Obama : "If these folks want a fight, it's a fight I'm ready to have" , page 2
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reply posted on 23-4-2010 @ 10:34 AM by dolphinfan
reply to post by Darith1974
I agree with you that we certainly need reform, but I don't think the current bill, about which we have only heard bullet points, so nobody knows what is really in it, misses the mark in a number of areas that they have specifically stated they don't want to address.
Fani and Fredi Mack, which were central elements of the original problem is not addressed by this reform. Difficult to enact real reform when the two largest mortgage providers are exempt.
The laws around red-lining have not been addressed. Banks will still be required to provide loans to all neighborhoods in which they do business other they will be red-lined and exempted to do business in all areas within their sphere of business. Redlining which was dramatically inacted through the Community Reininvestment Act was the core of the problem here - it was the motivation to create mortgage products such as $0 down so that people who otherwise could not secure a loan could secure one. Since these loans had a high probability of failing, they were securitized to minimize the bank's risk.
The issue with the ratings agencys, notably S&P and Moodys has not been addressed. These agencys are corrupt IMO and provide good ratings to investment vehicles being pushed by banks they do business with. The have a massive conflict of interest. As much as I don't like government, the government should be in the position of rating financial instruments or at least a not for profit entity.
I hope they are smart this time, unlike health care and enact incremental reforms that can fix some of the problems and then progressively move more reforms into place rather than this huge bundle of laws and regulations that nobody understands.
In conjunction with the above, they should also look at corporate taxes here which are the highest in the world and also repeal major sections of Sarbanes/Oxley, notably section 404.
I agree with you that we certainly need reform, but I don't think the current bill, about which we have only heard bullet points, so nobody knows what is really in it, misses the mark in a number of areas that they have specifically stated they don't want to address.
Fani and Fredi Mack, which were central elements of the original problem is not addressed by this reform. Difficult to enact real reform when the two largest mortgage providers are exempt.
The laws around red-lining have not been addressed. Banks will still be required to provide loans to all neighborhoods in which they do business other they will be red-lined and exempted to do business in all areas within their sphere of business. Redlining which was dramatically inacted through the Community Reininvestment Act was the core of the problem here - it was the motivation to create mortgage products such as $0 down so that people who otherwise could not secure a loan could secure one. Since these loans had a high probability of failing, they were securitized to minimize the bank's risk.
The issue with the ratings agencys, notably S&P and Moodys has not been addressed. These agencys are corrupt IMO and provide good ratings to investment vehicles being pushed by banks they do business with. The have a massive conflict of interest. As much as I don't like government, the government should be in the position of rating financial instruments or at least a not for profit entity.
I hope they are smart this time, unlike health care and enact incremental reforms that can fix some of the problems and then progressively move more reforms into place rather than this huge bundle of laws and regulations that nobody understands.
In conjunction with the above, they should also look at corporate taxes here which are the highest in the world and also repeal major sections of Sarbanes/Oxley, notably section 404.
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