I'm going to stand firm on this one I'm afraid. Obviously at the time Phil Gramm had influence in his party which led to him garnering votes for
this. Phil Gramm proffited from Enron from his wife being on their board; we all know how that went.
I think this quote from my article sums it up pretty well:
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.
I think that is pretty profound in affecting us and the situation now. This was all about the financial institutions, the AIG's, the Banks of
Americas, the Goldman Sachs. The only people benefitting from this are the financial institutions.
And you have to remember, some of these bills, the one from 1994 in example, happend right after the 1980's banking crisis when laws where put in
place to keep this from happening again. I didn't go sit through Money and Banking in college to have it go to waste. From everything that I
learned, this was not, and I must stress NOT, supposed to happen again.
This quote also speaks volumes:
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.
Instead of having different institutions for the different areas of finance, you know have the "one stop shop" which I know is convieniant. But the
laws of the 1980's were supposed to prevent this, supposed to prevent banks and other financial institutions from investing in these type of risky
investments. Phil Gramm looks to be a big cause of why those laws did not help us. It could be that we might be in the mess we are now anyways, but
I still blame Gramm.
Here is the link for the 1980's stuff: www.fdic.gov...
It's from the FDIC so it's legitimate.
In the long run, I think you will see that things will be just fine, but in the mean time, they could get bad. Lehman Bro's was allowed to fail, and
not just fail, but reportedly the biggest bankruptcy in US history. The government it seems is pushing Bank of America to buy Merrell Lynch. JP
Morgan and Goldman Sachs hopefully will get the $70-75billion they need to keep running. If AIG failed it would be worse than bad so hopefully they
will stay afloat.
I still think Citi is going to write off $5-7billion in the future; if not that, at least something. Wachovia will probably lose more, Washington
Mutual. Normally I would think I'm forgetting some firm, and I might be, but the trouble makers seem to be takne over or out of business.
I would be very suprised to see Bank of America post a loss from bad investments. Out of the companys I think they are pretty clean; it is too bad
that their stock is taking a hit from the rest of the finnacials. I think you'll see Goldman Sachs make it out alright too. I don't believe I've
read of them writing off money either from bad investments but I could be wrong, there is a lot to digest.
The man to blame, Phil Gramm...even though greedy bankers and irresponsible people helped, he inacted the laws to set it in motion.
If we take anything from this, let us hope that the people of our country get there act together and get some morals and values back; lets hope that
we can clean up our mess and get that in order.
In the short term, it could be rough, but in the long run, I don't see a "depression". The market will come back, it was due for a correction
anyways and it seems to be about what me and a few others expected: some where between 15-60%; even though right now its closer to 70% loss from its
high if I did the math right.
Point being, things will be bad, but probably not as bad as we think, and in a few years things will smooth out.