the CRA require banks to develop automated underwriting (AU) systems that emphasized speed rather than accuracy in order to process the greatest number of mortgage apps as quickly as possible?
• How exactly did legislation force Moody’s, S&Ps and Fitch to rate junk paper as Triple AAA?
• What about piggy back loans? Were banks required by Congress to lend the first mortgage and do a HELOC for the down payment — at the same time?
• Internal bank memos showed employees how to cheat the system to get poor mortgages prospects approved that shouldn’t have been: Titled How to Get an “Iffy” loan approved at JPM Chase. (Was circulating that memo also a FNM/FRE/CRA requirement?)
• Did the GSEs require banks to not check credit scores? Assets? Income?
• What was it about the CRA or GSEs that mandated fund managers load up on an investment product that was hard to value, thinly traded, and poorly understood.
• What was it in the Act that forced banks to make “interest only” loans? Were “Neg Am loans” also part of the legislative requirements also?
“It’s telling that, amid all the recent recriminations, even lenders have not fingered CRA. That’s because CRA didn’t bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA — or any federal regulator. Law didn’t make them lend. The profit motive did.”
Dec 31, 2011 at 11:00 AM
Reader Comments (38)
What forced main street, ordinary joe blow peope to borrow? Who held a gun to the average citizen's head and forced them to borrow money they didn't have to buy crap they didn't need?
http://www.ritholtz.com/blog/2009/06/100000-cra-challenge/
Nice to see you. You make a valid point. And I have never excused borrowers. I rip the banks because of fraud, and because of the massive bailouts they have received, stealth and otherwise. This clip wasn't really about borrowers. As Walsh framed the debate, it was -who deserves the blame, banks or government? - and within that debate, the answer is banks, for the most part, though I blame regulators as well.
Now, if Walsh had said blame borrowers not the banks, I would have said blame them both. When it comes to foreclosure, if it's done legally, with a complete chain of title, no robo-signing, no fraud, etc, then I don't have a problem with foreclosure. But the rule of law is important - so all documents must be legit and in order and there must be no fraud.
Did you even read the excerpted material from Barry Ritholtz?
What part of it don't you agree with?
This is NOT a piece excusing borrowers as Mark pointed out. This is about Wall Street and big banks attempting to find an excuse for their failure.
Collateral_Damage_911 - get it here:
http://www.israelshamir.net/Contributors/Collateral_Damage_911.pdf
Part 2:
www.israelshamir.net/Contributors/Collateral_Damage_Part_II_26122008.pdf
Fraud's bad, no matter what the industry, agreed. As for bailouts, well, if banks did not exist, the government would still use our money to bail out and prop up favored (donor) businesses, be it farmers, home builders, cowboy poets, or what have you.
The problem is the government, and the fact that it has now assumed the authority to take money from me and you, and give it to favored interests. That's wrong, and 100% on the government.
"As Walsh framed the debate, it was -who deserves the blame, banks or government? - and within that debate, the answer is banks, for the most part, though I blame regulators as well."
As I said, banks could cease to exist, and we would still have the problem of the government taking money from me and you, and giving it to friendly interests.
Until the core, underlying problem is addressed, it will continue. The government is pulling your tail, and getting you to believe someone else is to blame.
J.T. Kirk (I-Awesome) should have offed that fucker when he had the chance:
http://www.youtube.com/watch?NR=1&v=IDD3-2_wLR8
Where's Sensei Kreese when you really need him?
What forced main street, ordinary joe blow peope to borrow? Who held a gun to the average citizen's head and forced them to borrow money they didn't have to buy crap they didn't need?
1. I blame the Goverment First. This was all planed out in the early 70's.....The goverment planed to take down the middle class. The goverment knew dam well they could get the banks to do the dirty work for them.
2. I blame the banks 2nd. The banks were promisd very big signning bonous for every loan they could write. Dont worry about the people who can neaver pay the loan, we the goverment will cover all your loss's times 5. Just put people in house's.
Bankers made big money writing Lyers Loans. My Son was one who fell for it knowing he could neaver pay for it. He was on the street in 2008. Sure the bankers knew they were ripping of the people, but the Goverment promised them Big Bucks for doing the "Dirty Work"............
3. I blame the people like my son that knew better. Knew they could neaver aford the payment when the interest reset in 2 years. They knew better, but the banker said hey, this is your chance to have your Dream House........
These are the people I feel nothing for. They knew it was to much house. The goverment and the bankers knew dam well the people would fall for the bait, and the weak did.......
So nothing new here. The goverment and big banks team up and take down the middle class people. The goverment take B$$$$$$$ions from the American People and pay back the banks for doing the dirty work.
Everything worked out as planed, maby better. The weak just couldent say no to a house that took 3 incoms to aford..........
What are you even trying to say?
It sounds like you just want to be able to blame "the government" and not deal with the reality that the banks OWN the government. And in the case of Goldman Sachs, they ARE the government. Seriously, you want to bring up "cowboy poets"? Show me a cowboy poet who made 53M in one year while helping to blow up the global financial system, and then benefited from trillions of dollars in taxpayer subsidies while bringing home tens of millions of dollars more.
Sure, go ahead and use some kind of conceptual prophylactic that separates "Government" from "Government Sachs" if you want, but you're still going to get f***ed if you let the bankers off the hook.
The English language has some wonderfully anthropomorphic collective nouns for the various groups of animals.
We are all familiar with a Herd of cows, a Flock of chickens, a School of fish and a Gaggle of geese. However, less widely known is a Pride of lions, a Murder of crows (as well as their cousins the rooks and ravens), an Exaltation of doves and, presumably because they look so wise, a Parliament of owls.
Now consider a group of Baboons. They are the loudest, most dangerous, most obnoxious, most viciously aggressive and least intelligent of all primates.
And what is the proper collective noun for a group of baboons?
Believe it or not ....... a Congress!
You can look it up!
So loud, obnoxious, aggressive, Republican Rep. Joe Walsh, as he carries on like he's an expert about things he knows nothing about, or he's lying his ass off, ether way not very intelligent as the people he's talking to know who's too blame for the financial crisis, is just another Baboon in a Congress full of them.
Legislation exists that allowed banks to lend others peoples money to unworthy borrowers and collect a nice fee in the process.
Has this legislation been repealed and if not, why aren't the banks still making $800,000 loans to $19,000 year strawberry pickers?
I'll lend insane amounts of money to losers all day long as long as its not my money and I make a nice chunk of change in the process
I don't. That was a cloak that attempted to conceal the plot to make MORE money on non-performing loans than performing loans while trying to appear "caring" and "fair"...lol.
It's all about the leverage, CDS, third party insurance, etc. Neil Garfield explains it well below.
http://www.youtube.com/watch?v=nZ6lPaiKmwg
Walsh is a dope.
The Banks and Realtors along with the FED leadership encouraged the liar loan epidemic. By having their employees in Congress and the Presidential Administrations repeal protective legislation and turn regulatory agencies into a flock of Ostriches with their heads buried in the sand they opened the flood gates. Then adding a little criminal fraud they made themselves outrageously rich and initiated the destruction of the middle class here and abroad.
That the Sheeple continue to graze on in their pastures of apathy instead of seeking the blood and stolen treasure of the guilty, totally amazes the hell outa me!
What a man child..... now take your toys and go home. OK ?
Considering the only think I have heard from Obama is "Well what the banks did was unethical but not illegal". Leaves me just as confused as the realitor who sold a conflict home, if you will, but is by law not conplicit. Why not?
I don't agree with a bank being excused from fraud at all. I also agree that if anyone enabled this through legislation or loopholes etc. They too should be charged with fraud.
To say that the banks are not at fault is just wrong. The banks committed mass fraud upon the state courts and should be charged accordingly.
For the president to say well it really just a matter of ethics and sadly has no tie to the law, is minblowing to say the least. For anyone to think less is fortunate enough not to have to deal with the issue on an intament level.
Both parties are guilty. Perhaps the question is regarding any debate on it should be, who is more so? In my book fraud is fraud. It should be treated accordingly. Anyone on this blog who would commit such an act on a minor scale would be speaking to people about the absense of freedome your about to experience. That said, anyone involved should receive the same tratment regardless who they are or how rich.
Entertaining a 50 state settlement for foreclosure fraud is unjust. People lost lives over this issue. I say investigate until all parties are brought to justice.
Ron Paul on Obama’s “Elective Dictatorship” (The article he wrot and speaks of is worth your time. Very powerful idea indeed)
http://www.ronpaul.com/2011-11-08/ron-paul-on-obamas-elective-dictatorship/
Dr. Russ Roberts.
http://www.youtube.com/watch?v=YuZxLdGdUPQ&feature=youtube_gdata_player
In fairness, I have a life long friend who who is weathy via the way of horsepower in making money. He can more than pay his mortgage but won't because "now it's a bad investment?". I don't agree with that either. You bought it, wanted it, can more than pay for it. I think you should. Moreover not be allowed to then purchase another property in distress and several others for investment purposes. Sad thinking.
That itself could be a factor in slowing people down in justice system with good intentions. The first link addresses one part of the issue. Weather or not it would ever be applied in this case I think is a streatch. I would however like to se see it applied at some point. I feel it would have prevented so much of the current problem. Most certainly would stop empty promisses as a politician if effectivly implemented.
Hope it's enjoyed. Thanks DB, hope everyone has a great week!
That the President, the Justice Department, Congress, and many state attorney generals would even consider a 50 state foreclosure fraud settlement as an option, shows how much the big banks control and manipulate the Government of the United States at State and Federal levels.
Throw Rule of Law in the trash can, toss the middle class in with it and long live the pigs on Wall Street with their employment offers, campaign donations, and under the table perks. The oinkers are tearing holes in what remains of the foundation of our country.
I need a shot and a couple beers to cool off, the more I think about this situation the more it pisses me off.
Or not? But I believe the video itself strikes up the very core issue we all know to be the truth. If there is anger directed at anyone to another here it perhaps is a reflection of how much we all care. Being the one to "Care, give a damn, etc." is the tough part. We "The People" want to see what's right. Justice being done. Showing that we live in a country that lives up to decloration's. No one SHOULD be ABOVE THE LAW.
Whew! I feel better now. Drinks on me. LOL! Have a good one.
Time for another round! Double on the bourbon and forget the beer.