There are many people on here that believe the market will crash and all hell will break out; however, I am not one of them. I honestly do not feel
that there will be a "crash". Allthough, a correction is deffinatly needed for the system to fix itself. Citi bank in recent weeks, or days, I
can't remember anymore, had hinted that there might be more write downs. Why they haven't just wrote them all of is beyond me. If Citi writes more
credit off, other companies will follow suit.
But, hrough this thread, I hope to show in some ways how Phil Gramm is responsible for some of the problem if not most of it.
The Dallas Morning News had a great article about he has helped to cause the current problem. Here is the link to the story:
Some banking experts have also questioned Mr. Gramm's legislative landmark, the Gramm-Leach-Bliley Act. In 1999, Mr. Gramm predicted the
deregulatory law would presage a new era of financial innovation and create financial supermarkets for consumers.
But deregulation has coincided with a precipitous fall in the performance of many banks, while one-stop financial shops haven't flourished in the way
Mr. Gramm envisioned.
Also fromt he article:
In 1994, Mr. Gramm single-handedly killed a bill that would have required credit bureaus to quickly fix errors on a person's credit report.
Mr. Gramm called it a "bad bill" that imposed costs on the credit bureaus.
"He was very focused on cost to financial institutions and not very focused on costs suffered by consumers," said Travis Plunkett, legislative
director for the Consumer Federation of America.
One must also remember that Gramm's wife was on the board of directors of Enron too. Another aspect that is really hurting the markets is the price
of futures going up. Mr Gramm has helped cause this problem also.
Mr. Gramm said his wife proposed exempting energy derivatives from regulation only after Congress passed a law in 1992 making that possible.
The final decision was made by the commission under a Democratic chairman.
Seven years later, Mr. Gramm co-sponsored a bill that put the commission's exemption into law. The chairman of the commission warned that energy
derivatives could be used to manipulate energy prices.
As you can see, even though the banks are writing off huge losses, there were laws passed so that they had the ability to manipulate credit the way
they have. This was supposed to be fixed by the legislation passed during the 1980's during the banking crisis then.
Here is a link to the FDIC about this problem and how it was supposed to be fixed:www.fdic.gov...
dubbed the "savings and loans crisis".
Even though this problem was supposed to be fixed, Phil Gramm through Congress has allowed it to happen.
As the price of oil rises, mainly from the loop hole that allows ordinary people like you and me to buy into the futures market, it takes away money
from the people that owe the banks.
At the present time, you can live in a house for 6-12 months with out paying for it and then be kicked out. If you can live for half a year or so
without paying why do it? I've seen it all over my neighborhood.
People will always buy gas over paying the house bill or some other bill. If they pay the house bill, they can not get the gas to go to work, or,
they go into debt. Then the people can not make the payment, they get behind and eventually are written off. But, when all of this happens at once,
you get the conundrum that we are in now.